Exhausted from work and feeling the pain of inflation, Americans are turning to a time-honored capitalist tradition: starting their own businesses.
Americans launched about 5 million businesses last year, according to a new survey from Gusto, an HR and payroll platform. Since the onset of the pandemic three years ago, Americans have created 15 million new businesses, compared to 10 million in the three years prior to the health crisis, Gusto said. At the beginning of the pandemic, many people started new businesses out of necessity amid a rise in layoffs and business closures.
A noticeable shift in the surge of new businesses since the pandemic is the presence of more women, Gusto’s survey shows. About 47% of new businesses last year were started by women, compared to 29% in 2019, before the pandemic.
The desire for extra income amid the highest inflation in 40 years has also led more people to start businesses. About 41% of those who started a venture last year said they were motivated by the desire for financial stability or to supplement household income, up from 24% the previous year, Gusto found.
About half of the people who created businesses last year worked full-time in their companies, suggesting that 2.5 million people were effectively pulled out of the workforce. And as many of these new businesses are hiring, this increases competition for workers.
The trend of starting new businesses could be a good sign for the economy in the long run.
Source: CBS News