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The Decline Of Small Business = Decline Of Basic Skills
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
An economy where most people work for the state or a global corporation is an economy that has lost its knowledge of the key entrepreneurial building blocks.
The decline of small business has numerous long-term consequences. One is the decline of the middle class, as entrepreneurial enterprise is a key pathway to generational wealth-building and prosperity.
Another is the loss of employment opportunities. As U.S. businesses are being destroyed faster than they’re being created, there are fewer sources of employment.
Since many people get their first job at small businesses, the decline of small business has an outsized effect on entry-level employment opportunities.
Correspondent Kevin K. identified a third long-term consequence: the erosion of opportunities to learn basic skills with economic value. As low-skill work is increasingly replaced by software and robotics, work with a future requires not just higher-level skills but a spectrum of building-block skills and values--what I call the eight essential skills of professionalism in my book Get a Job, Build a Real Career and Defy a Bewildering Economy.
Many of these skills are fundamental life-skills that are not taught in classrooms; they are learned on the job. If the kind of jobs that enable the learning of these basic building blocks of economic value go away, so do the opportunities to gain these skills.
Here is Kevin's commentary:
In The Decline of Small Business and the Middle Class, you wrote:
It is not coincidental that the middle class and small business are both in decline. Entrepreneurial enterprise and small business have long been stepping stones to middle class incomes and generational wealth, i.e. wealth that is passed down to future generations rather than consumed.
For me the big take-away is that as fewer people in America work for small business owners who often share with employees what they did to create "middle class incomes and generational wealth", we will have fewer people who know how to do this (or even imagine it is possible).
My first "real" (as defined by a job paid for by a non-family member) was pulling weeds for a neighbor (at $0.60/hour a.k.a. "a penny a minute"). I later made $1/hour when I started mowing his lawn then $2/hour until I had to stop at 14 when I started working all day every Saturday at the grocery store making $3/hour.
Unlike today where most gardening jobs have a guy that does not speak English working for a guy that speaks a little English, I was working for a contractor that owned his own business and a home and was into cars (my Dad knew nothing about cars).
He came over and gave us some pointers on turning a corner of our basement into a new room for me (and let us his hammer drill to make holes for the Red Heads to hold the wood to the floor). When I turned 16 he accompanied me a couple times to look at used cars (and saved me from buying a car with major rust/rot).
Working in the little grocery store (owned by two butchers born in Italy), I not only learned about the retail grocery and meat business but how to patch a leaking flat roof with Henry wet patch and how to maintain HVAC systems and commercial refrigeration systems. Today in a WalMart grocery store you typically have a kid working for minimum wage doing what his "manager" (that was probably making minimum wage a year ago) doing what the latest corporate memo told them to do.
When I spent a winter in Lake Tahoe getting vacation homes ready for renters, I not only learned a lot about the rental market and the real estate market, I also learned how to do low-cost home maintenance from owners that have been doing it for years and got to work side by side with them. Kids today working for a giant corporation don't have that opportunity and as a result don't learn nearly as much.
Thank you, Kevin, for describing the process of learning entrepreneurial life-skills. In a neofeudal economy dominated by the government-corporate partnership, the erosion of small business goes hand in hand with an erosion of building-block skills, opportunities to learn these essential life-skills, and the cultural knowledge of how to start and operate an independent enterprise.
An economy where most people work for the state or a global corporation is an economy that has lost its knowledge of the key entrepreneurial building blocks and its opportunities for independence from the neocolonial Company Store: Is Small Business a Threat to the Status Quo?)
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Deja Vu?
Green Shoots?
More like the result of so much red tape that to hire one you really need two so that one of them can do all of the paperwork.
Apologies for going off topic, but I have a quick technical question.
The comments all used to show up on a single page, now it shows about 20-25 comments on a page and there are multiple pages. Can I adjust this setting or something?
Thanks.
At the top of the comments you can change how many messages show up, and there is a "Save Settings" button to store your preference.
