The Spread of Proprietors/Independent Contractors In the US

A few weeks ago EMSI looked at the states with the largest share of 1099 workers — that is, proprietors/independent contractors, farm workers, and others not covered by unemployment insurance. We found that since 2006 every state (as well as D.C.) has seen growth in noncovered workers.

Simply put, the number of workers outside traditional employment rolls is on the rise.

We have since mapped out job growth among 1099 workers in every U.S. county from 2006-2011 to see where this increase in nontraditional employment is most evident. And the data makes the trend even clearer: The majority of counties across the nation have seen at least a small increase in noncovered workers, and some have seen huge increases. This is especially the case in the western and southwestern portions of the U.S.

It should be emphasized that not all 1099 workers captured in the EMSI Complete dataset are proprietors/independent contractors. However, if we use growth in the 1099 economy as a loose proxy for entrepreneurial behavior (i.e., a backbone for economic growth and business development), it’s very apparent which areas are progressing in that arena and which areas are falling behind.

The counties with the most 1099 job growth are mostly in fairly isolated areas:

1, Loving County, Texas, 114% (the least populous county in the US)
2, Todd County, South Dakota, 81%
3, Calhoun County, West Virginia, 63%
4 (tie), Roane County, West Virginia, 57%
4 (tie), Reagan County, Texas, 57%
4 (tie), Union County, Florida, 57%
7 (tie), Wayne County, Utah, 54%
7 (tie), Shackleford County, Texas, 54%
9, Ochiltree County, Texas, 53%
10, Kenedy County, Texas, 52%

Seven of the top 12 counties, in fact, are in Texas, including Midland County. Oil and gas extraction, the fastest-rising sector for 1099 workers in the US, is driving most of this growth in workers outside the unemployment insurance (UI) system.

In contrast, the counties showing the biggest job loss in 1099 employment have a more diverse population base:

1, Ziebach County, South Dakota, -23%
2 (tie), St. Louis City, Missouri, -15%
2 (tie), Roanoke County, Virginia, -15%
4, Ohio County, West Virginia, -14%
5, Sully County, West Virginia, -13%
6, Oliver County, North Dakota, -12%
7 (tie), Marshall County, South Dakota, -11%
7 (tie), Forsyth County, Georgia, -11%
9, Pennington County, South Dakota, -10%
10, Decatur County, Iowa, -9%

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type of employee

This type of employment will continue to grow as things like Obamacare give employers more reasons to never hire a in house employee again.