Unemployment: Curse Or Blessing In Disguise?
I was taking a break from my normal online activities this morning and decided to visit a couple news sites just to see what was going on here in the US and around the world. Well just as I expected, I came across a few headlines talking about the high unemployment rate (over 7%) and reminding us that since the recession started job losses have been large and widespread across all major industries. I will be the first one to agree that the current situation is anything but rosy. I will also be the first one to point out that we maybe need to step out of our comfort zones.
First of all, since people are losing their jobs, the first thing they will do is reduce their spending. That reduces revenue for businesses, which not only lay off people, but have to find ways to keep their costs down so they can at least turn a profit. So what happens is that companies innovate and get more competitive so they can offer goods and services at the low prices that their potential customers can afford. And this is going to be the basis for the future expansion.
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.
As much as we’re complaining about the unemployment rate here in the United States, ours is one of the lowest of the developed world. In many advanced countries of the European Union, it has been around 8% for quite some time. It’s probably time for us to come to terms with the realities of basic economics and realize that we have been enjoying full employment for some time (defined by the economic condition when everyone who wishes to work at the going wage rate for their type of labor is employed) and it might not come back any time soon, as it’s the exception rather than the norm.
Finally, my main point is this one. The United States’ current unemployment rate of 6.7 percent translates into 10.3 million people without a job. The state of Michigan is the hardest hit, with a double digit rate, because they depend heavily on the manufacturing business and the factories as their main source of employment. At the other end of the spectrum, Wyoming, with the lowest unemployment rate of only 3.2 percent because it’s a farming state. Farmers are self-employed people who work hard as a family to make a living. In order to solve our current economic crisis, we probably should turn back to self employment.
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.