Many self-employed barely at subsistence levelNews added by Benefits Pro on August 25, 2014

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By Dan Cook

Americans tend to regard those who are self-employed as go-getters who can’t abide the rules and regulations of the corporate world and go out on their own to pursue whatever they define as success. Alas, in much of the world today, that definition is a far cry from reality.

Gallup surveyed more than 135,000 self-employed individuals from around the world, and found that, in many other nations, the self-employed exist barely above the poverty line. They are often poorly educated and work for themselves because the alternative would be starvation.

“Eighteen percent of all adults worldwide — or 29 percent of the global workforce — reported being self-employed in 2013. But rather than a positive sign of proactive entrepreneurial energy, high rates of self-employment can often signal poor economic performance. The self-employed are three times as likely as those who are employed full time for an employer to be living on less than $2 per day,” Gallup said in a release.

See also: Baby boomers more entrepreneurial than younger workers

“Only 18 percent of the self-employed rated their lives highly enough to be considered thriving in 2013, on par with the unemployed. By comparison, 25 percent of the population overall and 31 percent of those employed full time for an employer were considered thriving in 2013.”

Geographic concentrations of the self-employed

The bulk of the self-employed live in some of the poorest places in the world, Gallup found. Highest levels are in:
  • Southeast Asia (28 percent),
  • East Asia (28 percent), and
  • sub-Saharan Africa (25 percent)
Smaller concentrations:
  • the former Soviet Union (7 percent),
  • European Union (6 percent), and
  • Northern America (5 percent).
Equating business ownership with self-employment doesn't apply to the nations with high concentrations of self-employed. Those in Australia-New Zealand report the highest business ownership levels — 94 percent. Eight of 10 in North America say their own a business, and in Europe, it's about three in every four among the self-employed.

But the percent drops quickly after that. For Southeast Asia, the Middle East/North Africa, Sub-Sahara Africa and South Asia, the percent reporting that they own a business hovers around 50 percent. The lowest ownership levels are found in the former Soviet Union (33 percent) and the Balkans (38 percent).

Taken together, the average educational and income levels of the self-employed are lower than those who work fulltime for someone else, Gallup found.

“When economists and opinion leaders talk about the self-employed, the typical example people in the U.S. think of is the freelance professional or contractor who has struck out on their own to succeed on their own terms. They picture an entrepreneur, or at least a plucky individualist,” Gallup said. “This is indeed a common form of self-employment in more developed economies, but in much of the world, self-employment is more often an alternative to complete poverty. Rather than the energized professional, the more typical example of a self-employed worker worldwide may actually be the fruit stand vendor, the homesteader, or even the subsistence farmer. Even in the developed world, many individuals find themselves forced into self-employment by adverse circumstances.”

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