Business Insider recently published an article drawing on data compiled by the Office of Advocacy to show an interesting caveat that applies to analyses of all businesses—nonemployers and employers combined. “In 2010,” the article reads, “21.7 million U.S. businesses were without employees, while only 5.6 million had them. At 79 percent of all American companies, the characteristics of non-employers swamp the overall data.”
Here’s the problem according to Business Insider: “Combining the two businesses often leads to estimates that hide what’s going on in the economy. For instance, the number of people working for the average U.S. business declined from 4.8 in 1992 to 4.3 in 2009, suggesting that the size of American companies is shrinking.
“However, that trend is actually an anomaly of the increasing share of non-employers, which increased from 73.4 percent of U.S. companies in 1992 to 79.5 percent in 2010. Employer businesses have actually grown since the early 1990s, with average size of an employer business increasing from 18.2 to 19.9 between 1992 and 2009.”
Take a look at the full Business Insider article, and let us know what you think.
—Rebecca Krafft, Editor