The latest jobs report came out on Friday. Overall, another 95,000 jobs were lost in September. Maybe they should start calling it the no-jobs report. Ezra Klein crunches the numbers to explain why the addition of 64,000 private sector jobs is pitifully inadequate:
That's about 35,000 less than the 100,000 or so jobs needed to keep up with population growth. It's about 180,000 less than the number of jobs needed to get back to 5 percent unemployment in the next 10 years. It's about 257,000 less than the 320,000 jobs needed to get back to 5 percent unemployment in five years.
In other words, the economy is not bouncing back any time soon. Even worse, it's clear that Washington is not up to the task of creating the conditions for the job growth the country so desperately needs. And as we find ourselves in the silliest stretch of the electoral silly season, it doesn't inspire confidence that the government that emerges on November 2nd will do any better.
A deep-seated cynicism is not an unreasonable response. But I'm pleased to report that hundreds of thousands of Americans across the country are choosing to react by taking action. As a result, a parallel economy is being created by people who, finding there are no jobs, have decided to create their own.
Of course, this burgeoning parallel economy doesn't mean the government is off the hook. But while millions of Americans are waiting for the government to do the right thing in terms of bold infrastructure spending, a payroll tax holiday, etc, etc, many have decided to stop waiting.
Through the creative use of technology, social media, and a focus on community, this new wave of small businesses is making its mark in a true convergence of left and right. At the moment, our government may be can't-do, but more and more of our citizens are solidly can-do -- and irrepressibly American.
To turn a spotlight on this nascent movement and encourage its continued growth, HuffPost is launching Small Business America, a new blog sponsored by FedEx where entrepreneurs can exchange ideas, get advice, and keep up with the latest small business news. Small Business America's contributors will run the gamut from CEOs to mom-and-pop business owners to policy-makers, business writers, professors, and social media experts.
Some of those we'll be featuring in our first week include:
Small Business America will also feature the first-person accounts of people who have already jumped in and started their own business -- as well as those thinking of taking the leap.
One of those forced by circumstances into creating her own business is Brenda Carter, whose story is featured in Third World America. A grandmother living in Marietta, Georgia, Carter had worked as a manager of information systems at the same company for thirteen years. Then, in 2007, she was suddenly laid off. "Imagine getting up every day for 13 years and suddenly that part of your life just ceased," she wrote. "I cried and cried and cried. I just could not believe it."
She didn't know what she was going to do, but then had an idea. Her mother, to help pay the bills as a single mother in New Orleans, had sold pralines door-to-door. "People would knock on our doors at all times of night asking to purchase these pralines," she said. "So as I was sitting at home I thought 'Hey I can do this too! This is something I can do and am comfortable doing.'"
And now she's the proud operator of a growing praline operation -- except instead of selling door-to-door, she's doing it computer-to-computer. Her online store can be found here. "Times are changing and so must we," Carter says. "We need to be supporters of ourselves, otherwise we will not survive."
Americans have a lot of passion and ingenuity, and there is a clear market in helping bring them to market. Enter Etsy.com and Cafe Press, which have now grown large enough to have a multiplier effect rippling across the country.
Etsy was founded in 2005 by Robert Kalin. Then 25, he was an aspiring furniture designer feeling frustrated by his attempts to sell his work online. So he created a streamlined platform for handmade goods of all kinds, and launched it from his apartment.
The site's mission? "To enable people to make a living making things, and to reconnect makers with buyers. Our vision is to build a new economy and present a better choice." Which is exactly what Etsy.com is doing. And along with creating jobs, this new economy is creating connections, and caring, and community. As Kalin said in a 2009 interview:
One of the most important things anyone can do right now is create jobs. What's important is to empower people to make a living, and I support renting and running a 9,000-square-foot workspace in Red Hook, Brooklyn, that provides other small businesses with affordable studio space. And we have big community dinners there once a week for networking and sharing our ideas.
