Here is a brief excerpt from an article written by Wendell Cox for NewGeography.com, a joint venture of Joel Kotkin and Praxis Strategy Group. To read the complete article, check out others, and subscribe, please click here.

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The United States labor market has been undergoing a substantial shift toward small-scale entrepreneurship. The number of proprietors – owners of businesses who are not wage and salary employees, has skyrocketed, especially in the last decade. Proprietors are self employed business owners who use Internal Revenue Service Schedule C to file their federal income tax. Wage and salary workers are all employees of any establishment (private or government), from executives to non-supervisory workers.

From 2000 to 2011, the number of non-farm proprietors grew by 10.7 million. Total wage and salary employment grew by only 105,000 between 2000 and 2011. Government employment, including federal, state and local, grew 1.36 million, while private employment declined by 1.26 million (Figure 1).

As a result, 99 percent of the total increase in employment from 2000 to 2011 was in the self-employed, according to Bureau of Economic Analysis of the United States Department of Commerce data. By comparison, during the 1990s, self employment accounted for only 22 percent of the increase in jobs nationally (Figure 2). The economic impact of the increase in self employment may be less, however, than its gross numbers, because many of the self employed are also engaged in wage and salary employment (Note).

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Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris since 2002. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.