Small Business Optimism is Sky-High. Here’s Why That Matters.
The mainstream media may be predicting a recession, but it’s not all doom and gloom for the U.S. economy. In fact, there are plenty of reasons to be optimistic.
The Dow recently logged its longest win streak since May of last year, as the Chinese government announced that it will exempt U.S. pork and soybeans from its next round of tariffs. At the same time, American consumers continue to spend: Over the last 12 months, total retail sales are up by more than four percent—and climbing. This holiday season, American shoppers are expected to spend over $1 trillion at their favorite retailers—a five percent increase in retail sales.
But nowhere is there more optimism than in the small business sector. According to a recent Ipsos’ MetLife/U.S. Chamber of Commerce survey, two-thirds of small business owners rate their overall business health as somewhat or very good—the highest mark since the survey’s inception in 2017. A similar number say the same about the health of the U.S. economy writ large.
What they’re saying about the future is even more encouraging. In the next year, over a quarter of America’s small business owners plan to boost investment to expand their businesses, while nearly 30 percent anticipate “increasing staff.” Fifty-five percent of small business owners, meanwhile, expect their revenues to increase in 2020.
This suggests anything but a looming recession. On the contrary, America’s employers are dedicating themselves to business expansion and job creation—foundations of our free-market system.
That means more career opportunities for American workers, who exchange their labor for financial security as new jobs are created. When small business owners (and others) are expanding investment, that bodes well not only for long-term profit, but also the employees who bring value to the workplace.
Therein lies the paramount importance of small business optimism. After all, ours is a small business economy in many ways. America is home to more than 30 million small businesses, which employ roughly 60 million workers—half of the U.S. workforce. Large corporations like Apple, Google, and Walmart may garner the headlines, but 99.9 percent of American businesses are actually small businesses.
If small business is indeed the foundation of the U.S. economy, then entrepreneurship is the cement holding the entire structure upright. An entrepreneur’s decision to create a business, invest the requisite time and money to turn an idea into a reality, and hire the employees needed to see it through is the epitome of the American dream.
But it’s more than that. Entrepreneurship is the hallmark of America’s free-market system, without which we lose our competitive advantage on the global stage. The U.S. economy is often characterized as a “consumer economy” (and it is), but it has also yielded the most producers the world has ever seen. Look no further than the Fortune 500, which is overflowing with American brands.
What’s more, of course, entrepreneurship is inextricably linked to the job creation that millions of American need to remain financially secure. On average, a startup creates 5.27 jobs in its first year alone. In that sense, the vision of a single entrepreneur can positively impact the lives of countless others. This is especially true today, as many Millennials leave traditional workplaces to start their own ventures.
On that front, there is more reason for optimism. Based on recent research from the Kauffman Foundation, early-stage entrepreneurship has reached a 20-year high, driven by visionaries of all ages.
Whether a recession is coming or not, there is much, much more to America’s economic picture. And it is rosier than you’re led to believe.