Open Access Journal Article

A ‘White Lie’ of Business Informality: An Exploration of Non-Registered White-owned Businesses in the United States of America

by Michael J. Pisani a,* orcid
a
Department of Management, Central Michigan University, Mt. Pleasant, Michigan, United States of America
*
Author to whom correspondence should be addressed.
JEA  2024, 64; 3(3), 64; https://doi.org/10.58567/jea03030002
Received: 12 July 2023 / Accepted: 13 August 2023 / Published Online: 15 September 2024
View Full-Text
Download PDF

Abstract

Utilizing a 2021 nationally representative sample of 7,504 White-owned employer businesses (WOBs) in the United States of America (USA), the extent, and the determinants of WOB business registration are estimated. Business registration is employed as a proxy for business in/formality. Approximately one-fifth (22.5%) of all employer WOBs are unregistered or informal business concerns hidden from government purview. The primary determinants of employer WOB informality are business size (annual revenues under $500,000 and few paid employees), a business owner with less than a four-year college degree, and an upbringing in a lower- or middle-class environment, among other findings. Notably, this research reveals the white lie of the magnitude of White-owned employer business informality in the USA.

Keywords: White-owned employer businesses; United States of America; Informality; Entrepreneurship;
Copyright: © 2024 by Pisani. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

Share and Cite

ACS Style
Pisani, M. J. A ‘White Lie’ of Business Informality: An Exploration of Non-Registered White-owned Businesses in the United States of America. Journal of Economic Analysis, 2024, 3, 64. https://doi.org/10.58567/jea03030002
AMA Style
Pisani M J. A ‘White Lie’ of Business Informality: An Exploration of Non-Registered White-owned Businesses in the United States of America. Journal of Economic Analysis; 2024, 3(3):64. https://doi.org/10.58567/jea03030002
Chicago/Turabian Style
Pisani, Michael J. 2024. "A ‘White Lie’ of Business Informality: An Exploration of Non-Registered White-owned Businesses in the United States of America" Journal of Economic Analysis 3, no.3:64. https://doi.org/10.58567/jea03030002
APA style
Pisani, M. J. (2024). A ‘White Lie’ of Business Informality: An Exploration of Non-Registered White-owned Businesses in the United States of America. Journal of Economic Analysis, 3(3), 64. https://doi.org/10.58567/jea03030002

