Small businesses have long been heralded as key to America's economy. We thought it would be interesting to see which states employ a majority of their workers via small businesses.
The Northwest Has Highest Proportion of Small Business Employees
Montana and Wyoming immediately pop out as the states having the highest proportion of their workers employed by small businesses. According to the US Small Business Administration, construction companies, professional, scientific, and technical services, healthcare and social assistance, and retail trade contribute to this high percentage. In fact, of the over 18,000 construction businesses in Wyoming, ~13,000 involve people who are "self-employed." This could suggest that construction companies, instead of hiring employees, which may be entitled to things such as benefits, instead choose to hire independent contractors instead. In Montana, Real Estate Agents are the largest contributor to small business employment in the state, of which almost 90% are self-employed. Interestingly, the next three largest sectors for small business employment mirror Montana's, being construction companies, professional, scientific, and technical services, healthcare and social assistance, and retail trade.
Eastern US Has Lowest Proportion of Small Business Employees
Two states in the southeast, Florida and Tennessee, have the lowest proportion of their employees working for small businesses. Looking more closely, these states differ very little in the sectors that employ the most people via small businesses.
This difference in percentage can be attributed to the fact that Florida, for example, has many more large businesses in sectors that rely less heavily on independent contractors, like Disney and Publix. In contrast, these independent contractors in Montana make up a much larger proportion of overall employment than in Florida. Thus, while contractor heavy industries like construction and professional, scientific, and technical services contribute to a lot of small business employment in both states, this hiring is a larger proportion of overall hiring in Montana than Florida.
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