Oh shit, i didn't even see that. Thanks for pointing that out, I was looking in the profile.
Car taxes just went up 50% around here, they just added it to the school bill, prolly administrative pay increases.
What is the most ironic is that the birth death model that the BLS uses is partly a "guesstimate" of how many jobs are created by small businesses. Last month, the birth death model added 234,000 jobs to the real number and one would assume that a large portion of this adjustment was to reflect the number of jobs supposedly created by small businesses. And now we are seing that small businesses are declining in number...
Again, another part of the intentional transformation to government dependence.
Boy, it's a good time to be a fixer.
I agree 100 %. I have a super hard time finding good mechanical plumbers. But I see no shortage of financial plumbers clogging up the lifelines of everybody else.
I told my girlfriend (Quantitative Analyst) with a deadpan look on my face, that after my economics education comes to an end I want to find work on a farm, or be a carpenter..
You should have seen her expression.
http://www.farmersdatingsite.com/?s=free_db_search&aff_id=Jacksonm&aff_tr=1&aff_pg=2
My cousin married a farmer, and I have other relatives who are farmers.
I was visiting Mother's Day weekend, and she had to drag us way out in the woods....a good 5 miles off the nearest paved road and a good mile down a barely drivable trail, to show us her new log 'cabin' on their manmade, oversized private pond. She just wanted a little place to get away to.
When her husband came by, we started talking about farming in general, and he had just bought a second p-nut combine for $50K. He has over $1Million in just farm machinery. Bankers in BMWs & silk suits do not impress this good old boy. They have a great lifestyle filled with real friends, family, and community. We should all be so fortunate.
Left my trading desk some decades ago for the mountains of Montana and haven't looked back - currently just a small-time grower and seller of Painted Mountain Corn Seed.
If you poke around in the website and read the essays though, you will discover that there is more than seed corn on our plate.
http://rockymountaincorn.com/
You are doing valuable work. Good on 'ya, brother.
I am rural, too. Not too far from a big airport, and not farming, but I run my business from my home, and I'm invisible from the road, except for the mail box and the opening to my gravel driveway. Smaller towns and open spaces since I left the city 25 years ago.
Farming can be a grand lifestyle, particularly if you have a quota for one of those indispenable, "special" crops.
I had a friend who grew tobacco in North Carolina... it was a license to print money. Well, almost.
He never a bad year, just like the yeoman pioneers who carved America out of a heathen wilderness. Is this a great country or what?
Yeah. I've studied chemistry too, a little biochemistry and have worked for a couple of years in environmental engineering. With some start-up capital I could make a seriously impressive, 95% self-sufficient farm.
Start-up capital is the problem. So I'll probably end up consulting, or at a trading desk with my fingers crossed that the house of cards tumbles in 3-4 decades, rather than next month. To get to a point where I could be self-sustainable in life's basic necessities would be awesome.
11b40 - Love this. Arable farmland my friends. Arable farmland. And paid off apartment complexes for the sheeple to crowd into with produce stands.
There's only one under 30 around here the rest are 48 and older
It's not the plumbers fault - its the toxic, glutenous shit the bankers keep flushing down their high-rise toilets into our lives that's gumming up the pipes.
Rise of infomercials = Rise of book sales by middling authors = Rise in happiness of said sadsacks.
US business/economy/consumer remains irrelevant to aforementioned paradigm.
Thanks for clicking on the Amazon link and consuming more mindless drivel. You have fulfilled your purpose. Be happy. And remember, Chuckie loves you, and labours tirelessly only for your happiness
Anyone notice that when the small business cycle failed to follow its normal course is when teh last big minimum wage hike went into effect?
Would be nice if the data went further till at least 2013
^this. The chart is worthless if it redacts 2010-2014. How the hell are we supposed to know whether the trend is continued?
Sorry, you're just going to have to wait until the next "A Report to the President" is requested.
Silly serfs.
Did you notice that the last time the minimum wage started to increase (the first of three scheduled increases) we went from peak employment to shedding jobs?
