Small Business Week

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Small Business Week (held from May 5-May 11 this year) is organized by the US Small Business administration.  established in 1983 as a “national recognition event”, from then until now it is a chance for every American to shop local.

But it is so much  more than that.  this year for example, everyone was invited to participate in a free virtual conference over the first two days. in conjunction with SCORE Association, the SBA gave people the opportunity to network with other business owners, connect with industry experts and be involved in a hands on conference without having to actually leave their homes. Other events included: Small Business Week Hackathon; the National Awards Ceremonies and the NSBW Twitter chat.

During this week individuals are also encouraged to give small businesses attention and respect as well as buying their services/products.  America comprises over 30 million small businesses, providing jobs for 59 million Americans.  This is over a third of the entire workforce in the country and accounts for approximately 44 percent of the US GDP.

And Trump is a big supporter also.  He said his administration is: 

“A strong ally and advocate of small businesses and their ability to help America reach its full economic potential.”

Which is supported by the provision of the Tax Cuts and Jobs Act which lets small business owners deduct 20 percent from their taxable business income. Trump also issued Executive Order 13771 (E.O. 13771): “Reducing Regulation and Controlling Regulatory Costs [requiring] For every new regulation issued, at least two prior regulations be identified for elimination. [In addition] The cost of planned regulations [must] be prudently managed and controlled through a budgeting process.” 

A Thriving US Economy

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America’s economy is thriving. Or so the numbers tell us.  Here we take a look at some of the figuresthat help us feel optimistic for the future of the US economy.

  1. In Q1 2019, there was an annual growth of3.2 percent.
  2. At the start of Q2 2019, the unemployment rate fell to 3.6 percent(lowest it has been in the last five decades).  
  3. Real wagesof the average Joe in the street increased by 3.2 percent(first time in over 10 years).
  4. Inflationis lower than the 2 percent target at 1.6 percent.
  5. 5.4m+ new jobshave been added since January 2017.

According toYum Brands CEO Greg Creed:

“Obviously the US economy is in pretty good shape. But I also do think that there is some sort of bifurcation going on in the marketplace. There are certainly people making a lot of money, there are certainly people for whom value will remain incredibly important.” 

Although it should also be noted that prices are rising. In the restaurant industry – often in line with the increase in labor costs due to the law on the escalated minimum wage – the large chains are elevating their prices likewise.

More generally, prices are rising in the restaurant industry as labor costs increase with higher minimum wages and a more competitive labor market. McDonald’s, Starbucks, and Chipotle all mentioned raising prices in the most recent quarter during calls with investors.   At the same time, the middle class is becoming smaller.  The Pew Research Centerfound 50 percent of Americans to be in the middle class; quite a drop from the 61 percent figure of 1971.  

There is still of course the quite dramatic gap between top and bottom earners vis-à-vis income increase.  In 2017 the bottom fifth of the population witnessed a very minor increase (2.7 percent belowpre-recession figures) in their income whereas the top fifth enjoyed a much higher one (8.7 percent higherthan pre-recession figures).

Bolstering America’s Economy Through Technology

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Technology is good for the economy

Technology is good for so many aspects of society.  One of them is preservation and growth of an economy.  In a new book written by MIT economists Jonathan Gruber and Simon Johnson entitled, ‘Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream, the two make the case for the benefits of investing in bolstering technology into the economy.

They argue that as well as strengthening growth, supplementing investment in science results in better job opportunities and higher wages.  This is especially useful now when so many Americans believe their salaries are not conducive to their everyday expenses.  Johnson said:

“Good jobs are for MIT graduates, but they’re also for people who don’t finish college. They’re for people who drop out of high school. There’s a tremendous amount of anxiety across the country.”

According to Bloomberg’s US State Innovation Index, California is America’s “most innovative economy” based on the following factors:

  1. STEM jobs
  2. R&D
  3. Firms in technology
  4. Productivity
  5. Individuals who have science/engineering degrees.

Perhaps therefore not surprisingly – supporting Johnson and Gruber’s theory – a CNBC article found that California accounted for almost ¾ of non-farm jobs created in America in February; an additional 14,600 (nonfarm) jobs were added by the state last  month; a report found that nonfarm payrolls in America increased by 20,000 jobs. Furthermore, Forbes contributor Mike Montgomery found that “technology can help prevent future California wildfires.” So there really is a lot to be said in favor of the benefits of technology for a state (and country’s) economic welfare.

