Both the government and media have declared the Great Recession is over and Recovery Summer is well underway. Naturally, if they say so, it must be true.
Or is it? To learn more, I've recently been conducting a completely unscientific, statistically invalid survey of colleagues, clients, business partners, friends and family scattered throughout the US.
The initial survey consisted of one question: On a scale of 1-10, how would you rate your economic recovery today, in comparison to your financial condition when the recession hit?
The rating scale was equally simple: 1 was a low rating (Yikes! little to no visible recovery), 5-6 was mid-range (battered but unbowed), and 10 was a high rating (the equivalent of fully recovered or better).
The results were fascinating and all over the board.
One small business owner rated the company's economic recovery as a -4 (yes, that's minus 4). The owner remarked that as difficult as it was to conceive, they're feeling the pinch even more now than they were 12, 18 or 24 months ago. Credit is tight, cash is tighter. "We're still making budget cuts," the owner said. "Customers were hard-hit by the downturn. Some shut down, others are still paring expenses in an effort to survive. Every sale is a hard-won coup."
The co-owner of another business rated their recovery as 0 (zero). They specialize in high-dollar extended contracts, and while they're still working on projects launched before the recession, they haven't landed a new contract since the crisis peaked. Ouch.
One top-level executive rated his company's recovery as 1. The company would gain some ground one month, but lose it the next. The recovery might be happening somewhere, but this company simply wasn't feeling any apparent positive effects.
Several respondents landed in the middle of the pack, with solid 5s. One said, "I still have a job, and for that I'm grateful. So many others aren't as lucky." That's a very good point. Another stated "business is not bad, but I have to work harder to get it. I am not recovering, I am getting better at finding and getting business." Fair enough.
Entrepreneurs are, at heart, optimists. One rated business as a 6.5. Another rated recovery as a solid 7 ... or maybe 5. On the positive side, business was "not nearly as bad as this time last year," and they "were having a decent month." On the negative side, they had no business booked for the next two months and viewed a number of future commitments as tentative rather than solid. Let's split the difference and call it an even 6.
So far, only one person has rated their recovery as a 10. Business is as good or better than it was two years ago. Kudos to them!
Right now, the average rating, when all the numbers are crunched, is a 3.6. In other words, many small businesses and households are barely staying afloat.
If I can find a small handful of people who can claim with a straight face (no twitches or tells) that their recovery is in the 7-10 point range, I might start believing the media hype.
Rate Your Economic Recovery
So, tell me, how would you rate your economic recovery? Take the simple survey (see the sidebar), and soon we'll publish the results.
Labels: General News