Entrepreneurial ventures are the very best way to learn. And not just busines ventures. I learned a lot more growing up from trying to build a tree fort or make a go-kart out of roller-skates and particle board than I learned in school.
Academia teaches kids how to repeat, not to think and problem-solve.
Some will say that this is a technology generation not a manufacturing generation. The sad thing is that the kids coming up usually aren't even good at computer skills unless you consider facebook or texting a computer skill.
Academia teaches kids how to repeat, not to think and problem-solve.
Most degrees given out in the Social Sciences or Arts/Humanities compose of nothing more than idealogical opinions intended to brain wash. When these students oftne start off in STEM degrees it turns out they will have to actually work to earn their degrees. No way are they going to work and struggle. They then go back to the libtard indoctrination and become basically, stupid.
Fat kids don't learn that now when someone is driving them to and from school where the conditioning begins. Then they're driven to soft, everyone's a winner, non contact sports, and back home. Then maybe they ride a bike with a helmet or go to play in a friends house. Then they come home and watch some brain wash TV with more commercials then content. But mommy and daddy, usually not married, get to feel better because they will buy them a bunch of shit.
The other alternative is kids who maybe go to school for conditioning and free food. Then they fight their way through drug infested streets and maybe go to an empty home, paid for by hand outs. There they watch brain wash TV with more commercials than content. Later that evening the other BS comes on TV that gives them a little porn and teaches them that morals and hard work are for dummies, accompanied by more commercials than content.
Throw in a tablet before they can walk, the internet and illiteracy and you have a kids life in the 21st century.
"and teaches them that morals and hard work are for dummies"
Unfortunatly that seems to be true these days.
Having moral won't help you in business and will certainly not help you get girls too.
"Academia teaches kids how to repeat, not to think and problem-solve."
It's even worse than that. Public education is designed to teach submission, plain and simple. It's not so much 'repeat and remember' as 'do what I say, right now, regardless of what I've said in the past.' It's disgusting.
Witness Common Core. If a child gets the right answer on a math problem, but didn't arrive there the 'proper' way, the answer is wrong. Heaven forbid a child have an original thought or discover an easier method. That needs to be squashed/detention'd out of them as quickly as possible.
Someday - soon I hope - some kid somewhere is going to file a class action lawsuit against their school district for taxing their parents for schools without providing a legitimate education in return, thus depriving them of the opportunity for their parents to use that money to actually educate them. Charges might include fraud, conspiracy to defraud, unlawful taking, theft by misrepresentation, malfeasance, dereliction of duty, official repression, violation of fiduciary responsibility, and perhaps some variant of taxation without representation.
I predict once one such lawsuit is filed things will go viral.
When the dollar collapses things will become small and local in a big way, and very quickly.
Like when a hayabusa hits a wall at say, 150 mph.
pods
Yes, but I'm afraid this new entrepreneurial spirit will focus mainly on looting thy neighbors for basic resources.
Its just silly to work when you can steal.
>>>Its just silly to work when you can steal.
And when things get serious, you have to lie.
God, I love situational ethics.
EMP novels illustrate the simple, yet extreme case of instant supply chain and technology collapse where the canabalism starts inside of several weeks. I expect a slower collapse with increasing corruption and rot of every kind.
You got that right pods. Which is why I'm getting more into some gunsmithing and re-loading.
And more neighbors are raising chickens and a few have hogs now.
This is why it's a good idea to join a fish & game club or other such group where skills and goods can be bartered with like minded people.
Pods et. al. I love to hang out with you guys in cyberspace..... so insightful.
I just took a consulting position with an insurance company while i am busy working my garden, chickens, solar panels and small one room business in my front room! CASH ONLY...junk silver PREFERRED!
Since many people get their first job at small businesses
so true, never thought about that one.
Eh, I plan on becoming a small-time drug dealer in one of the FEMA prison camps.
But if you include the grow-ops in Colorado, Northern California, Oregon and Washington, small business is booming.