Etsy's effect is being felt far beyond Brooklyn. Colleen Fields, 54, lives in a remote town in the mountains of North Carolina. Two years ago, she was laid off from her job as a newspaper subscriptions manager. "I must have sent out a thousand or more resumés and applications," she told The Huffington Post. "I applied for a job at a convenience store, and they said they had over 200 applicants. It's just crazy. There are no jobs around this area."
A friend suggested she look into Etsy. Not exactly computer literate, she nevertheless gave it a try. In December 2009 she opened her online store, Gemstones and Wire, selling necklaces, earrings and handmade clay vases. She wrote about how some women pay all their family bills with small businesses started through Etsy. "I'm just not one of them yet. I would love to be one of them," she added.
Several other successful sites have followed in Etsy's footsteps. Among them is Bonanza, which, with its "friendliest social community online," aims to put the human element back into e-commerce, "making people relevant again."
Then there is ArtFire, which started two years ago in Tucson, Arizona. It provides a platform for "handmade goods, fine art, vintage, designed items, supplies and media," and aims to "celebrate the unique individuality of artists and crafters around the globe."
Cafe Press was started in 1999. Based in San Mateo, California, the company provides on-demand printing for mugs, t-shirts and products designed by users, "uniting and rewarding self-expression." It now gets 11 million unique visits a month and, with its 6.5 million users, adds around 2,000 new, independent shops and 45,000 new products every day.
Another great example of making a business out of helping people make a business is Recession Wire. Begun in February 2009 by Sara Clemence and Laura Rich, who were laid off when Portfolio magazine folded, and partner Lynn Parramore, the site aims to "chronicle the 'upside of the downturn' through personal stories, helpful advice and reportage on the changes underway in these hard times."
In its small business section, the site features articles like: "How to Bootstrap Your New Business Wisely," "Don't Close Your Business, Change It," and "A Cool, Free Way to Figure Out a Business Idea's Potential."
At Inc.com, the website of Inc. Magazine, the editors aim to provide "advice, tools, and services, to help business owners and CEOs start, run, and grow their businesses more successfully." Its start-up section includes advice on writing a business plan, running a home-based business, naming a business, how to incorporate, and financing.
StartupNation bills itself as a "free service founded by entrepreneurs for entrepreneurs." Headed by Jeff and Rich Sloan, two experienced entrepreneurs, who started the site to share their "years of in-the-trenches experience," the site features blogs, forums, advice, and networking tools.
Micro-financing, another entrepreneurship model greatly enhanced by the web, has been around for awhile. But the founders of InVenture Fund wanted to take the model to the next step. It was launched in October 2009 because, as the site says, "traditional microfinance models weren't doing enough to lift communities out of poverty." The problem was that the 75 million or so borrowers around the world were locked into loans they had to repay, sometimes at interest rates of 30 percent. InVenture finds microloan recipients who have good track records and gives them the financing to expand, with no fixed repayment schedule. "Give entrepreneurs an opportunity for real financial and social growth," the site says, "and they'll lift not just themselves but their communities out of poverty." A portion of the site's profits is then invested in responsible community programs, like clean water and education.
Indeed, one of the hallmarks of this entrepreneurial movement is community -- including an emphasis on local food, local agriculture, and sustainable business practices. One of the ironies of this new wave of small businesses is how the global reach of the web has been so pivotal in connecting people to their own communities.
Judy Wicks, the owner of the famed White Dog Cafe in Philadelphia, founded the Business Alliance for Local Living Economies (BALLE), which now has 80 local chapters in the U.S. and Canada. To spread the local food gospel of the White Dog, Wicks also founded Fair Food, which connects local family farms with city dwellers.
In Lexington, Kentucky, Fresh Stop is an attempt to bring the benefits of community-supported agriculture to those who couldn't normally afford it. Forming partnerships with churches, Fresh Stop asks those who can afford it to pay a bit more for what they buy, which subsidizes those for whom the fresh -- and healthy -- food would otherwise be out of reach.
