You may have heard that today the federal Bureau of Labor Statistics announced, based on the monthly survey of business establishments, that U.S. payroll employment fell by just under 600,000 from December to January. That is the worst month since 1974, I read. What you may not have heard, however, is that based on the monthly survey of households, BLS also reported the number of employed residents of the United States fell by 1.24 million, or more than twice as much. Double. More than 1.2 million in one month. Those who consistently read my posts, including this recent one, know how the difference may be explained: the household survey includes the self-employed, people who own their own businesses, freelancers, and independent contractors.
The self-employed have been a rising share of the labor force for more than 20 years, particularly in some places such as New York and Los Angeles that have joined the recession late, and with a vengeance. When I see those added job losses in the household survey, I see people who have lost their businesses, and young people who were never privileged enough to gain the benefits of being an employee losing their tenuous income. They don’t get unemployment benefits, either. Which is just as well, because the New York State unemployment insurance fund is already $300 million in debt, a debt run up by past businesses paying in too little, a debt that anyone dumb enough to open a business here in the future will have to pay back.