In the midst of surging inflation, exorbitant capital costs, and a faltering consumer economy, the Freedom Economy Index (FEI), a collaborative project by PublicSquare and RedBalloon illuminates the myriad challenges confronting America's small businesses.
The late-November survey highlights a grim reality—42% of the nation's small businesses are forced to forgo the tradition of Christmas bonuses, with an additional 28% acknowledging diminished bonuses compared to the previous year.
The FEI serves as a sobering barometer, providing a stark portrayal of the struggles endured by the backbone of the nation's economic landscape.
“Bidenomics is the Grinch at this year’s Christmas party,” said RedBalloon CEO Andrew Crapuchettes. “Inflation has crept in to steal the tree, the presents, and even the ‘roast beast.’ America’s small businesses are simply trying to stay afloat in this difficult economy.”
Retailers responding to the latest Freedom Economy survey said that Black Friday and Christmas sales are down overall this year, with 52% saying sales are “much slower” than last year. Additionally, 8 in 10 businesses said their supplier prices increased over the past month.
"Consumer spending is feeling the pinch due to exacerbated economic conditions, making it challenging for the average American to adhere to their customary Christmas budget," observed Michael Seifert, PublicSquare CEO. "This economic squeeze is compelling small business owners to tighten their belts."
The commentary provided by American business owners underscores the full weight of inflation:
“It’s strangling us.”
“I've had to raise my prices 3 times in the past year to be able to survive.”
“All of my expenses have increased. ALL OF THEM.”
“It's killing my business.”
“We now have the least amount of projects booked since we started our company.”
“Getting hit from all sides…”
“We have been financially bleeding out for months. If things don't change soon, we are in trouble.”
Small business owners may not be ‘home for Christmas’ either, as 59% of respondents say they are having to work more hours than last year, with over half saying their workweek exceeds 50 hours (about 2 days).
Why all these extra hours? 56.4% say because of the “difficult economy.”
Again, their written verbatim feedback is laden with frustration and exhaustion. In response to the question “What has contributed to the change in hours you work?” They said:
“I can't afford to pay my employees as much, so I have to do their work and I have to find creative ways to make more money which takes more time.”
“Had to lay off multiple employees in 2023 due to clients shutting down.”
“My workload is growing as fast as inflation.”
“Rising costs of doing business and not being able to charge what is reasonable without losing clients.”
“Laying off employees to stay profitable.”
Employers also grapple with the widening gap between college graduates and workforce demands. 91% of respondents said they “believe that colleges are creating unrealistic expectations among students about what their job and work life will be like post-graduation.”
Employers also ranked “salary levels,” “amount of work hours required,” and “difficulty of work to be performed,” as the top three areas in which college students have difficulty when entering the post-college job market.
“This data aligns with our October findings, indicating an increasing devaluation among employers of job seekers with college degrees,” Andrew Crapuchettes said. “It’s not the students’ fault that they are not ready. Higher education could better align with the labor market demands to benefit both graduates and Main Street business owners.”
“It used to matter where you went to school, but our business owners now ask, 'What have you done?'” Michael Seifert, PublicSquare CEO, said. "Having four years of industry experience increases your likelihood of being hired. However, what your major is will also impact the evaluation process. Without a business major, you may face challenges in the assessment.”
In the latest FEI numbers, despite concerning economic trends and lackluster higher education ratings nationwide, the November report unveils more than just doom-and-gloom. It reveals a burgeoning spirit of independence and self-reliance among small business owners. The thriving Freedom Economy demonstrates to these entrepreneurs that they stand united and need not conform to the dictates of mainstream media or cancel culture.
With tools like the FEI, they voice opinions. Backed by supporters such as PublicSquare, they align with businesses sharing values. With resources like RedBalloon supplying talent for these resilient companies in the Freedom Economy. In this landscape, they reclaim control over their futures. And despite all of the economic challenges, they persist in forging America's future, celebrating Christmas, and embracing a new year.
Methodology:
The Freedom Economy Index surveyed a universe of over 70,000 small business owners throughout the United States, fielding the questionnaire from November 30 to December 5, with 682 respondents. The survey has a margin of error of +/-4.0% at the 95% confidence level. Download the full November report here.