{"id":10845,"date":"2018-06-06T07:00:55","date_gmt":"2018-06-06T11:00:55","guid":{"rendered":"https:\/\/www.theseventhstate.com\/?p=10845"},"modified":"2018-06-06T00:09:57","modified_gmt":"2018-06-06T04:09:57","slug":"this-type-of-employment-is-growing-rapidly-in-moco","status":"publish","type":"post","link":"https:\/\/www.theseventhstate.com\/?p=10845","title":{"rendered":"This Type of Employment is Growing Rapidly in MoCo"},"content":{"rendered":"

By Adam Pagnucco.<\/em><\/p>\n

Data from the U.S. Bureau of Economic Analysis<\/a> (BEA) confirms something we have reported before<\/a>: wage and salary employment has been stagnant in MoCo for a decade.\u00a0 But BEA data indicates something else is happening too: proprietor (self-employed) employment has been growing rapidly here and it pays less than wage and salary jobs.\u00a0 That may not be a great sign for the county\u2019s economy.<\/p>\n

Unlike the U.S. Bureau of Labor Statistics (BLS), which we have cited in the past, BEA tracks two kinds of employment: wage and salary and proprietors<\/a>.\u00a0 (Check here<\/a> for a summary of methodological differences between the two agencies.)\u00a0 Proprietors are self-employed and operate through sole proprietorships (integrated with their personal income on their income tax returns), partnerships and tax-exempt cooperatives.\u00a0 According to the Census Bureau\u2019s Survey of Business Owners program<\/a>, less than one in five of MoCo\u2019s businesses have paid employees.\u00a0 The county has a lot of self-employed people and little is said about them.<\/p>\n

Here is the change in wage and salary employment between 2006 and 2016 for the seventeen Washington area jurisdictions<\/a> tracked by BEA.<\/p>\n

\"\"<\/a><\/p>\n

This data tells a similar story to BLS data we have previously presented<\/a>: MoCo has trailed most of the region in job creation over the last decade.\u00a0 Only Alexandria City and tiny Clarke County, VA have fared worse.<\/p>\n

However, proprietor job data tells a much different story.\u00a0 MoCo\u2019s rate of proprietor job creation (36% over the last decade) is almost identical to the region as a whole.<\/p>\n

\"\"<\/a><\/p>\n

Proprietor jobs aren\u2019t inherently bad and it\u2019s good that MoCo has SOME kind of employment growth.\u00a0 But proprietors have much less security than full-time wage and salary workers.\u00a0 Proprietors have sole responsibility for their health and retirement benefits and many of them have little cushion when contracts and\/or clients dry up.\u00a0 They also make less.\u00a0 In 2016, the average wage and salary plus employer contribution to pensions, insurance and government social insurance totaled $89,337 per wage and salary employee in MoCo.\u00a0 By contrast, the average earnings per proprietor totaled $66,498.<\/p>\n

This isn\u2019t happening just in MoCo; it\u2019s a regional phenomenon.\u00a0 But MoCo is an outlier.\u00a0 The chart below compares wage and salary job creation and proprietor job creation by D.C. area jurisdiction between 2006 and 2016.\u00a0 In the region as a whole, 1.2 proprietor jobs have been created for every wage and salary job over the last decade.\u00a0 MoCo led the entire region in proprietor job creation with 53,672 jobs \u2013 a 36% growth rate.\u00a0 But MoCo was one of the worst performers in creating wage and salary jobs as one of just three jurisdictions with an absolute job loss.\u00a0 The result is a significant shift in MoCo away from wage and salary employment towards lower-paying contingent employment by a magnitude not seen in most of the rest of the region.<\/strong><\/p>\n

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Unemployment rates don\u2019t capture this kind of labor market shift.\u00a0 If a self-employed person working on contracts is not seeking a full-time job even if they would like one, that person will not be counted as unemployed<\/a>.<\/p>\n

Proprietor growth can be a good thing if it reflects job-creating entrepreneurship.\u00a0 That might be the case in places like Loudoun, D.C., Arlington, Fairfax and Prince William, all of which saw simultaneous increases in both proprietor and wage and salary employment.\u00a0 It\u2019s possible in those jurisdictions that new proprietorships created<\/em> wage and salary jobs.\u00a0 But MoCo is different from the above five places.\u00a0 Here, surging proprietorships coincided with stagnant wage and salary employment.\u00a0 Since proprietor jobs pay less on average, that may not be a good thing.<\/p>\n

Let\u2019s put this together with our previous work on the county\u2019s economy.\u00a0 MoCo business formation has slowed to a halt<\/a>.\u00a0 Private sector employers in the county have (at least through 2016) not restored their job counts above pre-recession levels<\/a>.\u00a0 These factors have contributed to big budget<\/a> shortfalls<\/a>, a nine percent property tax hike<\/a> and county usage of one-time transfers to balance the budget<\/a>.\u00a0 Those MoCo taxpayers who have chosen to move out have higher incomes than those who are moving in<\/a>.\u00a0 And in MoCo, lower paying self-employment is outgrowing higher paying wage and salary employment.<\/p>\n

Voters, take heed.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Adam Pagnucco. Data from the U.S. Bureau of Economic Analysis (BEA) confirms something we have reported before: wage and salary employment has been stagnant in MoCo for a decade.\u00a0 But BEA data indicates something else is happening too: proprietor (self-employed) employment has been growing rapidly here and it pays less than wage and salary … Continue reading This Type of Employment is Growing Rapidly in MoCo<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[151,338],"tags":[1545,1993],"class_list":["post-10845","post","type-post","status-publish","format-standard","hentry","category-adam-pagnucco","category-economy","tag-adam-pagnucco","tag-economy"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p4mKJE-2OV","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/10845","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10845"}],"version-history":[{"count":4,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/10845\/revisions"}],"predecessor-version":[{"id":10907,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/10845\/revisions\/10907"}],"wp:attachment":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10845"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10845"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10845"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}