Hanging Out a Shingle
While job numbers are still down compared to pre-pandemic, a number of residents have reentered the workforce by starting their own business
Changing How We Work
The Capital Region has seen strong job recovery in the wake of the worst public health crisis in a century – through December 2021, our total nonfarm jobs were about 2.2% lower than our February 2020 count, which is in line with the country overall.[1] However, there’s reason to believe that these numbers underestimate Baton Rouge’s jobs recovery, because the traditional nonfarm jobs numbers from Bureau of Labor Statistics do not include the self-employed.
In 2020, the first year of the pandemic, the country saw a large spike in new business applications, as people displaced from their jobs decided to go out on their own. This over-the-year increase was much larger in Baton Rouge than the national average: the Capital Region saw the fourth largest spike of any of the nearly 400 metropolitan areas in the country. From 2019 to 2020, we saw a 58.6% increase in business applications, and six of our nine parishes were in the top 10% nationally in business application growth.
There is now evidence that this spike in business applications led to sustained self-employment. From 2019 to 2021, the number of jobs that were self-employed in the Baton Rouge metro area jumped by 1,721 jobs – an increase of 7.0%.[2] Over that same timeframe, nationally there was only an increase of 4.3%.[3] Taken together, this shows while the Capital Region and United States are roughly even in terms of how they’ve recovered by looking at the nonfarm job counts mentioned above, regionally we have seen a more significant increase in the type of work that is not included in that count: self-employment. In context, this data is a testament to the entrepreneurial nature of our residents, especially in the face of an international crisis. It also shows that we’re a bit closer to pre-pandemic job recovery than it seems at first glance.
Where Are These Residents Working?
Industry information also tells us what type of work these self-employed residents are engaged in. The table below was created using data from Emsi Burning Glass.
More than a quarter of the new self-employed jobs are in the five sectors mentioned above. There is significant variation in the types of work involved in these sectors, but one commonality is that they are project-specific, ranging from completing a haircut to completing a house. One major shift seen in national polling data shows that employees are beginning to value flexibility in their style of work. Polling data shows that location flexibility was the number one intended career change for employees in late 2021.[4] In order to compete for talent in a tight labor market – we currently have more than 30,000 open jobs in Baton Rouge and only about 13,000 residents seeking work – employers may have to adapt their policies to include this type of flexibility. As the economy continues to revert toward pre-pandemic levels in a number of metrics, whether this trend of entrepreneurialism and self-employment continues will be something to watch.
[1] U.S. Bureau of Labor Statistics
[2] Emsi Burning Glass, Q1 2022
[3] U.S. Bureau of Labor Statistics
[4] US Catalyst-CNBC Survey, September 14-16, 2021