Those aren't new businesses, just new incorporations.
We're on the train to Bangkok, aboard the Thailand Express -N. Peart
Until they go up in smoke...
My short stint in the markets of the 70's found myself sampling and consuming too much of the product to become economically viable, but I had a lot of friends.
They are just doing all the legwork and solving all the small operational problems of getting an industry established. In 3 to 5 years, Phillip Morris and RJ Reynolds will be acquiring them all, and the entrepreneurial phase will end. Big tobacco will take that over too.
Some reasons?
Hom skool.
Teach to tests, not to critical thinking. Parents are tired from 4 jobs and so have little time for homework.
Smart people make poor slaves.
Video games teach what, exactly?
Video games train the kids for war.
I thought your first job was supposed to be as a community organizer
or choom bus driver
Too many lawyers and insurance companies.
Keep someone employed; don't scan and bag your own groceries.
You'll also likely be keeping a disabled person who bags groceries employed.
We are approaching "Idiocracy" at a breakneck pace, and it came out in 2006.
Keep someone employed; don't scan and bag your own groceries.
I agree...I ALWAYS stand in line...
There hasn't been a chart update since 2009? Not that I disagree with the post, but let's not pretend like the last five years hasn't happened either.
Looks like the SBA is dragging their heels getting data out; seems to stop at 2010.
Bad publicity? http://www.sba.gov/advocacy/849/6282
Links for 2012, but data inside missing for 2010 and beyond (?).
This is what Gone Galt looks like.
Pretty soon there will only be one corporation: Taco Bell
Nah you're thinking of 'ButtFuckers'
+2505.
~Idiocracy II: Reverend Upgrayedd's Ministries
The replacement of low skill workers with software and robots should have resulted in prosperity for all and lower prices - raising up all of humanity. It did up until about the year 2000, when the central banks flooded the world with too much cheap money and drive up prices for everything - even though they don't count it.
Look at all Those Summer of Recoveries.
No it doesn't.
Where effort and productivity are punished, while sloth and dependence are subsidized, doing the minimum represents optimal economic behavior.
ATLAS IS SHRUGGING.
Hey, what do you expect when the Corporations win?
Given that the overwhelming majority of small business was related to the discretionary consumption side of the economy, it takes a fuck load of revenues to compete in razor thin margin world to make a go of things...
And it wasn't the Fed that sold out to the Corps....
Reap what you sow....
True, but the FED was quite complicit.
I'll give you that, they certainly did not try to stop it, hell Greenspan thought it would self-regulate and everyone would live happily ever after...
The Obama transformation is going along right as planned. You got to hand it to him as he's creating the dependency that will keep the left in power for decades.
can't believe you are still all "left-right" about our situation. are you new?
He's just a partisan idiot that can't even get his cause and effect straight....
http://lmgtfy.com/?q=projection
Destiny and I ponder that there's no power great enough to stop it.
It's amazing how disconnected people are from many things. I am growing some winter wheat in my garden. All my neighbors see it and stare at it in bewilderment. They always ask "what are you going to do with that?" - I am always amazed at how people don't realize that it is wheat which is turned into flour which can be turned into bread. If people are that disconnected from their food chain, how will they know any of these other skills?
In what would seem to me as a normal economic environment, the young would work at very low wages (or no wage at all) apprenticing to a trade. By increasing minimum wage laws, using the threat of child labor laws, and a wide open immigration policy, there are very few opportunities left. Further, the change up has been so rapid as to displace existing workers which puts even more stress on employment and social services, but also has not provided adequate apprenticeship for trades to be properly passed on. We instead end up with poorly skilled, low paid trade craft, which ultimately costs us all more than if we had bought what we thought we had paid for. This has been my experience in the construction/woodworking business anyway.
Anecdotal but most "hires" that come in here and look for a job are completely unemployable. Absolutely devoid of logic and critical thinking skills....and yes, this is for a blue collar job.
