A major change in our economy has gone by relatively unnoticed. Over the last two decades there has been a mass movement from the ranks of labor to management. I speak of the large number of those starting new businesses. I am familiar with this world since my parents were both small business owners and I am now in business for myself.
The typical entrant into the work force today begins working in a company and as soon as possible leaves to open his own business. Take a look at the construction industry. Take a look at home services such as electricians, plumbers, heating/cooling. These fields are dominated by small entrepreneurs. Look at high tech industries. The computer business is replete with small, often one man, companies each filling a special niche.
Large companies are usually organizations formed to support small entrepreneurs. Take McDonald’s. It offers its franchisees standard products and mass advertising but the shop itself is a small business. Another is the hotel industry where most hotels are owned by a small business but are linked with others in a chain.
Or we have large corporations who assemble inputs from a host of small suppliers into final products. The best example here is the auto industry.
The result is that a so far unmeasured part of our work force has left “jobs” to open their own business. One could suggest that many of who we believe to be “unemployed” are simply those who left the work force to be their own boss. They do not collect unemployment but nor have they reentered the work force.
This phenomenum spills over from the economy into the general society, politics, and way of living. The small business owner does not fit into the classic world of labor and unions versus management. They are all labor and manager wrapped into one. Their attitude toward government is generally, “please go away.” But they are the first to seek favorable access to government contracts through breaks for small business.
It is time to do a thorough major study of how this massive move from labor to management has changed the economy. A major undertaking for academia and the think tanks.