It seems certain that a respectable amount of improvement in both the economy and the job market has taken place since the depths of the recession. But if we?re honest, the job market has not returned to normal, at least not ?normal? in the way that it was in 2006, and certainly not for most of the 1990s.
The job market is now facing threats it never has before, and it seems likely the changes are long-term in nature and less related to the recession than most of us think. We can complain and moan about the weak state of employment ? or we can do something about it.
That something is creating a side business. I?m of the opinion that this is the best single strategy most of us can implement in response to very limited employment opportunities. Having a side business can create the following opportunities:
- An opportunity to increase your income – think of it as a chance to give yourself a raise, even if your employer won?t.
- It can provide you with new opportunities, sort of like giving yourself a promotion.
- Act as a valuable safety net in the event of a job loss.
- It could be the start of your next full-time occupation.
- The extra income can allow you to accumulate savings and investments much faster than you can from your job alone.
- It can give you the opportunity to spread your creative wings and do work you really like doing.
- It can be an important extra income source in retirement.
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The 29 hour work week
You have probably been reading and hearing about the changes in the healthcare system coming about as a result of the Affordable Care Act, otherwise known as Obamacare. One of the less savory aspects of the law is that it will require employers ? who have 50 or more employees ? to provide health insurance coverage to any employees who work an average of 30 or more hours per week.
On the surface, that can seem like a positive development – health insurance for part-time work. But that?s not what is playing out on the job front. Though the implementation of this provision in the law has been moved out to January 1, 2015, some employers are already beginning to react to it by cutting the regular hours of both part-time and full-time employees to something less than 30 hours per week. The more people they can cut hours for, the fewer they will be required to provide health insurance for.
Unless this requirement is repealed, we should fully expect to see more part-time jobs and fewer full-time ones. I don?t even think that it’s extreme to project that the 29 hour workweek may become the standard workweek in the not-too-distant future.
If that is the case, then we should begin now to plan for a part-time job plus something else. That something else could very well be a side business, especially something that will blend well with a part-time job. The other alternative will be maintaining two part-time jobs, but that could leave you working 50 to 60 hours per week, trying to earn as much money as you used to make from a single full-time position. Try furthering your career with that kind of arrangement.
Promotions and pay raises just aren?t what they used to be
Apart from the rising prospect of fewer full-time jobs, many ? perhaps most ? workers have been struggling in jobs with either low or nonexistent pay raises. For many more, it has been years since the last promotion, particularly one that involved a substantial increase in pay.
It may be that the only way to increase pay and by extension, position, will be through a business that you keep outside your job. Employer cost-cutting fever has gotten in the way of employee progress. There may be no alternative but to take matters into our own hands by having a side business.
A job loss is just a pink slip away
We also need to ask ourselves if the job market is this anemic four years after the recession ended, how much worse can it get when the next recession hits? Answer: a lot worse.
The current negative trends we?re seeing in employment are not temporary, no matter how much we may wish them to be. There are all kinds of changes sweeping the economy, and it?s all having a negative effect on jobs. Because the forces degrading employment are only gathering steam, we should not expect the job market to heal itself in any way.
Rather than going into detail about forces that are weakening employment, check out this explanation from Mike Shedlock at Mish?s Global Economic Trend Analysis. It?s probably the best description you?ll see in one place as to what?s happening with employment throughout the world, and especially in the US.
Whether we like it or not, a lot more of us will have to become entrepreneurs in the near future, and having a side business is a low risk way to get started.
Side business options
If you agree that having a side business may be your best opportunity for the future, the question then becomes what business should you go into? I would suggest that you emphasize either a venture involving some kind of work that you really like to do – even have a passion for – or one where you have a considerable level of skill and expertise, even if it?s not at all related to your job. The best choice would of course be a business that combines both your passion and your talents, though that?s admittedly difficult to accomplish.
If you are having difficulty coming up with ideas, consider these business, which are discussed in greater detail by clicking on the links provided:
- The Perfect Side Hustle: Freelance Blog Writer
- Blogging for Beginners ? The Crash Course
- Professional Speaking ? Turning a Passion Into a Career
- How to Start Your Own Online Store
- Frugal Entrepreneurs ? Start a Consulting Company
Seriously consider starting a side business if you don?t have one, or ramping up one that you already have underway. The best time to build any business venture is when things are calm and you don?t need to do it. That will allow you time to build the business gradually, as well as afford you time to make mistakes.
Do you agree that – given the state of the job market – a side business may be your best opportunity for the future? Do you see any other options in regard to employment? And more important, do you think that the negative trends that are affecting the job market are temporary and will improve in time, or that they really are the wave of the future?
Really excellent post! I agree that starting up something on the side is the best way to ensure you’ll be set now and in the future. I agree with all the points you brought up, especially the fact that even if you have full-time employment, pay raises just aren’t what they used to be 10 years ago. I know people who used to receive cost-of-living raises, and that was just one of the benefits of working with a particular company – but that’s gone now, and for people who are younger like me, that was never even a reality. And of course, we should all be really aware that we could lose our jobs tomorrow. It may sound paranoid, but I’d rather accept that as a possibility even if it’s not probable than to become complacent and then be completely unprepared if the worst were to happen. Again, great post; you gave us all some good reminders as to why side gigs are important!
Hi Kali – Thanks for the kind words! I think what may be happening is that the post World War II boom has ended, and we’re going back to the way the economy was for centuries. There was no job security and people had to rely heavily on some form of self employment in order to make a living. It won’t look like it did 100 years ago, but we’ll be working in some sort of business. And I don’t think that’s a bad thing either.
Self-employment creates a self-reliance not found in holding a job, even if it’s a side business. You have to literally create a paycheck each day, and there’s a sence of independence that comes when you learn how to do it.
When it comes to retirement, for most of us, a side business makes more sense than anything. I know for certain the day I retire, I am going to be in pretty rough shape unless I can get something going on the side. I can already see myself dressed up in a a crossing guard outfit at the local elementary school, sweating my behind off every day!
Hi Dillard – I’m not looking down on the crossing guard job, but if that’s not what you want to do, you should start working on a viable alternative now.
Everyone thinks that saving enough money is the key to retirement, and it largely is. But the problem is that relatively few people will have a seven figure investment portfolio to reire on. And even if you do, if you start taking it out at 65, you could largely deplete it in a few years. Inflation won’t stop when we retire!
SIde business is a must, heck multiple side businesses are a must. The middle class is disappearing rapidly and if we can somehow supplement our income, than our chances of survival (or even better.. moving up into a more affluent socioeconomic class) greatly improve. Great post Kevin!