The holiday season, traditionally a time of generosity and celebration, is casting a shadow over America's small businesses as they confront the harsh realities of high inflation, expensive capital, and a decelerating consumer economy. According to the Freedom Economy Index (FEI), a collaborative effort between PublicSquare and RedBalloon, a significant 42% of small businesses are unable to provide Christmas bonuses this year, with an additional 28% reporting that bonuses will be reduced compared to last year. This situation underscores the financial pressures small businesses are enduring in the current economic climate.
RedBalloon CEO Andrew Crapuchettes likened the impact of 'Bidenomics' to the Grinch, stating, '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.' The survey further illuminated the challenges, with 52% of retailers noting a significant slowdown in Black Friday and overall Christmas sales compared to the previous year. Moreover, 80% of businesses reported an increase in supplier prices over the past month, adding to the economic strain.
Michael Seifert, CEO of PublicSquare, commented on the consumer spending downturn, '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 pressure is forcing small business owners to make difficult decisions, including cutting back on holiday bonuses and working longer hours to compensate for rising costs and reduced consumer spending.
The survey's open-ended responses from small business owners vividly depict the toll of inflation, with phrases such as 'It's strangling us' and 'Crushing my business!' highlighting the dire circumstances many face. To adapt, 59% of respondents are working more hours than last year, with over half exceeding a 50-hour workweek. The reasons range from inability to pay employees adequately to the rising costs of doing business without the ability to pass these costs onto customers without losing them.
Additionally, the survey shed light on the disconnect between college education and workforce realities, with 91% of respondents believing colleges are setting unrealistic expectations for students regarding post-graduation job prospects and work life. The challenges for new graduates were identified in salary levels, required work hours, and the difficulty of tasks, underscoring a growing misalignment between education and employment needs.
As the holiday season unfolds, the findings from the Freedom Economy Index serve as a stark reminder of the economic hurdles small businesses must overcome. Despite the scaling back of Christmas bonuses and celebrations, the resilience of these entrepreneurs remains a beacon of hope as they navigate through these challenging times.
