Transaction costs have fallen far enough that businesses can be small enough to be run by one person, or at least a small number of people.

Twenty years ago a small ad agency (say) might have been a couple of sales/client-management types who did a bit of writing, a dedicated copywriter, a dedicated graphic designer, and an accountant who also did payroll and basic HR/legal and handled the office lease. Today each of those sales/client-management types could have their own business, working out of a managed shared office, outsourcing writing and graphics as necessary to the copywriter and graphic designer who have their own businesses (because the Internet means there's much less overhead outsourcing and communicating with freelancers), with payroll/legal outsourced to service companies (which probably means less people - maybe 3-5 people handling 10 companies - but each company actually ends up with better access to dedicated specialists than when they had to have one person handling all of those).

This is a great illustration of what reducing the labor pool will do for the demand for labor.

Every laborer that turns entrepreneur will have a positive impact on wages, because it reduces the labor supply while simultaneously increasing the demand for labor.

Wal-Mart eagerly await the day when they can fire all their employees and rehire them as contractors.