I've made a similar argument for years: Employers only want to hire "experience," but then off-shore / eliminate all of the experience creating jobs. And then have the audacity to complain about a "lack" of "qualified" workers.
There are many ways to obtain experience without having a job.
Years ago I worked in a hospital as a para-medical professional. There were numerous "Candy-Stripers". These were high school students who volunteered to do small menial jobs around the hospital. Delivering small items such as blood samples to the lab etc. These kids got nothing but a free meal and appreciation, but little else.
Except they learned skills AND had a reference to put on any job application when they graduated and went out into the world.
Who would you hire right out of high school?
Decline of small business = Rise of big business
And with that comes the enhanced barriers to entry, taxation, regulatory as well as offshoring of jobs.
Here come the sharks to take control, restructure, flip and or liquidate.
A portfolio company of the Carlyle Group LP is looking to raise $3 billion for what could be one of the largest direct-lending funds ever, according to people with knowledge of the matter. The fund, to be managed by Carlyle's TCW Group Inc. unit, is seeking investments from sovereign-wealth funds and other deep-pocketed investors in search of income-producing strategies, as interest rates remain at historic lows, the people said. In direct lending, investment firms lend to midsize businesses that are below the radar of traditional lenders,http://www.benzinga.com/general/education/14/05/4547571/flying-high-with-apollo-and-affiliates Apollo Investment believes, like the management team at the parent company, that there continues to be a significant illiquidity premium for direct lending to middle market companies. May 7, 2014 6:12 p.m. ET
It's become so bad people don't want to cook or cut grass. All they want to do is sit around and text or follow in the footsteps of the Kardashians.
The last seberal generations have no idea of hard times that were experienced in the Great Depression where everyone had to rely on their skills.
This also leads to the increase in wage gaps. When everyone in a town is the local butcher, barber, mechanic and own their own business, they all make about the same. And the workers are paid a wage not too dis-similar from the owner. But when you get the Walmart effect, all the workers are paid crap, and the corporate managers are paid more, thus increasing the wage gap.
PLUS ONE HUNDRED
ALSO INCREASING THE NEED FOR GATED COMMUNITIES AND OTHER SECURITY MEASURES AROUND THE FEW WHO ARE OWNERS AT THE TOP. SO COMPLETE DECIMATION OF THE 99.9 AND UNBELIEVABLE OVER THE TOP WEALTH FOR THE 0.1 .
WE ALL KNOW HOW THIS ENDS.
BULLISH FOR BOARDING SCHOOLS!!!
This is in essence identical to what I said above...
Atlas Shrugged? Was fore-told. Read the book, worth it
"Welcome to Good Burger"
"Home of the Good Burger"
"May I take your order?"
Also, I'm in Austin (read: too close to the mexican border) and EVERY time i'm paying for groceries someone in front of me pulls out their EBT card........... FREE GROCERIES FOR MEXICO!!!
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"Stop trying to control everything and just let go. Let go!"
That increase in minimum wage to $10 or $15 should be a real shot in the arm to small business. Can't wait to see how that 'helps'.
Carry that logic foward would suggest that reinstituting slavery would be great for small business...
Hint: you only have to raise the min. wage for companies with over 1000 employees (including subsiduaries).....
they removed shop class and the exposure to vocation was removed from the curriculum. social media turned green thumbs into texting thumbs.
being a small business takes all your time, but it's your time.
Too many "small business owners" have a sense of entitlement to low cost labour, and excess profits. Small business needs to pay more for its employees because it is far riskier to work for a small business than a large business, and advancement opportunities are fewer.
Try to find a kid to mow your lawn for you.
I offered the neighbor's 13 y.o. kid $20 to mow and weed whack my lawn that takes an old crippled guy 45 minutes to complete.
He couldn't be bothered @ $24/hr.
Mom just bought him a new iPhone because he threw the old one at his friend.
"I honestly don't know what to do about that boy"
I didn't have the heart to tell her because she's just that dumb. No point.
Where are you? My son is looking for more clients for his business....
