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  1. Business

PolitiFact: Santorum's math on U.S. workers not owning a business is not far off

The statement

"Ninety percent of American workers don't own their own business."

Rick Santorum, April 5 on Face the Nation

The ruling

Santorum, a potential candidate for president in 2016, argues that Republicans should focus more on people working for businesses than people who own businesses, if only because of simple math.

"I've made the central focus of what I've been out talking about the fact that 90 percent of American workers don't own their own business. They're actually working for businesses and that Republicans better have a message that appeals to their place in the world today and their opportunity to rise in society," Santorum said on CBS' Face the Nation.

We wanted to know whether Santorum is correct.

Matthew E. Bynon, a staff member at Santorum's organization Patriot Voices, sent us a link to a policy brief, "The Causes of Racial Disparities in Business Performance," from the National Poverty Center. This 2008 article mentions in its introduction, "Roughly one in 10 workers owns a business," which are "13 million business owners." The report based its numbers on data from the U.S. Census Bureau.

The most recent census report Survey of Business Owners estimated the number of business owners as 20.4 million in 2007. According to U.S. Bureau of Labor Statistics, the labor force in 2007 was about 153 million people. So there were about 13.3 percent business owners, a little higher than Santorum's source. A new census survey about business owners will be released in May.

The economists of the Small Business Administration used more recent data from 2012 and found a slightly higher percentage of business owners, as well. The SBA found that about 16 percent of people owned a business, said staff member Miguel Ayala.

It's important to note that the SBA based its 16 percent number on total employment of about 116 million people. If you use the entire labor force, both employed and unemployed, the number drops to 11.8 percent.

So the SBA estimates the total of business owners in the United States to be 18.3 million people. The census found out that there were 20.4 million business owners back in 2007. We couldn't help noticing that the data Santorum referred to does not match, because it says 13 million.

So we asked Robert W. Fairlie, economics professor at the University of California at Santa Cruz, for an explanation. Fairlie was one of the authors who wrote the study "Black-, Asian-, and White-Owned Businesses in the United States," which was used for the NPC policy brief Santorum referred to.

Fairlie said there are different ways to define small-business owners. Not all people who own a business do it as their main source of employment.

"The 20.4 million businesses represents all business entities and not necessarily what someone does for their main job activity. If someone gets a little self-employment income, but mainly works as a wage or salary worker, then they would not get included in the 13 million number of business owners, but would get included in the 20.4 million definition," Fairlie said in an email.

So several sources show that Santorum's number is close. However, there are different ways to count whether someone owns a business or not, and the percentages are approximate. Overall, we rate his statement Mostly True.

Katharina Fiedler, PolitiFact staff writer

Edited for print. Read the full version at PolitiFact.com.

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