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Results of a CNN Opinion Research Corporation’s nationwide survey reveal that 87 percent of us believe we’re still in the throes of a recession and 69 percent say things are going badly in the country today. And as I talk with small business owners and read your e-mail, my impressions mesh with CNN survey results.
Simultaneously, however, there’s a loud brouhaha brigade declaring the recession is over. My sincere belief: The noisemaking is fomented by those who profit from active stock market investing and rising stock prices. And the cheerleading has worked for the market, which has gained nearly 2000 points this year. Companies cut jobs and strip other costs to improve their balance sheets and drive up stock prices. However, few businesses report sales growth because the balance sheets of most consumers remain gutted, which means you’re likely to save more, pay off debt faster, and spend less to improve your personal economy.
More than two million jobs have been lost since the recession began. While there has been a slight upsurge in rehiring recently, it’s offset dramatically by twenty consecutive months of net job losses and more than 500,000 new unemployment claims monthly. Those who no longer qualify for unemployment insurance, were never eligible to collect it, or are underemployed due to reduced hours or salaries are not counted among the officially unemployed. Actual unemployment and underemployment numbers far exceed the current 9.7 percent. Haver Analytics, a private economic and business analysis firm, estimates current “real unemployment” at 16.8 percent based on data from the Bureau of Labor Statistics. Most of us see this reality among friends and family – qualified individuals who cannot find work or who are living on a fraction of what they earned a year ago.
Sales taxes, property taxes, and business taxes have declined, reducing municipal and state budgets as the need for services – especially health care – increases. Most of the unemployed and underemployed have no health insurance because they can’t pay premiums from their limited incomes.
No expert believes the job loss trend will stop for another year. Simultaneously, there’s a rapid increase in the number of commercial buildings and prime loans on residences heading into foreclosure. Major banks, which wrote the vast majority of mortgages that will default, will continue to withhold credit from small business and consumer borrowers they would have welcomed when their foreclosure rates were low. No matter how we slice and dice this, the economy looks ugly.
Knowing I’m sounding like a nattering nabob of negativism in the face of all these personal and societal economic pressures, let me assure you that an entrepreneurial bright spot beckons and begs for consideration. We live in a country with deep-seated independent roots. As we’ve transformed through the agrarian age to the industrial age into the information age, we may have forgotten concepts of Self Reliance, thoroughly examined by Emerson. Our social structures make it easy for Americans to start businesses, to live independently, to achieve personal goals.
There is a growing belief that a large percentage of unemployed workers will not experience corporate re-hires in the foreseeable future. The result: A new wave of entrepreneurs will emerge. With the Internet and a good idea, you know you can start a business tonight with a world market, right from your kitchen table.
From the mid-1940s through the mid-1950s, there was a post World War II boom of newly created businesses. Then the start-up rate remained fairly constant until the late-1970s, when a growth trajectory began. New business starts hit a peak in 2000 and have declined since.
The ubiquity of the Internet opens opportunities for many, who dream of owning their own businesses. You have access to information, markets, manufacturers, merchandise, and services that didn’t exist or would have been far more difficult and time-consuming to locate before you could find them online in a few seconds rather than after days or weeks of research. Depending on your talents, ideas, passion, work ethic, and commitment, this new era of entrepreneurial enterprises could be the moment you’ve been waiting to meet.
Next week, I’ll explore key questions to ask yourself as you consider unleashing your inner entrepreneur.