By Maria Valdez Haubrich
Being an entrepreneur is challenging, and there are times when it seems overwhelming. For me, this past week was one of them—so when I saw this article by Scott Shane in BusinessWeek, I read it with interest.
Shane analyzed several studies from a variety of sources to explore what he calls the “entrepreneurial paradox”: On average, self-employed people make less money, work long hours and have far more job stress than people with regular jobs. But despite all of that, self-employed people have greater job satisfaction, according to a recent report from the Pew Research Center (report.)
Here’s a closer look at the data Shane assessed:
Several studies show that self-employed people don’t make more than employees do, and some studies actually show they make less. For instance, one study reported that the median earnings of people who have been entrepreneurs for 10 years are just two-thirds of the amount they would have made as employees. In the Pew report, 40 percent self-employed workers said their family is either barely getting by or not meeting basic living expense.
A Dartmouth College study from 2004 found that self-employed people’s work-related stress causes conflict with spouses, interferes with sleep and makes it hard to enjoy leisure-time activities.
But in spite of these factors, the Pew report found that 39 percent of self-employed people are “completely satisfied” with their jobs. Just 28 percent of employees felt the same. Why?
The Pew report concludes that what makes the difference in satisfaction is the autonomy and flexibility that entrepreneurship provides. Flexible hours, being your own boss and being in a smaller organization where you can interact with lots of people are all things that entrepreneurs value enough to put up with stress, uncertainty and hard work.
As I read Shane’s article, I was nodding my head in agreement—I’ve definitely felt the stress, financial uncertainty and overwhelming workload of being an entrepreneur. But I’ve also felt the joy of making my own schedule, being in charge of what I do and working with great business partners. No wonder that so many people stick with entrepreneurship despite the downsides.