The business of work

I was looking at business and employment statistics the other day (the kind of thing available from the Small Business Administration), in part because much of my consulting work has been with companies and organizations, and in part because I had no idea of possible relationships like number of non-employers, relative proportion of sales, etc.

Here’s some of what I learned about the U.S. business world:

Number of firms (2004 figures, rounded):

  • 5.9 million employer firms (organizations with a payroll)
  • 19.5 million non-employers (individuals; mainly sole proprietorships)

(A non-employer firm has no employees, had at least $1,000 in business receipts, and is subject to federal income taxes.)

Number of employees (also 2004 figures):

In 2004 there were 115 million employees (of employer firms, of course). A rough breakdown by size of employer:

  • More than 500 employees: 56.5 million workers (49% of 115 million)
  • 100 – 499 employees: 16.8 million workers (15%)
  • 20 – 99 employees: 20.6 million (18%)

It’s hard to say how many “employees” there were at non-employer firms; the Census Bureau says many non-employers are not the primary source of income for their owners. For example, if Rachel does $3,000 worth of consulting in a year, or if Jack earns $5,000 selling educational toys, they’d each be a non-employer.

Counting each non-employer as his or her own employee, there’d be 19.5 million.


  • In 2004, employer firms had a total payroll of $4.3 trillion.
  • Non-employer firms, by definition, had no payroll.

Receipts (2002 figures):

  • Employer firms: $22 trillion.
  • Non-employer firms: $770 billion.

* * *

What I learned:

  • Non-employers make up nearly 80% of all firms.
  • If you count each non-employer as one worker (19.5 million), non-employers account for 14% of all workers ( 19.5 / [115+19.5] ).
  • So, 86% of all U.S. workers are employees, and almost half of all employees (56.5 million people) work for companies with 500 or more employees.
  • Non-employers account for 3.5% of all receipts (sales, income).

So now I know.

3 thoughts on “The business of work

  1. Good piece, Dave. One question: Can non-employers also work as employees at employer firms? If Jack is making $5,000/year selling educational toys, might he also be employed at PHI as a data entry clerk?


  2. Rich,

    I’m sure that many non-employers are also employees. That was true for me when I had a salaried position and also consulted on the side.

    Looking at some statistics for non-employers, I see that the single biggest source of receipts for non-employers is “real estate, rental, and leasing” (21% of all non-employer receipts). So if you own rental property, you’re both a non-employer and an employee.

    Construction accounts for another 16% of non-employer receipts. Examples might be a general contractor with no employees, and tradespeople who contract individually rather than working full-time for a company.

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