Is self-employment a bad thing or a potential boon for New Brunswick?

There was an interesting article in the Economist magazine this week about the rise of self-employment in Britain and the conclusion by economists that this is basically a bad thing. This runs somewhat counter to the “start-up” narrative that has become all the rage. We want people to “start their own businesses” but we think self-employment is a bad thing?

Of course these are two different concepts – in theory. The sexy start-up is an attempt to build a business based on a novel idea or niche market opportunity. Its goal is to create new wealth. Most self-employment is meant as a source of income and in many cases – think folks who sell stuff at the farmers’ markets – it is purposely meant to be a part time gig.

First, here are the numbers for New Brunswick. The average income from ‘self-employment’ (as derived in Statistics Canada Neighbourhood Income Survey) in New Brunswick is $13,072 per person reporting self-employment income. Remember on this survey a person can be reporting both wages and salary income (day job) and self-employment income (farmers’ market). Nevertheless, the spread between the two sources of income is substantial. In 2000, the average self-employment income was 53% below wages and salary income. By 2013 that gap had swelled to 65%. Again, this is hardly apples-to-apples as lots of income derived through self-employment may not be reported and as mentioned above the type and duration of the work is likely much less.

selfemployment1It is also important to point out the spreads between self-employment and wage income across Canada are similar to New Brunswick (64% in 2013) so this is not just New Brunswick – but on the surface it would seem the economists are right.

However, I think we need to reconsider ‘self-employment’ particularly as most economists are predicting a sharp rise in ‘contractor’ workers (think Uber and Shopify) in the coming year in line with the growing number of Internet-based work to worker matching services.
New Brunswick can sit back and do nothing or we can try and get in front of this thing to benefit New Brunswickers.

Since 2000, the number of persons reporting self-employment income in New Brunswick is actually down by six percent while rising by 12 percent across Canada.

selfemployment2

So here’s the deal. New Brunswick has pockets of high unemployment around the province and dozens of communities that desperately do not want their people to leave. Why can’t self-employment fill the gap? I’m not talking about self-employment based on local markets but based on external markets. There are dozens of firms right now looking for workers to do the job from home (or it could be from small office environments set up in small towns). These are mostly full time jobs and that offer fairly good wages (someone posted that the Shopify jobs are starting around $40,000/year).

It’s worth thinking about.

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3 Responses to Is self-employment a bad thing or a potential boon for New Brunswick?

  1. Trevor says:

    With CETA and TPP self employed could fill a gap for micro multinationals https://medium.com/micro-multinationals/micro-multinationals-of-the-future-abcdbcfe7a10

  2. I think there’s some confusion here – Shopify is a place for building your own website -it’s not part of the on-demand economy like Uber at all – nor do they contract with private people to fulfill part of their business – they provide e-commence tools for online sellers of merchandise.

    That said – (gratuitous plug coming) my new startup in Moncton – GoValu.com – recently launched a home grocery delivery service – which is similar to US based Instacart in many ways – is in fact looking for EXACTLY these types of people – right here in good old Moncton.

    I can tell you from our early efforts – it’s not nearly as easy as it sounds to get people involved in this kind of work – for myriad reasons – not the least of which is that people are looking for full-time paychecks from someone else – and the notion of self-employment doesn’t really seem to be very well received.

    Comparing employment in the on-demand economy – to ‘work from home’ jobs – is like comparing apples and hand-grenades, IMHO.

    “dozens of firms right now looking for workers to do the job from home”

    I know of precisely ZERO companies doing this – which isn’t to imply I know everything – but I’m in the sweet-spot of this business space and am not aware of any.

    Perhaps you could let us know of them, as I’m not aware of any legitimate opportunities in this space.

    While I’m well aware of many schemes/scams – if there’s some secret demand for at-home workers, you’d think they’d be easier to run across – and I could help connect these employers with dozens of out-of work IT types in Moncton who would look forward to a job like this.

    One last plug – if you’d like Free Delivery on your 1st order w/ us – use coupon code TRYUS at the checkout to save the $9.99 delivery fee :)

    Andrew Sturgeon/GoValu.com

  3. mikela says:

    Good luck with your ‘govalu’, although Mr. Campbell clearly said ‘export oriented’. Grocery Gateway franchises out of Toronto, but I’m not sure how old Mr. Sturgeon is, but there was a ‘boom’ of these types of businesses about a decade and a half ago, but they tend to disappear unless they are in very large markets. But like I’ve said before, if you can make a go of a business serving local markets in the maritimes you should be writing a book, because ANYBODY can sell in huge markets, but in NB that takes real skill.

    We just moved from southern ontario to Sudbury, which is similar to the maritimes in many ways, just the other day was an article on a guy who developed a tool for cutting beer bottles so they can be used as glasses. It now sells in 50 countries thanks to a start on kickstarter, and revenues are 4 million a year. A constant problem with these types of companies is that in typical canadian fashion the guy says “I could make a lot more money if I worked harder, but I only have to work 4 hours a week”.

    Thats a pretty sweet deal, unfortunately the product is probably made in the US or even China, so essentially its become the case where small businesses are most successful when they have the fewest employees-and thats a LOT of businesses you need to start up.

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