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.
What happens in tough times such as now, where everyone tightens their belts? Businesses make less money and are usually forced to reduce their workforce, sending waves of people into unemployment. But at the same time, they also take a good look at their business practices to see where they can save money and be more efficient. As a result, a leaner business is more productive and offers its production to its customers at a lower cost. And it so happens that in such an environment, customers are more attracted than ever to low prices.
Rising unemployment also breeds competition among employees, which is something that is rarely thought about when the concept of competition is mentioned. High unemployment rates makes people more aware that they have to perform to keep their jobs, and they tend to be more productive. If there have been layoffs, a reduced staff ends up doing the same amount of work; if there have been no layoffs, the same staff does more work. Finally, depending on the company, workers agree to pay freezes or even pay cuts to keep their jobs, which helps companies' bottom lines.
Given the constant coverage that is bestowed upon the current unemployment rate in the country, you might think that ours is higher that that of other countries of comparable economic stature. Not so! In several of the most developed European Union countries, the unemployment rate has been at or around 8% for many years. The United States probably has come to a point where as a country it must realize that the past ultra-low unemployment rate (known as full employment) was exceptional and move on to less glamorous statistics.
As a final point, I'd like to ask a question. Why is Michigan the hardest hit state in terms of unemployment rates (10%) while Wyoming enjoys the lowest unemployment rate in the country (3%)? The answer lies in the fundamental difference in how income is derived in those two states. Michigan is a manufacturing state, and most of the jobs come from factories and related businesses. Wyoming is a farming state. The farmers there are mostly self-employed and don't rely on someone else to give them a job. So maybe we should draw from that line of thinking and realize that no one is going to hand us our personal bailouts. Self-employment might just be the ticket, though.
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.
What happens in tough times such as now, where everyone tightens their belts? Businesses make less money and are usually forced to reduce their workforce, sending waves of people into unemployment. But at the same time, they also take a good look at their business practices to see where they can save money and be more efficient. As a result, a leaner business is more productive and offers its production to its customers at a lower cost. And it so happens that in such an environment, customers are more attracted than ever to low prices.
Rising unemployment also breeds competition among employees, which is something that is rarely thought about when the concept of competition is mentioned. High unemployment rates makes people more aware that they have to perform to keep their jobs, and they tend to be more productive. If there have been layoffs, a reduced staff ends up doing the same amount of work; if there have been no layoffs, the same staff does more work. Finally, depending on the company, workers agree to pay freezes or even pay cuts to keep their jobs, which helps companies' bottom lines.
Given the constant coverage that is bestowed upon the current unemployment rate in the country, you might think that ours is higher that that of other countries of comparable economic stature. Not so! In several of the most developed European Union countries, the unemployment rate has been at or around 8% for many years. The United States probably has come to a point where as a country it must realize that the past ultra-low unemployment rate (known as full employment) was exceptional and move on to less glamorous statistics.
As a final point, I'd like to ask a question. Why is Michigan the hardest hit state in terms of unemployment rates (10%) while Wyoming enjoys the lowest unemployment rate in the country (3%)? The answer lies in the fundamental difference in how income is derived in those two states. Michigan is a manufacturing state, and most of the jobs come from factories and related businesses. Wyoming is a farming state. The farmers there are mostly self-employed and don't rely on someone else to give them a job. So maybe we should draw from that line of thinking and realize that no one is going to hand us our personal bailouts. Self-employment might just be the ticket, though.
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 applying for unemployment by visiting my personal finance site.
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