Understanding the Growth of the U.S. Gig Economy Through Nonemployer Statistics

The landscape of American work is shifting. While traditional employment remains the norm, there’s a significant rise in the “gig economy,” characterized by independent contractors and self-employed individuals. To track this trend, economists and policymakers rely heavily on Nonemployer Statistics (NES), a critical dataset that reveals the scale and speed of this economic transition.

What are Nonemployer Statistics (NES)?

Nonemployer Statistics measure business establishments in the United States that have no paid employees. To be counted in this dataset, a business must meet two primary criteria: it must be subject to federal income tax and have more than $1,000 in annual gross receipts. These establishments are typically operated by independent contractors.

The U.S. Census Bureau compiles this data using business income tax records provided by the Internal Revenue Service (IRS). This method allows for a comprehensive look at self-employment across various industries.

Measuring the Surge in Gig Activity

Data from the NES highlights a substantial increase in independent business activity over the last decade. From 2015 to 2023, the total number of nonemployer establishments grew from 24 million to 30 million—a 25 percent increase. This growth far outpaced the overall workforce, which grew by only 9 percent during the same period.

Sector-Specific Growth: Transportation and Warehousing

Not all sectors are growing at the same rate. The transportation and warehousing sector has seen an explosive rise, with the number of nonemployer establishments jumping from 1.5 million to 4 million. This represents a 165 percent increase, underscoring the massive impact of ride-sharing and delivery services on the gig economy.

According to the U.S. Census Bureau, taxi and limousine services alone contributed $39.9 billion to this economic activity.

Key Takeaways: The State of the Gig Economy

• Rapid Expansion: Nonemployer establishments rose by 25% between 2015 and 2023.
• Sector Dominance: The transportation and warehousing sector saw a 165% increase in nonemployer businesses.
• Economic Contribution: Nonemployer businesses are key drivers of national economic growth and gig activities.
• Data Source: The NES relies on IRS tax records, ensuring a foundation in official financial filings.

Limitations of the Data

While the NES is a powerful tool, it isn’t perfect. Because the data relies on tax filings, there are a few considerations to keep in mind:

• Filing Errors: The complexity of filing taxes as an independent contractor means some workers may not file correctly.
• Double Counting: Individuals who operate multiple businesses may be counted more than once.
• Lack of Context: The data shows that a business exists, but it doesn’t explain how the work was arranged or the specific nature of the gig contract.

Frequently Asked Questions

How is the gig economy tracked?

Researchers often use nonemployer establishments as a proxy for the gig economy because most gig workers are self-employed and do not hire other employees.

Who collects the Nonemployer Statistics?

The data is collected by the U.S. Census Bureau using records from the Internal Revenue Service (IRS).

When did the Census Bureau start collecting this data annually?

The NES has been collected annually since 1997, following sporadic collections in 1972, 1977, 1987, and 1992.

Looking Ahead

As the gig economy continues to evolve, nonemployer statistics provide a vital baseline for understanding how people earn their living. The dramatic rise in transportation and warehousing suggests that technology-driven platforms will continue to reshape the labor market, pushing more workers toward independent contracting and self-employment.