Incorporations Surge Even in Unpredictable Economy
Economic indicators are showing that a sluggish economy and an uncertain world are not stopping Americans from starting their own businesses in record numbers.
Over the last year, self-employment has increased by 400,000, according to a Labor Department survey, reported by the Wall Street Journal.
In the state of Delaware, an incorporation center, there has been a big increase in start-up businesses. In the last fiscal year that ended June 30, there was a 14 percent increase in incorporation fees collected from those filing the paperwork to start their own businesses and the number continues to climb.
"This is a pretty good bellwether for what is happening around the nation," Mark Zandi, chief economist with Economy.com, told the Journal. "You can use Delaware as a window into whether the entrepreneurial spirit is being revived or not."
California is also seeing an upswing in incorporations. "Our data show that new businesses incorporations are running very high," Michael Bernick, director of California's Employment Development Department, told the Journal, adding that even during the burst of the tech bubble, the number stayed steady and has increased in 2003.
The Commerce Department released a report last Wednesday showing that proprietor's income, excluding the farm sector, was up 8.6 percent over last year, which is striking when compared to the 2.3 percent increase in corporate wages and salaries, the Journal reported. The Commerce report also stated that incomes had increased 0.4 percent between September and October. In fact, proprietor’s income has bested corporate income in 13 of the last 14 months.