Whether you're directly involved in a small business or not, I hope you'll check out Small Business America. After all, we're all affected by the well-being of the communities we live in. At least for the time being, real solutions are less likely to come from politicians than from the thousands of people in thousands of communities taking the initiative to connect, share, and create.
I love how human this movement is. It's fueled by technology, but at its core is a real person connecting to another real person. As Twitter founder Biz Stone said of his company: "Twitter is not a triumph of tech. It's a triumph of humanity."
Technology is what will allow this very American movement to scale up and begin to have a real impact. But it's in our backyards and basements that it begins. "To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections," wrote Edmund Burke. "It is the first link in the series by which we proceed towards a love to our country, and to mankind."
Click here to check out Small Business America... and let us know what you think.
Follow Arianna Huffington on Twitter: www.twitter.com/ariannahuff
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Yes, starting a small business is risky and intimidating. But, learning from others who have done it and either succeeded or failed can greatly lower your risk. Also, getting over the American idea of "silver bullet success" will also lower your risk and increase your chances of succeeding!
I've coached plenty of small business owners and startups who succeeded because they learned from others. Now, I am hoping to encourage even more small businesses with my new advice community at http://www.SmallBusinessDivas.com..
Kudos to the Huff Post for joining the small business advocacy community.
I bet some of the trolls are going to call this idea "socialist" somehow. That would complete their conversion to full on "Four legs good, two legs better" doublethink.
However:
Most of my friends own a small biz, can do, kind of folks but every single one has had a huge failure rate before finding a business that gives them a small income. The rewards for the majority are pitiful and require 15 hour days. They are often sick from stress, unable to take a day off because there is no one else to run the restaurant or design studio...they could only get work by charging Third World Prices.
AND If you have a young family be prepared to never see them grow up. It's a tough world. This section must highlight the reality the bad and good. People who become successful generally have little concept what it is like to fail and fail again. Their opinions are not useful. They never think luck or Class helps. They rarely acknowledge a famous parent or rich uncle. Never mention the private schooling.
And frankly an America full of small businesses selling "Fart" Apps or T-Shirts will not be viable. My cousin sell nodding dogs and New Age bumper stickers. He cannot afford health care and is in he'll.
We learn from mistakes. If all we get are the super famous we will learn nothing. For every Pandora Radio there are hundreds of thousands of start ups being thrown out of their studio apartments.
Gone are the epic cuts announced in 2008 and 2009, when Citigroup (C), General Motors, Berkshire Hathaway (BRK.A) and Starbucks (SBUX) each cut tens of thousands of jobs.
Further, as U.S. News & World Report points out, every major employment sector is hiring, according to a sampling by job search engine Indeed.com. In the 12 industries Indeed.com monitors, hiring rose significantly in August compared to a year ago. The biggest surge was in transportation, where job postings jumped 119%, but information technology, manufacturing and media and newspapers also saw strong gains, up at least 61% above year-ago levels
Reagan ushered in an era in which a small minority grew vastly rich, while working families saw only meager gains. He also broke with longstanding rules of fiscal prudence.
I have friends that I would like to employ, yet my health insurance plan is so high for my company of 2(myself and my husband www.dwryan.com) that even if we could afford to take on help, they would have to pay for their own benefits.
This is something that I want to see being worked on for the small business owner.
When the gov't takes money from the rich and then redistributes it, the incentive then is to NOT show profits and stash the money. The simple solution is to make it so enticing for the rich to invest their money in tech innovation. Taxing them more is just plain dumb unless you want to just take their fortunes and give the money to more deserving people like the poor and middle class. Give the rich an incentive to invest - don't tax them more. Or give them a choice - either pay higher taxes or invest your money. That way, the government stays out of the business of dolling out money and businesses can get to innovating and creating jobs.
A world central banking system that is based on need and production not greed and consumption.
After all, we are the altruistic species.
For instance, only about half of small businesses last over five years. And this is using the SBA's rather expansive definition of "small business" as 500 employees or less! How many businesses on small town mainstreets employ more than a handfull of people? What is their failure rate?
