Rethinking unemployment numbers

We’ve been highly suspicious of recent unemployment figures being released by the U.S. Bureau of Labor. However, a phone call today made us change some of our underlying assumptions, namely the notion that people are leaving the labor force, therefore pushing down the unemployment rate. Perhaps they aren’t leaving the work force, they are simply becoming self-employed.

The phone call was to Kayne & Sons Blacksmith Depot, a North Carolina company that supplies blacksmith tools among many, many other things. This is a totally family-run operation – the fifth generation is now working in the company. None of these people, wives included, are likely to be “looking for work.” Yep, self-employed small business people may be taking up the slack.

In the Midwest, of course, we have hundreds of multi-generation family farms and businesses. It’s a tradition. Some farmers we know have advised their kids to get out of farming, but it’s in their kids’ blood and they’ll never quit.

Over here in the West, there is a fourth-generation family-run company, Henningsen Cold Storage. Their merit-based, experienced top-management team includes non-family members. The company policy of promoting from within quite possible inspires theis several hundred employees.

We could go on. Our point is that when the big corporations start laying off their thousands of people, the U.S. economy benefits mightily from this infusion of bright, well-educated people, though the laid-off people might wonder about that.

What happens is that some go to work in the small family company, others start their own businesses, others start freelance consulting. This has happened before – back in the early 1980s, thousands of middle managers found themselves out on their ears as computers rendered them redundant. What did they do? They started their own businesses, or bought franchise businesses and were happily independent with no boss for the first time in their working lives.

What do we learn from this?

1. The terms “freelance” and “consultant” no longer mean “looking for a ‘real’ job,” they mean “no longer dependent on a company and lovin’ it!”

2. Once again, there is a massive, unrecognized cultural shift going on.


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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