You may have missed it. Among the regular jobs and economic reports that are released to the media each month was one study that ought to send shivers down the spine of every elected official and policy maker in America. I’m talking about the “Small Business Optimism Index.” This report, prepared by the National Federation of Independent Business (NFIB) Research Foundation, found that the Optimism Index collapsed in November after months at stagnant low levels.
This study bears out the disturbing trend that I have sensed as I work with small business owners across the state of Indiana. There’s a word for it. In fact, there are several words for it:
Pessimism, Malaise, Cynicism, Distrust, Apathy. I could go on, but you get the picture.
So why does this matter? It matters because statistically small businesses create the vast majority of the net new jobs. Small businesses employ half of the country’s workforce (and that takes into account the zillions that work for the government). And small business usually leads the economy out of a recession. That is, until now.
Since Small Business is truly the engine that fires the American economy by creating most new jobs…. the fact that small business owners are NOT optimistic about the future ought to scare the bajeebers out of everyone…. especially the politicians who give lip service to the importance of small business.
I think I have some perspective on this. I’ve been working with small business owners for three decades; over two decades as a small business owner myself and eight years as NFIB Indiana State Director. Small business owners….who have traditionally been the most optimistic people on the planet… are holding back or worse; throwing in the towel. These are the folks that have always been so optimistic that they max out their credit cards and mortgage their homes… risk everything… to live their dream.
Today our risk-taking, job creating entrepreneurs must contend with runaway rules, regulations and bad-for-small-business concepts that are spewing out of Washington. Their healthcare costs are out of control and it seems that every day there’s a new rule or regulation to contend with. No wonder they’re demoralized. And most disturbingly, I have heard small business owners say “If I were just starting out today, I would not do it again.”
Wow. As my children would say… OMG!!!
I believe this alarming trend is the canary in the coalmine for the US economy and ultimately, our way of life. And no, I don’t think I’m being overly dramatic.
If small businesses hold back or worse.. give up… what will happen to this great nation? Our present tepid economy demonstrates what happens when Small Business sits on the sidelines. Can you imagine what will happen if they begin to throw in the towel? Yes, Mr or Ms Small Business Owner, what you do is really important. Important, not only to you and your family but to the United States economy.
The time has come for our policy leaders to do much more than talk about the importance of small business. If we don’t act now, we may not have an economy to worry about.
Barbara Quandt Underwood
NFIB/Indiana State Director