Article Metrics

Article Access Statistics

References

  1. Andreas, Peter (2013), Smuggler Nation: How Illicit Trade Made America, New York, NY: Oxford University Press.
  2. Blanchflower, Dwight G. and Andrew J. Oswald (1998), “What Makes an Entrepreneur?” Journal of Labor Economics, 16(1), 26-60. https://doi.org/10.1086/209881
  3. De Soto, Hernando (2000), The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, New York, NY: Basic Books.
  4. De Soto, Hernando (1989), The Other Path: The Economic Answer to Terrorism, New York, NY: Basic Books.
  5. Gunter, Samara R. (2017), “Dynamics of Urban Informal Labor Supply in the United States,” Social Science Quarterly, 98(1): 16–36. https://doi.org/10.1111/ssqu.12284
  6. Hart, Keith (1973), “Informal Income Opportunities and Urban Employment in Ghana,” Journal of Modern Africa Studies, 11(1), 61–89. https://doi.org/10.1017/S0022278X00008089
  7. Hart, Keith (1970), “Small Scale Entrepreneurs in Ghana and Development Planning,” Journal of Development Studies, 6,104–20. https://doi.org/10.1080/00220387008421338
  8. Losby, Jan L., John F. Else, Marcia E. Kingslow, Elaine L. Edgcomb, Erika T. Malm, and Vivian Kao (2002), “Informal Economy Literature Review,” Washington, D.C.: Aspen Institute, available at: https://www.aspeninstitute.org/wp-content/uploads/2017/04/InformalEconomyLiteratureReview.pdf, accessed on July 19, 2021.
  9. Medina, Leandro and Friedrich Schneider (2018), “Shadow Economies Around the World: What Did We Learn Over the Last 20 Years?” IMF Working Paper (WP/18/17), January, available at: https://www.imf.org/en/Publications/WP/Issues/2018/01/25/Shadow-Economies-Around-the-World-What-Did-We-Learn-Over-the-Last-20-Years-45583, accessed on June 29, 2023.
  10. Orozco, Marlene, Jonathan Furszyfer, Paul Oyer, and Jerry I. Porras (2022), “State of Latino Entrepreneurship: 2020 Research Report,” Stanford Latino Entrepreneurship Initiative, available at: https://www.gsb.stanford.edu/sites/default/files/publication/pdfs/report-2021-state-of-latino-entrepreneurship.pdf.
  11. Orozco, Marlene, Alfonso Morales, Michael J. Pisani, and Jerry I. Porras (Eds.), (2020), Advancing U.S. Latino Entrepreneurship: A New National Economic Imperative, West Lafayette, IN: Purdue University Press.
  12. Pampel, Fred C. (2000), Logistic Regression: A Primer, Thousand Oaks, CA: Sage Publications.
  13. Pisani, Michael J. (2023), “Simplifying the Connection Between Acculturation and Ethnic Entrepreneurship Using Targeted Survey Questions for Quantitative Analyses,” Sage Research Method Cases in Business. https://doi.org/10.4135/9781529667493
  14. Pisani, Michael J. (2022), “Firm Registration Among White- and Latino-Owned Employer Enterprises,” Fórum Empresarial, 26(2), 1-30.
  15. Pisani, Michael J. (2021), “New Age Informality: Hispanics and the Sharing Economy,” Administrative Sciences, 11(1), 23,1-23. https://doi.org/10.3390/admsci11010023
  16. Pisani, Michael J. (2019a), “From Informal to Formal: An Exploration of the Firm-Level Determinants of Sectoral Graduation in El Salvador,” Academia Revista Latinoamericana de Administración, 32(1), 79-92. https://doi.org/10.1108/ARLA-03-2018-0071
  17. Pisani, Michael J. (2019b), “The Informal Competitor Next Door: The Business Impact on Formal Enterprises in the Metropolitan Region of Paraguay, Asunción, Paraguay: CADEP.
  18. Pisani, Michael J. and Alfonso Morales (2020), “Informality and Latino-owned Businesses: A National Portrait of Unregistered Latino-owned Businesses,” Social Science Quarterly, 101(2), 588-603. https://doi.org/10.1111/ssqu.12763
  19. Pisani, Michael J., Chad Richardson, and J. Michael Patrick (2008), “Economic Informality on the U.S.-Mexican Border: A (Re)View from South Texas,” Journal of Borderlands Studies, 23(2), 19-40. https://doi.org/10.1080/08865655.2008.9695696
  20. Portes, Alejandro, Manuel Castells, and Lauren A. Benton (Eds.) (1989), The Informal Economy: Studies in Advanced and Less Developed Countries, Baltimore, MD: Johns Hopkins University Press.
  21. Portes, Alejandro and Rubén G. Rumbaut (2014), Immigrant America: A Portrait, 4th edition, revised, updated, an expanded, Oakland, CA: University of California Press.
  22. Portes, Alejandro and Richard Schauffler (1993), “Competing Perspectives on the Latin American Informal Sector,” Population and Development Review, 19(March), 33-60. https://doi.org/10.2307/2938384
  23. Prahalad, C.K. (2010), The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, Revised and updated 5th anniversary edition, Upper Saddle River, NJ: Wharton School Publishing.
  24. Richardson, Chad and Michael J. Pisani (2017), Batos, Bolillos, Pochos, and Pelados: Class and Culture on the South Texas Border, revised edition, Austin, TX: University of Texas Press.
  25. Richardson, Chad and Michael J. Pisani (2012), The Informal and Underground Economy of the South Texas Border, Austin, TX: University of Texas Press.