There seems to be a lot of entrepreneurial spirit in the air these days. Everyone has a niece who runs her own photography business or a crazy uncle who sells custom bicycle pumps through Amazon. But which self-employment ventures actually employ the most people? And, of those, which are most profitable?
With these questions in mind, we turned to Analyst, our web-based data tool, and came up with some numbers. To be honest, a lot of these occupations make sense for self-employed workers. Many of them are not very lucrative, but the ones that made the top of the list are relatively easy to break into.
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This list is ranked purely on number of jobs, and only includes those who earn their primary income as self-employed workers, as opposed to those who supplement their income by working as extended proprietors. Child care workers are at the top of the list, followed by carpenters, maids, and farmers. The more exotic and artistic occupations like travel writing and photography haven’t even made an appearance, which isn’t surprising if we consider things practically. Notice that of the top five occupations on this list, none require a degree or vocational education. Self-employed child care workers and maids can get by with short-term on-the-job training, which is reflected in their wages. Carpenters and construction laborers require a little more training, but the number of jobs is high regardless, which could reflect growth in the construction industry. Self-employed construction laborers in particular have increased 21% since 2007. Farmers seem to be diminishing, with a 20% decline in the last five years, and based on their median hourly wage, theirs is not an extremely lucrative business.
If we view the same data from an earnings standpoint, we get a different picture (click on the graph to view a larger image):
Based on wages, lawyers place first with a median hourly wage of $39.87. Second are management analysts (also known as business consultants) with $32.73 per hour. But before you quit your job and scramble to register an LLC, take a look at the education level required for either of these occupations. Most high-paying occupations, especially self-employed occupations, require a bachelor’s degree in the field at the very least, and of course, practicing law requires a law degree. Self-employed managers, however, will probably get by with related work experience, and truck drivers, ranked fifth on the list, need only short-term on-the-job training. And though the percent change might look grim for truck drivers (-4% since 2007), the trends are on the upswing.
Since we now know the top 20 occupations for the self-employed nationwide, we can compare these numbers to the data for total employees in the same occupations. Here’s a rough comparison (again, click to enlarge):
From this table, another interesting piece of information also comes to light. Self-employed workers account for over one-quarter of total jobs, as far as these particular occupations go. Basically, if you hire a child care worker, a carpenter, or a maid anytime in the near future, there is a 25.6% chance that they will be self-employed. And it looks like that number is on the rise. But remember to view the data in perspective. These 20 occupations have the most self-employed workers of all occupations in the country, and those workers still only account for a quarter of the jobs.
Self-employment isn’t just for aspiring screenwriters and mushroom salesmen. More and more managers, businessmen, and construction workers are pulling themselves out of the recession and striking out on their own. And what’s more, some of them are succeeding (see our article on graphic design services). On the other hand, don’t be fooled by large numbers. Self-employed child care workers, although more numerous than any other group of self-employed workers, are poorly paid and have experienced a slow decline in the last few years (1% drop since 2007). Many of the other occupations on the list are losing self-employed workers at a much faster rate. If present trends continue, many of the 20 largest self-employed occupations won’t be on the list much longer.
Data and analysis from this report was created using Analyst, EMSI’s web-based labor market tool. Please contact Rob Sentz (firstname.lastname@example.org) if you have further questions. Follow us @desktopecon.