The Trends In SelfEmployment Essay Research Paper

The Trends In Self-Employment Essay, Research Paper

The Trends in Self-Employment

The lack of stability in the traditional workplace is resulting in a change in the way people do business. Instead of looking to large corporations or government offices for full-time paid work, people are taking matters into their own hands. Self-employment is growing as an opportunity for everyone who needs work. Two popular sub-categories of self-employment are home-based businesses and electronic commerce.

With reduced employment opportunities in larger companies and government, many people seeking employment have started looking towards self-employment and small firms as a large source of jobs. In Canada, 3 out of 4 new jobs created in the 1990 s have been in the form of self-employment (McJobs to My Own Job). While some self-employed workers turn to this type of employment by choice and earn high incomes, most of the increase in self-employment in the 1990 s has been driven by the lack of employment alternatives such as paid work and permanent work. In 1990, the rate of self-employment as a share of total employment was twelve point one per cent and rose to fifteen point four per cent in 1995 (Pro-Quest, 4). The growth of self-employment has been attributed to high and rising unemployment rates especially among older workers and well-educated young people, lack of suitable work, and low wages, among various other reasons. Eighty-five per cent of all jobs created in Canada since 1979 are accredited to small businesses and medium sized business (Internet 11).

Self-employed workers, on average, are more likely than paid workers to work on a full- time, full year bases. Many self-employed workers also work extra long hours. One in three (32.1%) of self-employed men and one in five (32.1%) self-employed women work more than ten hours or longer days, six or seven days week. This is compared to five point three per cent of paid working men and one point two per cent of paid working women. Self-employed workers are twice as likely to work long hours than paid workers are (ProQuest, 4).

The strong performance of self-employment relative to paid employment over recent years in Canada has sparked a wide interest in many people starting up their own businesses or going to work for small business owners. Over the 1990-1996 period, self-employment grew by three point three per cent per year on average, while paid employment grew only by zero point two per cent per year(Internet 1). Over this period of time there was a net increase of 511,000 in the total number of people employed and approximately 387,000 (75%) of these people reported themselves as being self-employed (Internet 1)

There are two types of self-employment, employers who are self-employed (ESE) and own-account self-employment (OASE). During the 1976-1996 period, growth in employers who are self-employed (ESE) had been more rapid than in own-account self-employment (OASE). But in the early 1990 s growth in own account self-employment (OASE) grew rapidly while growth in employer self-employed (ESE) fell to almost zero (Internet 1). Despite the overall growth in self-employment, growth trends in owner own account self-employment (OASE) and employer self-employed (ESE) have diverged significantly since early 1990 s (Internet 1). But the weak economy since the early 1990 s contributed to the slowdown in the growth of employer self-employed (ESE) and to the pickup of own account self-employment (OASE) growth (Internet 1). However, it is difficult to measure this effect and therefore, it is impossible to say with any degree of precision what proportion of these trends will reverse themselves as paid-employment recovers. The on going weak level of activity in the economy may have given rise to these new trends in employment.

There is an increased draw towards owning one s own business, and working primarily from the home. Technological advances such as fax machines and the internet allow people from all over the world to network and market their products and services to a global community, even while they sit at home in their pajamas. Even though home-based businesses are a new trend, a recent study by Entrepreneur Magazine showed that home-based businesses already account for $454 billion in revenue and the number of home-based businesses is continuously growing. Home-based businesses have increased from twenty six point four million home-based businesses in 1993 to forty point two million home-based businesses in 1999 (Internet 4).

Millions of people are taking the steps and setting up their own customer service-orientated businesses from their homes. The reason so many people are turning towards home-based self-employment is because of the benefits. It holds all the same benefits as owning your own business except they can do it in the comfort of their own homes. They can also avoid job insecurity and changes that today s corporations are going through, have control, make decisions, work the way they chose, control how much time the invest, how much money they want to make, and they can make their own schedules. Home-based businesses also require little overhead so people don t have to worry about working so hard to recoup their costs. In the US alone there are over four million documented home-based businesses, but there are at least fifty million including all the home-based busines