I always appreciate
@KobeissiLetter analysis.
I see a non contradicting angle here: the side hustle. People are creating LLCs for side hustles and then they can file taxes (1040 schedule C) and deduct eligible expenses.
Reached out to a couple accountants to ask how many Schedule C side hustles they are seeing and they said every year it’s been growing.
That aligns perfectly with this chart and your analysis of the %s.
I know my angle is from a VERY VERY small data set, but one could objectively conclude the opportunity to make a bit more AND the affordability of the economy, both draw people into a side hustle. Thus, the creation of a business without any employees (well, just one).
America is forming businesses at a record pace, but almost none of them are creating jobs:
US monthly business applications are up to ~500,000, near their highest since the post-pandemic peak in 2020 and 2021.
However, high-propensity applications, those likely to result in hiring employees, now account for just ~30% of the total.
This percentage has HALVED over the last 20 years, down from ~60%.
Furthermore, only 1 in 3 of those high-propensity applications ultimately result in a business with actual employees.
This means the vast majority of new businesses being formed today are one-person operations, with most never providing full-time work even for their founders, and contributing little to employment or economic growth.
America is experiencing a boom in jobless business creation.