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September 9, 2009
Who’s Counting? Michael Luo’s Sept. 7 NY Times article (http://tinyurl.com/lnuxtx) points out that millions of people were excluded from the latest unemployment rate, as they are every month – folks who are not counted in the rate because they have simply stopped looking for work. Not because they didn’t want a job, but because they are just too discouraged (or perhaps realistic) to keep searching.

The latest figures from the Bureau of Labor Statistics show the unemployment rate to be at 9.7% in August, a figure that is much higher in states like Michigan (15%), Nevada (nearly 13%), and here in California (just shy of 12%). To be included in these figures, a worker must be actively engaged in finding a job at some point in the preceding four weeks.

 

In addition to the official unemployment count, the BLS estimates that there were approximately 758,000 “discouraged” workers nationally, compared with 349,000 in November 2007 (just prior to the start of the Great Recession).

 

While these figures are startling enough, they do not include a group that no one in the government or media seems to be covering – the self employed. I’m talking about the beautician, the small shop owner, the gardener, or the communications consultant. Since these people cannot file for unemployment when their business slows or dries up, they are not part of the statistics. And, there are countless entrepreneurs in this camp.

 

It’s true that the self-employed may, for awhile, have some business. The beauty shop owner whose clients now come once every three months, instead of monthly, still has a stream of income. But shop rental and many other expenses tend to remain flat, so that ultimately, the business which once supported the owner is now in the red and unsustainable.

 

Walk through the business section of many cities and small towns. How many “Going out of Business” signs do you see on the small boutiques, the independent book stores, the resale shops? I bring these examples up, not to further depress our national psyche, but to just point out a huge group of entrepreneurs who are not being counted in BLS data.

 

What can be done? Probably not much on a macro level until the economy turns around. But if you’re employed or if you operate a business that’s still doing ok, think about the “uncounted.” Get that haircut. Buy that nice antique liqueur set. Talk to the web designer about updating your site or teaching you how to capitalize on the social media scene. Do strategic planning now so you’ll be ahead of the recovery curve. Some small business owner will thank you!

 

Next week: Throw 'Em a Bone, ok?

 

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