In the village where I live, children are never seen mowing lawns; not even their own lawns. Adults (50+yrs old) mow the lawns for a fee. They are much more reliable, do a good job, finish the job and supply their own tools and fuel.
All-in-all a lot less trouble than couch potatoes who really don't want to be there, but who are forced to work by their parents. They want you to fire them so they can hang around with their friends doing nothing.
This is the future generation who are going to work, pay taxes and generally run the country and support us in our dotage. Some hope!
lmao, I am one of those. 56 and still mowing.
Pussies. All of them.
This fits perfectly with the Lyin' King's marxist/fascist plans. Things are going well.
For the past thirty years the vast majority of the population have been trained to not push the envelope, they have been trained not to rock the boat, they have been trained to follow the herd, they have been trained to learn for the test, they have been trained to depend on the parasitic large corporation for healthcare, wages, 401k, they have been trained to depend on government for unemployment insurance and food aid, they have been trained to not take chances, they have been trained to follow a code of silence when they see wrong doing, they have been trained to shop at the big box stores and the online giants, they have been trained to admire the money-at-all-costs wealthy and disregard and disparage the working poor, they have been trained to accept US corporate outsourcing of jobs to other countries while they call the unemployment line looking for help with job retraining.
They have been sold a bill of goods that demands they incur huge debts to go to college and then they can't afford to open a new business, or strike out on their own. Government in bed with large corporations has produced huge corporations that are in essence monopolies wielding unbridled power over competition. Big corporations can handle the regulatory burdens of a too big, big brother, but a small business can't manage all the bureaucracy and still manage a profit. Big business likes that disadvantage and big government feeds that advantage with specialized tax breaks, subsidies and favorable bidding options.
About 50% of eligible voters vote in a presidential election; forty percent or less in off-year elections. They buy the partisan nonsense that pits 50% of the country against the other 50%. 90% of incumbents are reelected, but Congress has an approval rating in the low teens. 100% of the elected are treated by corporate media as royalty. Congresscritters receive fat paychecks and sweet retirement packages, while the voters struggle with stagnant wages, rising costs and fewer opportunities.
The American people have sold a bill of goods that is spoiled and rotting. For the most part they don't have the wherewithal to open a business and fight the corporate and government bureaucratic monsters that want to control all movement of money to them and away from the worker and the hopeful entrepreneur. The system of corporate control of government - the corporatist state - thrives while the people suffer in relative silence, hoping, foolishly and without a fight, for magically better days ahead. Without a complete overhaul of the dysfunctional, corporate controlled two-party system, nothing will change but the year on the calendar.
And until that complete overhaul I recommend you begin reading and memorizing your local, state and federal regulations and learn the computer systems that help to monitor, collate and analyze said regulations. This is where many of the new jobs lie. Information.... it's what's eating your dinner! and every other good and service your old paradigm salary paid for.
Up until 8 or 10 years ago my brother in law's tool and die shop had 2 apprentice tool and die men for every tool and die maker. Not big bucks, 10 bucks an hour plus benefits. For almost 8 years no one would work for 400 a week and learn a trade that would bump them to 1000 a week after a couple years with room to advance or start your own shop. Last week while visiting them out of state he said their shop of 90 tool and die men had their first four apprentices training in 8 years. Outsourcing isn't the cause of all of manufacturing woes. Most manufacturing jobs in the machining world require strong math skills and now days computer skills. If you raise kids who learn nothing, know even less and expect everything handed to them just because they draw breath you end up with America 2014. Last one out please turn out the lights. Have a great day.
There are many ways to obtain experience without having a job.
Years ago I worked in a hospital as a para-medical professional. There were numerous "Candy-Stripers". These were high school students who volunteered to do small menial jobs around the hospital. Delivering small items such as blood samples to the lab etc. These kids got nothing but a free meal and appreciation, but little else.
Except they learned skills AND had a reference to put on any job application when they graduated and went out into the world.
Who would you hire right out of high school?