What kind of wages and benefits are offered by small businesses? The typical small business is often family-oriented, non-union, and can usually only offer low-paying, low-security jobs, not careers. What is the per-capita earning in small-business America? What is their true hiring rate?
We must go beyond anecdotes and special cases to answer these questions Only a start (but a good one) would be the SBA FAQ sheet itself at http://www.sba.gov/advo/stats/sbfaq.pdf . Will anyone really look further into this, or are we to be satisfied with myths and illusions?
Just blandly saying hard work is not an answer. You know many a biz that fails because they did not have enough seed money to see them through the first year or two. My friends work very hard but they are without wealthy parents or kindly bank managers or collateral. They work hard, very hard. If hard work made one rich, most Americans would be wealthy.
I am very happy for you and your staff and wish you and your family a prosperous future.
It was five long years before I took a 3 day vacation.. worked 7 days a week, 15-18 hours a day.
Today, I employ 67 full-time employees and spend at least 2 days a week golfing.
The latter has been abandoned by this Administration.
The SBA leaves it to the banks to evaluate individual businesses on their merits. That's not a bad system, but now the banks are facing suits from the 50 states because of their fraud so they are not going to be lending to anyone who presents any risk in the foreseeable future. So in other words, no business is viable unless it has foot traffic. Convenience stores, dry cleaners, gas stations. That's the first kind of small business I mention. That's where the new funding is going. So that's where job creation is going to occur. Minimum wage jobs.
In the Federal procurement arena the way that contracts are parsed to "small business" is a huge joke. It is mired in corruption and set asides are often steered to big business.
"Mafdet" is right to differentiate small business types and success rates. We also must account for more successful small businesses acquired by larger entities. Not necessarily bad, but it does skew the discussion.
Small business depends upon, but does not mainly create, a successful and prosperous economic climate. A business must perceive need for its goods or services. If no market, then no need. If one is imagined ("let's build a baseball field and they will come"), the result can be glut and failure. Entrepreneurs often fall in love with their own illusions. The wrong projection wastes money and time, and spreads demoralization when most needed.
What could make a difference? We have many small businesses already, some quite successful, but even the best look over their shoulder.
I think we need massive infrastructure projects (as in the 30s) which the administration is only now belatedly discussing, to spark the US economy. Viewed as social investment through public enterprise, rather than the "tax and spend" frame popular among both major parties. The side effects will create vast opportunities for small and large businesses to prosper again.
The Government has never been responsible for creating jobs. Business is responsible for creating jobs and the ability for the individual to compete in the work place creates jobs. However the individual has no chance in competing with Mega size outlet store. Governments minimum role should be in making sure that the game is played fair and square with adequate regulation and safety rules.
Manufacturing? has all been outsourced to other cheaper labor countries due to the Corporations "bottom line" duty to stock holders. I would have to say that corporations are more responsible for our poor economy than the government. And when corporations are MAKING MONEY an NOT HIRING that is a political tool played against the office holder and WE THE PEOPLE are getting played by the corporations.
The overall environment in America for small business is not very friendly, to say the least. People like Bill Gates, Steve Jobs, and the founders of Google are the rare exceptions to this, but the majority of American small businesses just don't get much of a chance and fail. And let's not forget, anymore, banks aren't lending to help small start-up businesses either.
I have bought orchids on the internet from people that grow them in their apts in SF. Thats innovation that works. In fact there was a minor boom economy in orchids because of the internet. I would have no other way to contact a grower.
On the subject of growing I go to a green market and the people there are doing great business -- they grow things outside the city and haul them in themselves. Organic lettuces go for 3.00, do you know how low the overhead is for growing lettuce?
I recently got to visit a co-op kitchen. People rent a space to create and package foods from cereal and salad dressings to wedding cakes, and they are all some busy people. What is most amazing is how busy the owners are -- most are 1 person operations.
Think outside the box.