Looking for a Job?

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A job is so much more than a paycheck.  Obviously the monthly wage one brings home is crucial but having a place to go every day benefits one’s self-esteem; bolsters social skills and can even take one’s mind off everyday worries.  As such, the more people who are in gainful employment, the better for them, their families and society as a whole.  Here we take a brief look at which US states offer the best employment opportunities.

GoBankingRates recently conducted a study on the best places to find a job.  While nationwide the last decade has witnessed a 17+ percent growth rate, different states have varied employment growth rates.  For example, Colorado seems to offer the most employment opportunities and has a five year average annual unemployment rate of only 5. 7 percent.  Not only that but if you do live there, public transportation is good and improving. Private transportation is on the same page since there are now new vehicles in the market, powered by local electricity.  This of course is great for the environment and supplements the state’s economic development while offering customers reduced energy costs.

Over in New Hampshire – the second best place to find a  job in America right now – unemployment figures are a mere 3.2 percent and the state has added a third additional job vacancies than people seeking work.  Offering some of the lowest property taxes in the nation, with a median price of a home estimated at $244,900, economics look good for people living in the state of New Hampshire.

And then there is Utah (employment growth rates of 12.5 percent for 5 years and 17.4 percent for 10) with an unemployment average of just 3.4 percent in five years.  Minnesota also boasted a 10 year employment growth of 9.4 percent with one of the lowest unemployment rates nationwide. 

So job seekers have quite a lot to consider. If it does seem you’re just not getting the job you need/want, check out these other states for greater success.

Automobile Industries and America

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automobile industry

We often hear about US industries that choose to go abroadperhaps looking for cheaper labor, but what about the firms which are now choosing a return to American soil?  Here we take a look at ones from the automobile industry.

The Groupe PSA (French multinational automobile manufacturer of cars including Citroen, Peugeot, Vauxhall) is planning a comeback of its Peugeot brand.  Back in 2016 the firm started working on a 10-year plan to create its presence in North America.  In 2018 it offered a car-sharing service in Washington, DC.  

Within the same industry the Chinese wish to make a presence in America too.  The problem there of course is the ongoing US-China Trade war and the US’s increasing vigilance vis-à-vis Chinese technology.  Despite this, Americans are really starting to favor electric vehicles with government policy promoting eco-friendly cars.  according to GAC Motor President, Yu Jun, the firm’s “ultimate objective is to build the company into a world class brand and a global player,” which would obviously benefit from the creation of a presence in the US.  

Yun really believes that the his brand will ultimately win over the Americans despite the politically-economic issues.  Indeed, the company’s Entranze electric concept car was unveiled in Detroit at January’s North American International Auto Show held in Detroit and received well. Entering the US market in 2015, Yu pointed outat the show that the firm has since “been making steady progress” in the US market.

Then there is Volkswagen. supporting approximately 16,400 jobs in Tennessee via the Chattanooga assembly plant and other impacts, a substantial amount of revenue is being generated from the firm.  for example, in 2017 Tennessee took around $73.8m in state and local taxes.  It was good for Volkswagen too since its economic output in Tennessee was approximately $8.56 billion in 2017.  

So for automobile industry workers, the US economy is really working!

The US’s Global Power: Today and Tomorrow

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Global power

We know that America is a superpower but in practical terms, what is its real contribution to the world economy? Given that the United States actually purchases over $500bn morethan it exports, the net contributionAmerica is making worldwide gives it a very impressive status within the international economy.  This also leads to an enhancement of Washington’s role as a world superpower.

This gives America heightened bargaining status vis-à-vis the coordination of global economic policy. And that is the most important assignment undertaken by G-20 summits – the address for the international economic forum. This year, come June – when America’s representatives head out to Japan for the meeting – America’s position will be stronger, especially vis-à-vis its capacity to reduce its trade deficits.

Furthermore, as soon as President Donald Trump pushed back the March 2nddeadline in the US-China trade dispute. There has been progressfrom both China and US in reaching a solution but as Oxford Economics Chief US Economist Gregory Daco cautioned:

“Popping the champagne today would be premature.  [The far-reaching disparity between the two nations] will prevent a significant de-escalation of trade tensions between the two giants.”

