Transcript Economic Impact Study: Select Findings

Bigger than You Think
The Economic Impact of Microbusiness
Connie E. Evans, President & CEO
CAMEO 20th Anniversary Celebration
June 17, 2014
Who We Are
• National trade association for U.S. microfinance and
microbusiness
• More than 450 nonprofit community lenders and
business service providers across the country
• Based in Washington, D.C., since 1991
• Mission: Create economic opportunity for underserved
entrepreneurs
Our Work
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Initiatives
Micro Capital Task Force
Industry Strategic Plan
Building Capacity in the Southeast
Strengthening Statewide Networks
Re-Imagining Technical Assistance
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Core Functions
Communications
Policy and Advocacy
Knowledge Sharing and Community
Research
National Campaign
Multi-Stakeholder Alliance
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Product, Service and
Capital Solutions
Research Report Release
Bigger Than You Think
• Business that employs the owner and up to four
others
• 20 percent of the labor force = ~26 million direct
jobs
• $4.87 trillion in direct, indirect and induced
economic activity
• 92 percent of all businesses
• The largest segment of small business
The Jobs Story
The story of microbusiness is job creation
Direct
26m jobs
Indirect
1.9m jobs
• 41.3 million jobs
• 31% of private sector employment
Induced
13.4m jobs
Direct = 19.1m microbusinesses that employ only the owner and 6.9 m individuals employed in microbusinesses.
Indirect = Purchasing and contract spend of microbusiness
Induced = Personal spend on goods and services by individuals employed in microbusinesses
Source: Insight Center calculations working with MIG, Inc., which produces IMPLAN, an input-output analysis model
Persons Employed in Microbusinesses
Manufacturing
11,693,000
Professional and business services
17,291,000
Government
22,535,000
Trade, transportation, and utilities
24,941,000
Microbusinesses, including working owners
26,022,720
Education and health services, including public schools and hospitals
28,804,800
0
5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000
$23.08
Income and Wages by Hours Worked
$17.38
$19.23
$19.86
$17.09
$15.38
$19.23
$13.14
$15.00
$13.71
$16.22
$20.00
$16.73
$18.46
$25.00
Microbusiness Owners
Microbusiness Employees
Employees in businesses with five or more
employees
$10.00
$5.00
$0.00
20-39 hours per wk.
40 hours per wk.
41-59 hours per wk.
60 or more hours per
wk.
The Assets Story
Impact of Microbusinesses:
Owners, Employees, and Their Families
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A higher percentage of youth (16 to 24) living in households with a
microbusiness owner are educationally striving (65.3 percent in 2010),
such as attending college, than youth living in households of
microbusiness employees (62.4 percent in 2010) or non-microbusiness
households (59.6 percent in 2010);
•
The median annual sales and receipts for a non-employer
microbusiness owner without a college degree was estimated to be
$18,819, compared to $18,973 for non-employers with a college degree
in 2007;
•
Persons without a college degree constitute 52 percent of
microbusiness owners.
Annual Sales and Receipts of Non-employer
U.S. Microbusinesses by College Degree
No College Degree
College Degree
21.5%
24.9%
23.7%
27.8%
Less than $5,000
$5,000 to $49,999
48.4%
53.5%
$50,000 or more
Economic Impact of Microbusinesses:
Anti-Poverty Strategy
• In 2010, the median household income for 12.0 million female-headed
households without a microbusiness owner or employee was $31,754,
whereas the median income for the 2.88 million female-headed
households with a microbusiness owner or employee was $37,974;
• Female-headed family households in which at least one person owns a
microbusiness generated $8,000 to $13,000 more in annual household
income than similar households without a business owner in 2010. An
additional $8,000 to $13,000 in income could make a difference among
female-headed households with children below 18 years, among whom
the poverty rate was 41 percent in 2011;
• Female-headed households who were microbusiness owners earned at
higher levels in 2010 when that microbusiness was less than 50 percent
of their total household income, compared to female-headed
households where the microbusiness was 50 percent or more of
household income.
Business Ownership Builds Assets and
Creates Wealth
Median Net Worth, $1,000
Source: AEO analysis with Robert Fairlie of Survey of Income & Program Participation, 2008 Microdata
Characteristics of
Microbusinesses
Microbusiness Owners
Median Annual Sales and Receipts of U.S. Microbusinesses by
Business Type
$160,000
$136,163
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$23,383
$21,384
$20,000
$6,205
$7,794
Type 2: Part-time, not
primary income
Type 3: Part-time, primary Type 4: Full time, less than Type 5: Full-time, $50,000
income
$50,000 in sales
or more in sales
$0
Type 1: Newcomer, no
prior experience
Annual Change in Median Sales and Receipts of U.S.
Microbusiness by Amount of Start-up Capital by Age of
Microbusiness, 2007:
$40,000
Amount of Start-up
Capital
Annual Change in Median Sales and Receipts
$30,000
$20,000
Less than $5,000
$5,000 to $9,999
$10,000 to $24,999
$25,000 to $49,999
$10,000
$50,000 to $99,999
$100,000 to $249,999
$250,000 to $999,999
$0
Year 2
Year 3
Year 4
Year 5
Years
6 to 8
Years
9 to 18
-$10,000
Age of Microbusiness
-$20,000
Years
19 to 28
Year 29
or older
“If one in three Main
Street microbusinesses
hired just one employee,
the country would be at
full employment”
Bigger than You Think
The Economic Impact of Microbusiness
Connie E. Evans, President & CEO
CAMEO 20th Anniversary Celebration
June 17, 2014