June 21, 2004 -- During the economic boom of the late 1990s and even through the ensuing bust, millions of Americans formed their own businesses, built in many cases on the backs of unpaid employees. The number of businesses in the United States with no paid employees increased by 14.3 percent, to 17.6 million, between 1997 and 2002, according to the Census Bureau. Moreover, the sales of these businesses exploded to $770 billion in 2002, up 31 percent from 1997.
The Census Bureau indicated that 15.4 million of these businesses were individual proprietorships, with the remaining 2.2 million businesses split almost evenly between partnerships and corporations that don't file payroll taxes.
The real estate, leasing and rental sector added the most businesses, rising by more than 480,000 to 1.88 million, as individuals hoped to cash in on the hot real estate market spurred on by low interest rates. The sales in this sector soared 59 percent, to more than $160 billion, which also made it the single largest non-employer industry by sales. Non-employers accounted for almost one-third of all receipts in the real estate sector, the highest such share in any sector.
Educational services made the largest percentage leap in terms of both total establishments and sales, growing by 47 percent and 64 percent respectively.
The Census report pointed out that non-employer businesses grew much faster than paid-employee businesses in terms of both the number of businesses and sales. However, while non-employers accounted for more than 70 percent of total businesses, they accounted for less than 4 percent of total sales.