Subscribe to Entrepreneur for $5
Subscribe

Record Number of Workers Quit Jobs to Become Self-Employed Amid COVID-19 Pandemic

As of October, there were about 9.44 million unincorporated self-employed individuals in the United States, as per the Bureau's data.

By
This story originally appeared on The Epoch Times

A historic number of workers have become their own bosses amid the COVID-19 pandemic, according to data from the Bureau of Labor Statistics (pdf).

As of October, there were about 9.44 million unincorporated self-employed individuals in the United States, as per the Bureau’s data. In that same month last year, there were about 8.78 million unincorporated self-employed individuals in the United States.

The latest figures amount to a rise of 500,000 since the start of the pandemic and an increase of 6 percent in the self-employed, while the overall U.S. employment total remains nearly 3 percent lower than before the pandemic.

Furthermore, in October of this year, there were 432,101 business formation applications filed in the United States, according to data from the Census Bureau. In that same month last year, there were 414,195 applications filed to register a new business.

A number of reasons could be behind the wave in self-employment rates, including growing fears among employees returning to the office amid the ongoing pandemic, the stress of the pandemic, a desire for more job flexibility, government mandates, or a lack of access to childcare could all be behind the move.

The figures come as more hiring difficulties appear to be on the horizon for U.S. firms amid a weak labor supply, according to the Bureau of Labor Statistics’ November jobs report.

The bureau’s October jobs report, released Nov. 5, showed that employers added more than a half-million jobs in October, beating market expectations and painting a more positive picture of labor market recovery compared to the previous month.

However, the labor force participation rate—a measure of how many people work or are actively looking for jobs—was unchanged at 61.6 percent in October and has remained within a narrow range of 61.4 percent to 61.7 percent since June 2020.

The participation rate is 1.7 percent lower than February 2020, during the height of the COVID-19 pandemic.

The nationwide labor shortage has prompted employers across the United States to raise wages and implement attractive bonuses and competitive compensation in an effort to pull in new workers.

Starbucks, Costco, Walmart, Target, CVS Health, and Walgreens Boots Alliance are just a handful of companies that have all said they are boosting starting wages to $15 an hour, in line with President Joe Biden’s push to raise the minimum wage to the same amount and in an effort to recruit more workers.

Meanwhile, Federal Reserve chair Jerome Powell this week said the emergence of a new CCP (Chinese Communist Party) virus variant poses a risk to employment and inflation in the country.

Known as Omicron, the new variant was first detected by South Africa last Thursday.

“The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity, and increased uncertainty for inflation,” Powell said before the Committee on Banking, Housing, and Urban Affairs and Senate lawmakers on Tuesday.

“Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” the chairman said.

Powell did not discuss any proposed monetary policy actions by the central bank or whether officials are considering changing the pace of the tapering of its asset purchases, but said, “We understand that our actions affect communities, families, and businesses across the country.”

“Everything we do is in service to our public mission. We at the Fed will do everything we can to support a full recovery in employment and achieve our price-stability goal,” he concluded.

As federal officials are pulling back bond purchases in line with falling unemployment levels, it is unclear how the emergence of Omicron will affect those plans. 

By Katabella Roberts

 

Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.

The Epoch Times

Written By

The Epoch Times is the fastest-growing independent news media in America. We are nonpartisan and dedicated to truthful reporting.

We are free from the influence of any government, corporation, or political party—this is what makes us different from other media organizations. Our goal is to bring our readers accurate information so they can form their own opinions about the most significant topics of our time.

We don’t follow the unhealthy trend of agenda-driven journalism prevalent in today’s media environment. Instead, we use our principles of Truth and Tradition as our guiding light. We highlight in our reporting the best of humanity, the valuable lessons of history, and traditions that are beneficial for society.

The Epoch Times was founded in the United States in the year 2000 in response to communist repression and censorship in China. Our founders, Chinese-Americans who themselves had fled communism, sought to create an independent media to bring the world uncensored and truthful information.

The Epoch Times has received numerous awards for our reporting and design, including from the New York Press Association, the Society of Professional Journalists, and the Society for News Design.

The Epoch Times’ media network currently covers 21 languages and 33 countries.