It seems that every other week the media gets a fresh round of bad news to share with us, related to the current recession and its impact on the unemployment rate (which climbed to more than 7%). This morning I was reading that since the start of the recession the number of unemployed people has grown by 3.6 million, and the unemployment rate has risen by 2.3 percentage points. While this is hardly good news, it should at the very least get us to think about the way our lives have been when it comes to how we earn a living.
I remember reading somewhere on the Net that the current wave of frugality is, in a way, hurting the economy because people are spending way less than they used to. This, in turn, causes businesses to make less money and lay off people. This way of seeing things only looks at part of the picture. While laying people off is one of the first cost-reducing measures, business also look at their operating habits to spot where they can reduces costs and/or be more productive. Being more productive means they will be able to offer their goods and services at lower prices because they're being more competitive. And lower prices are just what their customers will be looking for.
We always tend to look at competition from the point of view of businesses reaching out for customers and each of them saying that their offering is the best. It's time to start considering competition within the labor force too. When unemployment rises, it forces each worker to be on their best behavior so as not to lose their job. They become more productive and the businesses can do just as much with less employees, or more with the same number of employees. And wages either get frozen or decrease, making businesses even more productive.
When we hear the constant complaining about the unemployment rate here in the US, we might be tempted to think that our performance puts us as the worst performers of the developed countries. Yet a quick look around the world tells us that such is not the case. Actually, in the European Union, where many of the countries are also wealthy and belong to the group of the world's wealthiest nations, several countries have have rates that hovered around 8% for many years now, and sometimes even higher. This, and a look at economic history, suggests that our recent run at full employment (one of the definitions of which is unemployment below 5%) has come to en end and it's unreasonable to expect sustaining it over decades.
All this is merely a prelude to my main point, which is the following. While the country's average unemployment rate is 7.2%, Michigan has the highest rate at a little over 10%, and Wyoming has the lowest rate, at a little over 3%. Why the difference? Michigan's source of employment is primarily manufacturing and big factories. Wyoming is mostly a state of self-employed dairy farmers. The solution to our current economic crisis will probably come through the realization that self-employment is something we should get back into our collective minds as a viable option.
The most serious financial crisis in 75 years requires us to go back to our roots. As recently as a century or 2 ago, most people were self-employed. We might not have to get back to that point, but everyone should have their personal business, whether or not they derive a full-time income out of it. Wyoming's unemployment performance is made possible by the fact that it's hard to lose your job when you're the boss. Look into your talents and abilities to see if there's a potential money-maker, take advantage of a global economy and the power of the Internet to launch your very own personal venture. It's probably the best time to do that.
I remember reading somewhere on the Net that the current wave of frugality is, in a way, hurting the economy because people are spending way less than they used to. This, in turn, causes businesses to make less money and lay off people. This way of seeing things only looks at part of the picture. While laying people off is one of the first cost-reducing measures, business also look at their operating habits to spot where they can reduces costs and/or be more productive. Being more productive means they will be able to offer their goods and services at lower prices because they're being more competitive. And lower prices are just what their customers will be looking for.
We always tend to look at competition from the point of view of businesses reaching out for customers and each of them saying that their offering is the best. It's time to start considering competition within the labor force too. When unemployment rises, it forces each worker to be on their best behavior so as not to lose their job. They become more productive and the businesses can do just as much with less employees, or more with the same number of employees. And wages either get frozen or decrease, making businesses even more productive.
When we hear the constant complaining about the unemployment rate here in the US, we might be tempted to think that our performance puts us as the worst performers of the developed countries. Yet a quick look around the world tells us that such is not the case. Actually, in the European Union, where many of the countries are also wealthy and belong to the group of the world's wealthiest nations, several countries have have rates that hovered around 8% for many years now, and sometimes even higher. This, and a look at economic history, suggests that our recent run at full employment (one of the definitions of which is unemployment below 5%) has come to en end and it's unreasonable to expect sustaining it over decades.
All this is merely a prelude to my main point, which is the following. While the country's average unemployment rate is 7.2%, Michigan has the highest rate at a little over 10%, and Wyoming has the lowest rate, at a little over 3%. Why the difference? Michigan's source of employment is primarily manufacturing and big factories. Wyoming is mostly a state of self-employed dairy farmers. The solution to our current economic crisis will probably come through the realization that self-employment is something we should get back into our collective minds as a viable option.
The most serious financial crisis in 75 years requires us to go back to our roots. As recently as a century or 2 ago, most people were self-employed. We might not have to get back to that point, but everyone should have their personal business, whether or not they derive a full-time income out of it. Wyoming's unemployment performance is made possible by the fact that it's hard to lose your job when you're the boss. Look into your talents and abilities to see if there's a potential money-maker, take advantage of a global economy and the power of the Internet to launch your very own personal venture. It's probably the best time to do that.
About the Author:
Before embarking on your self-employment journey, make sure you read up on filing for unemployment by visiting my financial blog.
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