Economic Contradictions Leave Small Businesses in Wait-and-See ModeThe February 2024 Freedom Economy Index (FEI), co-published by PublicSquare and RedBalloon, reveals the contradictions in recent economic data, leaving America’s small businesses uncertain about the future. While layoffs and inflation dominate headlines, the latest FEI survey of 80,000 small businesses shows a mixed outlook. Businesses are adopting a cautious "wait-and-see" approach as they navigate the complexities of today's economy.Doubling Up on Jobs: Many Workers Hold Multiple JobsOne surprising finding from this month's survey is that 40% of small business employers report that 30% or more of their workforce holds a second or even a third job. This may help explain the unexpected rise in January’s Bureau of Labor Statistics report, which showed 353,000 new jobs created—double the economist estimates. Younger businesses are more likely to have employees working multiple jobs compared to older, more established companies.Job Hopping and Relocation ConsiderationsThe trend of job-hopping continues, with 39.7% of employers noting that workers are still moving between jobs frequently. Additionally, flexible work arrangements, such as remote or hybrid schedules, remain in high demand. When it comes to relocation, nearly half of small business owners nationwide are content with their current location, but in California, 67% are considering or planning a move due to high taxes and anti-business policies.The Big Question: What’s Really Happening in the Economy?FEI respondents offered varied insights on the current economic state. Many believe the economy is worsening, with layoffs increasing and wages stagnating. Rising credit card debt, escalating housing costs, and inflation are common concerns. Some feel that the economic recovery is a façade, with more Americans relying on credit to make ends meet. Small businesses, especially restaurants and retailers, continue to struggle under the weight of these challenges.Revenue and Hiring TrendsIn January 2024, over half of small businesses reported lower or much lower revenue compared to a year ago. Pessimism about the future is on the rise, with 51.3% of business owners feeling pessimistic or worried about their business prospects. Despite this, there was a slight uptick in hiring for new and replacement positions, though the number of businesses reducing staff also increased.Business Owners’ Priorities for the State of the UnionWhen asked what President Biden should focus on in his upcoming State of the Union address, 46% of business owners prioritized US border security, while inflation and foreign policy were lower on the list. Crime is another growing concern for small businesses, with 70% of respondents noting an increase in crime in their areas, particularly in California, where 52.8% reported significant crime increases.AI Adoption: Warming to New TechnologiesWhile small business owners remain cautious about artificial intelligence (AI), 18.2% report growing more comfortable using AI, and 65.6% expect AI to replace entry-level jobs in the near future. However, many remain uneasy about adopting this technology fully, reflecting broader concerns about AI’s impact on the workforce.Signs of Stabilization Amid Ongoing ChallengesAs we move further into 2024, the Freedom Economy Index reveals a mix of caution and resilience among small businesses. While the economic outlook remains challenging, there are signs that hiring and business sentiment may be stabilizing. However, for many, the road to recovery will depend on more supportive government policies that address the needs of small business owners.For more insights from the February 2024 Freedom Economy Index, including detailed views on inflation, crime, and business relocation trends, you can read the full report.
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