Job Losses and the Self Employed
August 18, 2009 Leave a comment
The July 2009 Jobs Report was relatively positive. That means the job losses, although still huge, are subsiding. I checked the U-4, U-5, and U-6 reports as well – both season adjusted and not adjusted – and there wasn’t anything there that stuck out.
So now it is time to look at the oddities that can be pulled from numbers. The NY Times has a guy named Scott A Shane who did some research earlier this year and recently about the self employed segment. He compared their job loss rate against the corporate job loss rate. Here is his chart, taken from his post called Job Loss Abating Among the Self-Employed:
What this graph is showing is a year over year growth/loss comparison for the Self Employed and the Wage Employed. In other words, in the July/August 2008 time frame the Self Employed segment was 102% larger than it was in July/August of 2007.
What I find most interesting about this is how the dramatic decline for red (self employed) coincides with the months of September, October, November, and December of 2009. These were anxious months for just about everyone. What I surmise happened is that the consumer quit spending (ok, we know they did) and many self employed people looked to the credit markets to finance this slump, but they were frozen, and still pretty much are. Without any type of income coming in many self employed people lost their jobs.
But now things appear to be leveling off. The special skills or niche abilities of the self employed are sought after. But why? Well, if the tide has changed then it is probably because of comments like this from Jeffrey Immelt:
“I don’t need that to be part of your presentation,” he told them. “I already know the market’s slow.” As Immelt puts it, “The presentations had to go from ‘The market’s slow’ to ‘There’s an 80-locomotive order in Egypt — let’s go get it.'”
This was taken from The new (recovery) play book and article in Fortune. Good leaders don’t throw up their hands in defeat. They keep looking. They fundamentally believe there is a market for goods and services of value. And that is why the self employed statistic has flattened. Next month I expect it to turn up slightly.
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