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