The holiday season, traditionally a time of generosity and celebration, is overshadowed by economic challenges for small businesses across America. According to the Freedom Economy Index (FEI), a collaborative effort by PublicSquare and RedBalloon, 42% of small businesses are unable to provide Christmas bonuses this year, with an additional 28% reducing the amount compared to last year. This situation underscores the severe impact of inflation, expensive capital, and a decelerating consumer economy on the backbone of the American economy.
RedBalloon CEO Andrew Crapuchettes likened the current economic policies to the Grinch, stating, 'Bidenomics is the Grinch at this year's Christmas party. Inflation has crept in to steal the tree, the presents, and even the 'roast beast.'' The sentiment reflects the broader struggle of small businesses to remain operational amidst rising costs and diminished consumer spending. Retailers, in particular, are feeling the pinch, with 52% reporting significantly slower sales during Black Friday and the holiday season compared to the previous year.
The survey further highlights the escalating costs faced by businesses, with 80% noting an increase in supplier prices over the past month. Michael Seifert, CEO of PublicSquare, pointed out the ripple effect on consumer spending, '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 bonuses and working longer hours to compensate for the inability to hire additional staff.
Amid these challenges, the survey also sheds light on the disconnect between higher education and the realities of the workforce. A staggering 91% of respondents believe that colleges are setting unrealistic expectations for students regarding post-graduation employment. The disparity is most evident in salary expectations, work hours, and the nature of work, areas where recent graduates often find themselves unprepared.
As small businesses navigate these turbulent times, the findings of the Freedom Economy Index serve as a stark reminder of the resilience required to overcome the current economic hurdles. While the festive spirit may be dampened by financial constraints, the determination of small business owners to persevere remains undiminished.
