U.S. Census Bureau data show that 4.54 million entrepreneurs applied for federal tax identification numbers to register 4.54million new businesses between January-October, an increase of 56 percent over the same period in 2019.
According to Wall Street Journal this was the highest number of records dating back to 2004.
The Journal reported in a recent article that two-thirds (63%) of tax-ID-number application were for businesses that do not expect to hire employees.
“Workers quit jobs in droves to become their own bosses”That was the headline. The headline did not address questions about the shorter and longer time frames. Those questions include:
How many — or what percentage — of the new crop of well-meaning entrepreneurs are likely to fail in their endeavors within a year or two, or perhaps more quickly?
What percentage of people could be expected to return to work for another boss in five years? Perhaps after having given up on promising, lucrative careers and not fully embracing the challenges “going it alone”Would it be possible?
Close to home. How does the local region fit in to the overall landscape presented by the Journal article? What percentage of local business ventures that are starting now will be included in the overall picture of failure left by the Journal article?
Naturally, Warren, Dunkirk and Jamestown are not likely to have many new entrepreneurial startups. Our two-state region is included in the national startup statistics and will one day have to join the rest the country in finding ways of dealing with any business failures.
According to Wall Street Journal “This year, the share of U.S. workers who work for a firm with at least 1,000 employees has fallen for the first time since 2004, Labor Department data show. Meanwhile, the U.S. self-employed workforce has increased to the highest level in 11 year. In October, they represented 5.9 percent of U.S. workers versus 5.4 percent in February 2020.”
Until the late 19th century, Americans were largely self-employed. New technologies have changed that. Many people choose to work on the factory floor. They are able to work within a defined work schedule and are able to do what the Journal describes as “strictly defined work hours.” “hierarchies” — workers overseen by managers overseen by executives.
Fast forward to the pandemic. This has caused many people to reevaluate how they see the future. Many opt for a life where they are more in charge of their destiny.
Not surprisingly, even many expert observers never contemplated this year’s rate of new-business startups. That is clear from the Journal’s attention to the topic that included interviews with people who shut down their employment careers in favor of self-employment — heading some new startup enterprise of their own.
The stock market is subject to occasional volatility. “corrections,”It is possible that there will be corrections for the new-businesses boom.
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