The US Economy is Not Recovering
Despite US media’s trumpeting the Obama Admin’s numbers lauding the so-called “recovering” US economy, a new Gallup report said that is not true.
There is a Big Problem: The deaths of small businesses under the Obama Administration outnumbered their births.
That is because there has been much long-term degradation of the US economy, to the point at which the percentage of Americans who say they are in the middle or upper-middle class has fallen 10%, from a 61% average between Y’s 2000 and 2008 to 51% today, the report said.
“10% of 250-M adults in the US is 25-M people whose economic lives have crashed,” it noted, adding that these 25-M people are invisible in the widely reported 4.9% official US unemployment rate.
Millions of Americans, even if they are gainfully employed in good jobs, are just 1 degree away from someone who is experiencing either unemployment, underemployment or falling wages, the report said.
There are 3 serious metrics that need to be turned around or the country will lose the whole middle class, it warned.
According to the US Bureau of Labor Statistics, the percentage of the total US adult population that has a full-time job has been hovering around 48% since Y 2010, the lowest full-time employment mark since Y 1983.
The number of publicly listed companies trading on US exchanges has been cut almost in half in the past 20 years from about 7,300 to 3,700.
Because firms cannot grow organically, meaning build more business from new and existing customers, they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of US public companies. “This seriously contributes to the massive loss of US middle-class jobs,” Gallup said in the report.
At the same time, new business startups are at historical lows. Americans have stopped starting businesses. And the businesses that do start are growing at historically slow rates, it said.
All is not Gloom & Doom, the report said. While free enterprise is in free fall, it remains flexible, and small business can save America and restore the middle class.
Small businesses, startups plus “shootups” that grow big are the engine of new economic energy. According to the US Small Business Administration, 65% of all new jobs are created by small businesses, not large ones, Gallup said.
There is a Big Problem: The deaths of small businesses recently outnumbered the births of small businesses.
The US Census Bureau reports that the total number of business startups and business closures per year crossed for the 1st time in Y 2008.
In the nearly 30 years before that, the US consistently averaged a surplus of almost 120,000 more business births than deaths each year. But from Y’s 2008 to 2011, an average of 420,000 businesses were born annually, while an average of 450,000 per year were dying, Gallup said.
“America needs small business to boom again. Small businesses are our best hope for badly needed economic growth, great jobs and ultimately accelerated human development,” Gallup said.
Have a terrific week.