Does Self-Employment Work Like a Dream?

Enough has been said to show the opportunities that exist, the general lines that must be followed, and the risks that must be faced if you want to set up on your own. But there is one more question that is worth asking: Why do you want to set up on your own rather than seek a job as a wage or salary earner?

In answering that question there are two important considerations. Whenever we Americans get into one of our frequent discussions on what is wrong with agriculture, someone is sure to pop up and assert that “Farming isn’t merely a way of earning a livelihood. It’s a way of life as well.” He will then probably go starry-eyed and sentimental about the virtues of rustic existence.

The same sort of thing might happen in a discussion of small businesses—and no one would deny that there is a degree of truth in the distinction between livelihood and life. When an old man looks back on his working life he may well consider how much money he has earned or made. He may then survey the sort of life he has led or, by the nature of his job, has been forced to lead in making or earning it. Has it been a dreary humdrum existence? Did it ever challenge his skill, ingenuity, resourcefulness, and courage? Did he get a lot of fun out of it? Did he have to keep his nose so close to the grindstone that he never had time to look at or think about anything else? Did it leave him with time and energy to spare for leisure and with capacity for enjoying that leisure? What sort of view did his work give him of human beings in general? Can he feel that he has contributed something to the building up of his community and country, or has he been merely a passenger, a parasite? Will his neighbors miss him and will St. Peter give him a hearty welcome?

The unattractive side

At first glance you might be disposed to think that all the fun in life depended on working for yourself. Being your own boss may have a powerful attraction. But for a time—and perhaps for all the time—it is likely to mean very long hours. Before and after you open your door to the customers, there are countless jobs to be done—buying your stock, setting it out, making up the books, planning changes, fixing up the advertisements, sending out the checks and the accounts, doing endless paper work, and so on. Your wife and youngsters may have to be drafted unduly. If your kind of business does not require a lot of capital, you may have a lot of rivals, and in the end you may go under.

True, you may achieve success, your business may become quite large, and you may make a substantial income. You may be able to take vacations and go to conventions and you may gain an honored social position in your community—in social, church, and civic affairs. But hard work, long hours, and risk of failure are inescapable preludes, and the first ten years may be the hardest.

Or do you want to be a wage earner after all?

If you decide in favor of a wage or salary job, the ceiling may be lower, but the floor may be higher and the effort less strenuous. During the last ten years wage earning conditions have been greatly improved by the growth of labor unions, the spread of collective bargaining, and the development of government policies concerning wages, hours, and social security.

The salary earner has benefited less than the wage earner. But in his case there are more opportunities for promotion to higher grades of employment and pay, and in the large corporations the openings for interesting scientific, technical, and managerial work are not likely to diminish.

There is plenty of monotonous and physically exhausting wage work, though there is some of it in all occupations, whether it be on an assembly line, practicing the piano, or marking examination papers. But the wage earner can leave his job and its worries behind him when he quits work for the day, which is more than most small businessmen can do. The highest possible wage may be less than the earnings of a successful small business. The fear of unemployment or of losing earning capacity as one gets old has to be taken into account as he counterpart of the businessman’s risk of failure. But while there is no way of insuring against the latter, unions and social security schemes have greatly reduced the lag of wages behind prices and lessened the fear that there will be no income when work ceases to be available. The wage earner may not climb up the social ladder into the American middle class. He may never become a member of a lunch club, town and country club, or chamber of commerce. But the growing interest of labor unions in political and social questions may give him as much outlet for his public interests as he cares to have.

There is a niche and a need

Thus the decision between employing yourself and becoming an employee is one that cannot be made by following a cut and dried set of rules. It must be made by each one of you after weighing a great variety of personal factors as well as a lot of general economic and social considerations. In this pamphlet the emphasis has been placed on the obstacles to be overcome and the requirements to be met. No one should start up a business on the theory that it works the same as a daydream.

It is to be hoped, however, that many of you will stick to your determination to launch out on your own account. A healthy society needs businesses of all sizes and must provide opportunities for all kinds of endeavor. American enterprise could not all be small scale without lapsing back to primitive simple life. If, on the other hand, it were all in the hands of giant corporations, we might have an economic despotism alongside our political democracy—and the despots would rule the democracy.

Fortunately there is little fear or prospect of such a condition so long as small- and middle-sized businesses do their job efficiently. Governments can help them to do it, and our deep-rooted political traditions have always insisted that the little fellow must be helped—and even protected if necessary, since he is a vital part of our American society.

As a people we like bigness when it means efficiency in accomplishment. We dislike it if it threatens to use its power to crush or injure the small. When monopolies threatened the way of life of many of our people we passed the antitrust laws. When chain stores and other amalgamations were sweeping the country in the 1920’s, we grew worried concerning their possible effect on established conditions and classes. In the 1930’s many states passed laws imposing taxes on chain stores.

It is safe to assume that we shall not desert this helpful and protective attitude toward small business in the years ahead. But small business must justify our belief in it by doing its job ever better and better. Otherwise it has no more justification for survival than; had the stagecoach, the peddler, and the sailing ship.