U.S. Census Bureau data reveal that entrepreneurs applied for federal tax-identification numbers to register 4.54 million new businesses between January and October, up 56 percent from the same period of 2019.
According to the Wall Street Journal, that was the largest number on record dating back to 2004.
In a recent article, the Journal said that two-thirds of the tax-ID-number applications were for businesses that are not expected to hire employees.
“Workers quit jobs in droves to become their own bosses” was the headline. However, the article did not delve into questions for the short 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 might be expected to be back working for some other boss five years from now, perhaps after having jettisoned promising, lucrative careers without realizing fully the challenges “going it alone” would present?
Close to home: Where does the local region fit into the overall landscape that the Journal article presented? More specifically, how many area business ventures getting started now will fit into the word picture of failure that the Journal article left open for personal contemplation and speculation?
Obviously, places of the size of Jamestown, Dunkirk and Warren are not going to supply big new entrepreneurial startup numbers. But our two-state region is part of the national startup statistics, and someday it will have to join the rest of the country in finding ways to deal with whatever number of business failures are forthcoming,
According to the 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 percentage of U.S. workers who are self-employed has risen to the highest in 11 years. In October, they represented 5.9 percent of U.S. workers versus 5.4 percent in February 2020.”
Up until the late 19th century, most Americans worked for themselves. Evolving new technologies changed that; many people opted for the factory floor, landing in an environment of strictly defined work hours and what the Journal described as “hierarchies” — workers overseen by managers overseen by executives.
Fast-forward to the pandemic, which has caused numerous people to reevaluate their views of the future, with many opting for a life in which they are more in control of their fates.
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.
While the stock market experiences occasional “corrections,” it seems likely that there also will be corrections to the new-businesses boom.