An Economic Collapse in Self-Reliance Is Gripping America
The American Dream. A classic characteristic unique among nations, which many argue makes America the greatest nation on earth. Countless millions have suffered horrendous hardship and purposeful displacement to pursue it. It’s as much a part of the American psyche as apple pie and baseball. But one of its core pillars is disintegrating, foreshadowing potential economic collapse in its wake. That pillar is self-employment, or lack thereof, and it matters more than you think.
Why? Because the ability to establish one’s own income is paramount in achieving “Life, Liberty, and the pursuit of Happiness.” After all, absolutely nobody attributes these ideals with toiling away in a mid-management position at some foreign-controlled corporation, or slaving away in a sweaty manufacturing facility in middle America.
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To the contrary, self-employment is the backbone of American enterprise and capitalism. A place where cultivating the right idea could lead to untold riches or financial freedom down the road. Successful self-employment ventures are what lead to successful small business creation down the road, which everyone knows is the core driver of growth in America. Small businesses and the self-employed account for over 37 million of America’s 153-million-strong labor force, with outsized benefits to local community spending and tax receipts. They are America’s bread-and-butter.
But the worrying trend in self-employment can’t be overlooked any longer.
According to the latest numbers from the Federal Reserve Bank of St. Louis, fewer people are self-employed now than in 1988 (around 8.5 million people). This, despite the fact the population has expanded from about 245 million in 1988 to 324 million today. Adjusting for population growth, one would expect around 32% more self-employed individuals, rather than the static numbers we’re witnessing.
(Source: “Employment Level: Nonagriculture, Self-employed Workers, Unincorporated,” Federal Reserve Bank of St. Louis, last accessed May 30, 2017.)
This is especially troublesome since America is engaged in its third-biggest business cycle ever, and with historic low unemployment levels to boot. Low interest rates and cheap credit are yet another reason small enterprise formation should be gangbusters, instead of dying on the vine. So what’s happening?
In a nutshell, taxes and regulations are decimating the little people. The self-employed have far fewer resources than the goliaths they’re competing against, and this creates an unfair playing field. The percentage of income spent towards taxes, medical coverage, and other outlays by small business is becoming too onerous to sustain. The self-employed no longer feel they make a profit in markets that are becoming increasingly price-sensitive. If you’re not a big box store-like enterprise, the system squeezes you out. Business is become monolithic.
Yes, the stock market is still holding firm. But this is bad news for the economy in the long run. The inability for self-employment to gain traction is symptomatic of hardships ordinary people face in their regular lives. In a truly healthy economy, we should be seeing the exact opposite trends. This is what’s powered the American growth engine previously, not big conglomerates who offshore half their profits and run loopholes around the tax code. When the little person can’t compete in enterprise anymore, it’s unlikely that they feel confident spending freely in the economy. When it becomes too difficult to exploit the economy for personal enrichment, people will get exploited themselves lower down in the food chain.
The drip economic collapse is here, and horrible self-employment figures tell a big tale.
