The holiday season is typically a joyous time for businesses and employees alike, with Christmas bonuses serving as a token of appreciation for hard work throughout the year. However, a recent survey paints a grim picture for America's small businesses, as they grapple with the weight of high inflation, expensive capital, and a slowing consumer economy. The Freedom Economy Index (FEI), a joint project of PublicSquare and RedBalloon, found that a staggering 42% of small businesses must forgo giving Christmas bonuses this year, while another 28% said bonuses will be smaller than last year.
RedBalloon CEO Andrew Crapuchettes stated that inflation has severely impacted small businesses, making it difficult for them to maintain traditional holiday practices. The survey also revealed that retailers are experiencing a significant slowdown in sales, with 52% reporting that Black Friday and overall Christmas sales are much slower than last year. Additionally, a whopping 8 in 10 businesses said their supplier prices increased over the past month, further exacerbating the economic strain.
Michael Seifert, CEO of PublicSquare, observed that 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. This economic squeeze is compelling small business owners to tighten their belts. The full weight of inflation is striking, as evidenced by the comments from small business owners in the survey's open-ended questions. Phrases like 'It's strangling us' and 'Crushing my business!' paint a bleak picture of the challenges faced by these entrepreneurs.
To cope with the difficult economic climate, 59% of respondents say they're having to work more hours than last year, with over half saying their workweek exceeds 50 hours. The reasons cited include inability to afford employee wages and rising costs of doing business. The survey also highlighted the growing misalignment between college graduates and workforce realities, with 91% of respondents believing that colleges are creating unrealistic expectations among students about their post-graduation job and work life.
Salary levels, work hours required, and the difficulty of work to be performed were ranked as the top areas where college students face difficulties when entering the job market. Seifert noted that practical experience and relevant majors are increasingly valued over institutional prestige in hiring decisions. As the holiday season approaches, the findings of the Freedom Economy Index serve as a sobering reminder of the challenges faced by small businesses in the current economic climate. While Christmas bonuses and celebrations may be scaled back this year, the resilience and determination of these entrepreneurs will undoubtedly shine through as they navigate these turbulent times.
