10% of Businesses Employ 80% of the Workers

You'll hear a lot of talk about the role of small businesses in the U.S. economy.  It is true that 50% of people work at "small" businesses.    I put small in quotes there because the definition of small business used by government statistics is under 500 people.  I don't really consider a business with 100 to 499 people to be very 'small'.

The reality is the vast majority of the jobs in the US are at a small % of the businesses.

I got data from  the Statistics about Business Size (including Small Business) from the U.S. Census Bureau  their data only goes up to 2008 but its the most recent available.

As of 2008 only 10.7% of the employer firms employed over 20 people.    Business of 20+ employed 82.2% of the total.    
 
This does not count the nonemployer firms that do not have employees.  There are approximately 21 million nonemployer firms most of which are sole proprietors.



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Social Security Disability Beneficiaries : 1957 to 2011

I've heard people say that 'millions' of people have signed up for Social Security disability since the recession and this is one way people have opted out of the workforce.  

I wrote about the 2% drop in the labor force last month.   One point I touched on then was the number of disabled workers and how that impacted labor participation   But when I did that i looked at the BLS data on disabled workers.    However thats not the same as the number of people receiving disability benefits from the Social Security administration.

I found data for the number of beneficiaries receiving Social Security disability from 1957 to 2011 in the Table 5.A17 of the 2012 Annual Statistical Supplement for Social Security

Here are the numbers over time :

To see the percent of workers on SS disability versus the adult population I calculated the SS disability beneficiary # / Civilian noninstitutional population over 16 years old.   I got the population from the BLS labor force statistics I think this is a better way to look at the figures since it is in relation to the adult working age population.

In general it seems the upward trend has been ongoing for around 20 years.   Theres no big spike in the numbers around the recession.

I find the long term trend interesting.   The numbers went up progressively from the 50's to the 70's.   But then they dropped and slowed considerably from around 1975 to 1990.    Then in the 1990's and onward they started growing again at the same rate they were growing in the 50's and 60's.   I have no idea what caused the long term changes in the growth rate.   I would suspect there were changes in policy in the 70's or 80's or maybe changes in demographics impacted it as well.

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Transitioning to More Passive Investments in my Roth IRA

I recently sold off four of the individual stocks that I held in my Roth IRA account.   I had shares of Verizon, AT&T, Merck and Johnson & Johnson.   All but JNJ had performed pretty well overall.   The V and T were up >10% annually during the time I held them, so not bad.  

A bigger reason that I'm selling is that I haven't spent much time managing and actively watching my Roth IRA investments.    It takes time to keep track of stocks and I haven't been dedicating any time to my Roth IRA investments.  So for now at least I think it makes more sense to invest in board index funds if I'm going to set it on 'auto pilot'.  

Overall this year my Roth IRA is up about 15.4%.  Thats not bad at all, but if I'd bought the S&P 500 index (VOO) I'd be up 17.9% in the same period.   So my +15.4% didn't beat a basic index. 

I did have one setback when my shares in the BP oil trust (BPT) dropped significantly.   From what I gather the Wall Street Journal ran an article pointing out that oil trusts are depleting resources and that caused the trust to drop significantly.  Apparently many investors weren't really aware of what they'd bought.   Right now BPT is pretty fairly valued, so I'm holding it for the moment.  Its still paying a healthy dividend and its a good hedge against oil prices.

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Private vs Government vs Non Working Population : 1962 vs 2012

I recently looked at the change in government employment over the years.   I thought it would be interesting to look at a 'now and then' comparison of the labor force from 50 years ago in 1962 versus today.  

Most of the employment numbers I got from the BLS CES page.  I used the 'multi-screen data search' to get historical figures for government and non-government employment.   I also used the numbers for uniformed military and Dept. of Defense civilian employees from my previous article and then added those to get the total military personnel.   I used BLS site to find the labor force participation rate for people over 65 then figured the number of retired workers by multiplying the labor force participation rate of people over 65 versus the total population over 65.   The total population, and how it breaks down by age is off Census sites including the American factfinder.   I used 2010 numbers for age % and I used the 2007 military numbers.   So both those details are a bit off from the actual 2012 numbers but close enough.

First off lets look at who works and who doesn't:

and

Wow, less than 1/3 of the population worked back in 1962.    A lot of that is due to more 1 job families then as well as more children.   A lot more people work now.

Lets further break down the entire population including sub sections of working and non working populations :

and

Private employment and government employment have increased but the military employment has dropped.   Among the non working population there are fewer children and more retirees and fewer portion of the adult age population is non working.

If we just look at the working population and then break down the government versus private jobs :

and

More of the labor force is in private industry and we have fewer people in the military.

Breaking down the sub sections of government employment further :

and

Military dropped significantly from '62 till today.  The USPS was cut in half.  Federal jobs excluding military and USPS dropped a little.  Other state government jobs were flat as a % of all jobs and local government jobs were up a bit.   Educational jobs at the state and local level both grew significantly.   In 1962 we had about 2.9 million jobs in state / local education representing 5.1% of the workforce but by 2012 it had grown to 10.2 million workers which is 7.7% of all jobs.   This bit of information seems noteworthy and I will likely dig into this further in another article to try and see exactly why there are so many more education jobs.

Lastly for reference, here are a couple tables giving the raw figures I used for actual employment numbers (in thousands)

	1962	2012
all employees	54891	132461
all with military	57731	133888
Military	3910	2078
non government	46040	110470
government	7781	21340
non government	47110	111121
dod	1070	651
fed	2433	2831
USPS	587.5	619.3
fed non USPS	775.5	1560.7
state	1624	5052
state edu	487.8	2389.9
state other	1136.2	2662.1
local	4794	14108
local edu	2470.6	7858.4
local other	2323.4	6249.6

and

	1962	2012
total population	186537	312708
Military	3910	2078
non government	46040	110470
government	7781	21340
non working	128806	178820
under 15	57904	61916
over 65	17457	40965
% work >65	19.4%	18.40%
retired	14070	33427
kids	57904	61916
non worker adults	56832	83477
Military	3910	2078
private industry	46040	110470
government	7781	21340
Workers	57731	133888
Non Workers	128806	178820

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