Endangered Species: The Self-Employed Middle Class

Including the professional class, perhaps 3% of the workforce is truly independent.

Being self-employed (i.e. owning your own small business that does not require employees) is an integral part of the American Dream. Many start out dreaming of a corner office in Corporate America, but as they move up the ladder, many become disillusioned by the process and the goal: do I really want to spend my life making big-shots even wealthier?

Bureaucracies (government and corporate) are safe sources of employment, but at a cost: they’re often soul-deadening.

Many dream of making a living doing something they actually care about, and that often means striking out on your own, i.e. self-employment.

This raises an interesting question: how many self-employed people in the U.S. actually earn a middle class income? Since all the government statistics have a line at $50,000, and $50,000 might support a minimal middle class lifestyle in areas with a low cost of living, let’s use $50,000 in annual income as our minimum.

As you might expect, government agencies count jobs and self-employment in different ways, which makes sorting out the numbers difficult. The Bureau of Labor Statistics (BLS), for example, counts two types of self-employed, the unincorporated and the incorporated. The unincorporated may have employees, but typically do not, i.e. they are sole proprietors. The incorporated have employees, starting with the owner, as the BLS counts the incorporated self-employed as employees of their own corporation.

The analysts at Docstoc.com assembled a chart that counts only those sole proprietors, partnerships and corporations with no employees, i.e. the self-employed: The State of US Small Businesses.

They came up with a total number of all self-employed that earned at least $1,000 annually of 22.5 million, of which 3 million were partnerships or corporations. These are overwhelmingly professionals such as attorneys, accountants, physicians, consultants, entertainers, etc.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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