We talked with Keith Hall, president and CEO of the National Association for the Self-Employed (NASE), about the rise of self-employment in the past couple of years, and what this means for those who want to be their own boss and the economy as a whole.
President and CEO, National Association for the Self-Employed
What is self-employment and how does it relate to small business and entrepreneurship?
If you talk to the Small Business Administration (SBA), a small business is any business that has fewer than 500 employees. And in my world, a business that has 450 employees, that’s a pretty big business. So when I think of small business, and particularly the members that we serve, maybe the definition is closer to “self-employment.”
But small businesses are those businesses where someone had an idea or a dream — or as has been the case more recently, had the necessity to find some way to generate earnings to support their family. And they do that on their own, through their own personal efforts.
Many of these self-employed people I mentioned didn’t really have a dream or an idea. Whether it’s as a result of the pandemic or otherwise, they just woke up one day and found themselves at home, their business closed. They can’t go to work, they got laid off. And they said, “You know what I’m going to do?” They recognized their skills were useful in their neighborhoods, in their local communities.
They went to their friends and their neighbors, maybe their former client, and perhaps they provided the exact same services they did before. But now they’re doing it on their own. They’re getting paid directly, and without even realizing it, what they’ve done is create a new job.
What long-term impacts will the COVID-19 pandemic have on small business and self-employment?
I really believe it’s going to be significant. In the past 18 months, the NASE has had more new members join every month than at any time in our history, and that just goes to show that more people out there are realizing self-employment is an option.
During the pandemic, people realized that they’re a lot happier and more satisfied when they can take their kids to and pick them up from school. Now they can find a way to be part of the PTA at school, because they can just join the Zoom call. They can now be part of the administration at their church and so many other things they maybe never had time for before. And I think all of those things will become part of our normal management of a small business from today forward.
As you look at the impact of the pandemic and technology, this awareness of what self-employment can provide for one’s family is only going to expand the opportunities for it. And it’s going to dramatically expand the number of people who want to choose that as a way to support themselves and their families. I don’t see any other outcome.
How will the pandemic affect the way wealth is distributed and capital is accessed, especially for women and minority business owners?
In our organization, over half of our new applications for grants are coming from minority-owned businesses, and almost 60 percent of those grants are for female-owned businesses. So we really are seeing a dramatic increase in access for minority-owned businesses.
Historically, African American-owned businesses, and particularly female-African American-owned businesses, haven’t had the same access to resources like financial institutions, and it was hard for them to get a loan. And that’s just an abomination, but it’s a fact that it has always been difficult. I think that through the PPP (Paycheck Protection Program), the SBA has expanded the number of banks these business owners deal with, so the process has become easier.
I think the government has recognized this move to working from home, so there’s an awareness, on both sides of the aisle, where everyone is recognizing this demographic of self-employment at a higher level. And couple that with the current environment of being more aware of the discrepancies that should have never existed, but certainly have, I think you’re going to see new laws and new conversation. And all of those things are already making a difference in wealth redistribution and access to services for minority-owned businesses.