It’s been difficult to turn on the TV lately and not hear about the plight of the nearly 2 million Americans who were set to lose their unemployment benefits during the holidays. Fortunately for those out of work, Federal unemployment insurance may be extended an additional 13 months as part of the new tax cut deal.
I’ve certainly expressed my opinion about the high unemployment rate in past posts such as the one I wrote about the 99ers in Silicon Valley who were featured on 60 Minutes. I truly feel sorry for those who cannot find work. I know firsthand the stress that the situation can cause on an individual and a family.
But, I truly believe that this extension of benefits is simply putting a Band-Aid on a gunshot wound. It’s not going to help too much.
Sure, the government can kick the problem down the road for a few months, but the overriding reality that there are simply fewer jobs out there needs to be addressed by more than just morning news reporters.
Why are there fewer jobs? I’ve stated before my theory. Improved technology + companies using more freelance/contract help + higher healthcare costs = Fewer Jobs.
Here’s what I mean.
Technology
Technologies, such as Cloud computing and VoIP which have both taken off since the recession, now make it easy for teams of people to collaborate and communicate in multiple locations from anywhere in the world. This means that both onsite and offsite employees can work together seamlessly. So, a lot of companies are doing just this and hiring outside of the U.S. where labor is cheaper.
Freelance/Contract Work
Many companies that laid off workers are now hiring freelancers and hourly contractors. I know this for a fact because more than a few of these companies have hired me for projects. Sites like Elance, Guru, and oDesk make it easy for businesses to find qualified people who are willing to work without benefits and guaranteed employment.
Higher Healthcare Costs
Here’s the component of the current unemployment rate that I don’t think gets considered enough. Many businesses are not hiring because they can’t or don’t want to pay for employee health insurance. And, many individuals are scared to start businesses, to leave bad jobs, or to become freelancers because they’ll be without health insurance if they do so.
In my opinion, our healthcare system is holding this country hostage. It’s hindering would-be entrepreneurs. It’s bankrupting families, and it’s stopping existing businesses from hiring.
The healthcare issue is a huge problem and is something that our family has faced firsthand when my husband was laid off. We were dropped from his former employer’s insurance three weeks after the lay off. We were denied private insurance because of pre-existing conditions, and we couldn’t afford COBRA on what we received in unemployment compensation. After this happened, Judd was hospitalized with pneumonia and a collapsed lung. Yes, after experiencing a layoff, the last thing we needed was a huge hospital bill that we couldn’t pay for. Does this seem right? No, it’s not.
Yes, we were lucky. I was able to start a business because I had some marketable skills. And, my husband was able to find work. We were able to pay off our hospital bill, and we now have health insurance! But, you know what? If my husband didn’t get these benefits from his employer, our family would be without healthcare coverage. I would then have to look for a job with benefits and would be forced to close my business. As well, I probably wouldn’t be able to be a stay-at-home mom to our boys. Our situation isn’t unique. And, everyday families across the United States are making decisions about work and life based upon keeping health insurance coverage because the stakes are too high. Very, very few individuals actually have enough money to pay for a major illness or injury if they didn’t have insurance.
So, I truly believe that health insurance is the big silent problem that is creating the high unemployment rate and hurting the economy as a whole.
I frankly don’t know if a government healthcare system is the right solution or if there just needs to be less expensive private options. But, I absolutely believe that it’s insanely ridiculous that healthcare is politicized since both Democrats and Republicans get sick. And, I do know that the current system doesn’t work, and I’m not seeing any impact from the healthcare reforms that were passed earlier this year. So, I don’t think our country can wait until 2014 to find relief, and if improvements don’t happen soon, the government will need to extend out those unemployment benefits a whole lot longer.
Theentrepreneurialmom's Blog 
Julie-
This is a very accurate portrayal of the current economic environment. I hope this blog post will result in a widespread discussion regarding the situation many people find themselves in due to the economic downturn and supposed economic recovery.
Thank you for voicing our concerns in a cogent manner.
Hi Julie! I read about you on The Huffington Post tonight. What you’ve been able to do is so impressive – and encouraging.
You make some very good points, and our healthcare system, in my opinion, is seriously flawed.
But my bursing question for you is this – what advice do you have for other moms in a situation similar to yours? My husband is currently unemployed; and we barely make enough on his veteran compensation to stay afloat. I have the skills, but not neccessarily to experience to make it happen up until this point. I would love any pearls of wisdom/encouragement you could offer.
Hi Dominique:
Thanks for writing. When this happened, we were so blindsided by it all, that I really didn’t have the time to sit and develop a business plan. I just knew I needed to make money or else we were going to end up in dire straits. So instead, I wrote a list out of what my skills were (writing, marketing, PR), and I started looking online for opportunities. I searched Craigslist, Elance, Guru, etc. I told everyone I knew that I was starting my own business and would appreciate any referrals. Basically, I left no rock unturned. If I saw companies who were hiring, I wrote them with details about my business. I never shyed away from telling them about our family’s situation.
Projects started coming in as soon as I got into this everyday cycle of looking for opportunities. Then, once I received a project, I asked for more work and referrals. I still work with many of these first clients and their referrals. That’s basically how I did it. I saw some negative comments about my article that I must have had a lot of financial support to start my business. But, actually I had none. I started my business with a computer, an internet connection, and a phone – nothing else. I believe anyone can do this if they have some skills and ambition to make it work. I’m going to write about this topic today on my blog. I think I need to go into more detail from what the article said so that others can see that you don’t need lots of cash to start a business.
Thank you so much for your thoughtful response. I’ll definitely check back for that post. Were there any websites/resources that were especially helpful to you while finding work?
Without much start up capital, how did you handle things like trademarking, building a website, etc? That seems to be another big road block when trying to start a new business.
Now that your son is back home and your husband is working again, how do you handle working from home while caring for your son? Is he school-aged? I have two children, 2yrs and 1mo than I am home with. At this stage it would cost more money than I would be making out of the gate to put them in day care and my husband is in school long hours. Any suggestions for this?
Thanks again for any insight you can offer!