Indeed, if the end of year figures are anything to go by, the champagne bottle shouldn’t even be purchased yet. According to figures from last year, the fight to find a solution between the two nations “disrupt[ed] the global trading system and the cross-border production lines that businesses have built over recent decades.”  Plus, a recent National Association for Business Economics surveyfound that 75 percent of economists believe America’s economy will slump into a recession by 2021, the China-US trade war being cited as the main reason why.

US Economy 2019 Predictions

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Road ahead for 2019

Despite the country countering perhaps its longest ever government shutdown – resulting in a projected decrease of US GDP by $8bn in Q1 2019 – the Congressional Budget Office has predicted a growth in economy of 2.3 percent this year. 

Still, that is a hit given that 2018 saw a 3.1 percent increase.  Tax cuts and federal spending increase attributed to that growth.  even though currently there are concerns due to the US-China trade tensions and concerns of an international economic slowdown, the fact that the CBO is predicting even 2.3 percent is good news.

In its Budget and Economic Outlook: 2019-2025 Report the CBO stated:

“federal revenues rise from 16.5 percent of GDP in 2019 to 17.4 percent in 2025 and then grow more rapidly, reaching 18.3 percent of GDP near the end of the decade. The projected growth in revenues after 2025 is largely attributable to the scheduled expiration of nearly all of the individual income tax provisions of the 2017 tax act.”

Still, the US economy cannot afford to rest on its laurels.  according to a recent CCN article, America’s place on the world economic throne is likely to be challenged and:

“The United States will fall to a third place in the ranking of the largest economies in the world. China and India will overtake the U.S. by 2030, and it is unlikely that we will ever get the throne back.”

The American Dream: A Look in 2019

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President and CEO of the US Chamber of Commerce, Tom Donohue presents his 2019 State of American Business address in this video.  He focuses on policies that result in the bolstering of growth to “enable workers, families, and businesses to pursue their American dreams.”  As such, in the video, one business owner Brian Steorts, Flags of Valor, described his American dream as the ability to “remember, employ and empower” his employees…remembering how we became the greatest country in the world.

Maria Rios of Nation’s Waste, explained: “Coming to this country from El Salvador, becoming an American citizen and starting my own business and creating jobs for other americans; that was my American dream.”

Mark Wilson, Chime Solutions, Moscow, GA “My American dream was to see people reach their full potential; that’s what the American dream is really all about.”

There are different American dreams here; but business is the “common thread that combines them.”

Economics and the Gender Disparity

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US economics: gender disparity

Despite major strides having been made in closing the gender gap in many industries, it still remains and in some sectors, quite substantially too.  This was a key area of discussion at the annual American Economic Association which took place earlier this month. 

Attended by thousands of economists, each year – hundreds of whom delivered their papers – this year’s event had a definite underlying theme; the gender disparity that continues to exist in global economics.  Keynote speeches on where today’s economy is at were given by Jay Powell, current chair of the US Federal Reserve as well as past chairs, Ben Bernanke and Janet Yellen.

according to a paper presented last year by Alice Wu on Gender Stereotyping in Academy, when it comes to the principal economic jobs’ online forum, there is clear discrimination against female economists with 85 percent of full economic professors being men.  in addition, the Nobel Prize for Economics has only been awarded to a woman one time and over the last two decades, only a third of women hold positions as economic majors nationwide.

Another example of existing chauvinistic attitudes was found in a study brought up in an interview with Bell Award winner Rohini Pande.  she referred to a study  which proved how men advance in economics and gain tenure for both authoring and co-authoring papers whereas their female counterparts only get it when authoring.  the assumption made is that a female co-author has not undertaken the research; only the man.

According to the World Economic Forum’s Annual Global Gender Gap Report, “it will take 108 years to close the gender gap worldwide according to today’s criteria. When the index was first conceived in 2006, assessing countries on their progress in four areas – economic opportunity, education, health and survival, and political empowerment – it was hoped there would be a vast improvement in both the opportunities and rewards offered to women.”

This timeline is clearly unacceptable and of the 149 countries surveyed, the average gender gap remains too large – at 32 percent.