Small Business Economy

Recently I heard a speaker refer to our current economic situation in the United States as an entrepreneurial economy. Trying to summarize his comments is difficult, but it included that most people will not find a single job which allows them to support themselves and their families. He suggested that instead, we should all be spending our free time, doing something on the side which could make us additional money. He asserted that the day is likely coming when the side job will be the only job opportunity we have.

This speaker was attempting to be helpful, and I know that the American dream is best achieved by hard work and original ideas. But I also know that the majority of new businesses fail before ever turning a profit. So while this approach might make a few people succeed in big ways, it is not going to stabilize the US economy as a whole.

The average person doesn’t have a marketable product, nor the expertise to run a business. This fact, causes many people to consider canned opportunities, such as franchises or multi-level marketing. These two types of side jobs often turn out to be predatory and opportunistic, so except for those who have done extensive and careful research, most people will lose money instead of gain.

But even if the majority of people could find success in these side jobs, what would the economy look like? Essentially we would have a preponderance of small businesses, capable of only producing small products. Anything which takes a larger manufacturing process to produce would have to come to us from other countries. The American economy was made strong by being the producer of these goods, and we will not find that same strength in small businesses.

Stabilizing the economy, even in the modern age, I believe will involve bringing some manufacturing and large employers back to the United States. So we need to stop demonizing large employers and make it practical to manufacture in this country once again.

Advertisement

Cyber Monday

Congratulations! You have survived Black Friday, Small Business Saturday, and most of Cyber Monday. This year I even heard one news station, refer to Thanksgiving afternoon and evening as Gray Thursday. All of this day naming stems from our desire to see economic recovery. We can expect that in the next few days people will be looking at the sales numbers, and thereby deciding whether our economy has gotten healthier.

While I agree the sales figures reflect the confidence of consumers, I don’t believe this is the best way to analyze our economy. Spending is not necessarily good economically speaking. The economy grows when some product is designed, manufactured, and marketed at a profit. If only one of the steps is done in the United States, then purchasing it on Black Friday is not a boost to the economy.

On Friday, I went shopping. At the checkout line, the cashier mentioned the crowd was smaller than she expected, at both her jobs. She has two different jobs, at two different department stores. Both are part time. Neither provide her with benefits. Both jobs pay barely above minimum-wage. She is a child of our economic age; selling goods produced in other countries, getting her benefits from the government, and having no prospects for a career.

We don’t produce goods in this country because it’s too expensive. Manufacturers have laws requiring they provide livable wages and benefits. Consumers will buy goods manufactured in other countries not thus constrained. So the economy should not just be measured by spending but rather by spending balanced with production. I don’t think I’m smart enough to know how to bring manufacturing back to our country. But I don’t think I’m gullible enough to believe we can heal our economy without it.