No one gets rich working for someone else. It’s an adage of American culture that tends to be true.
Wages don’t often lead to the millions of dollars so many seek. It is the owning, in part or whole, of commodities and businesses that leads to real wealth. When entrepreneurship and investment in an economy suffers, that economy will stagnate commensurately.
The effects of not having an entrepreneurial spirit are being felt in France, where an unpopular job law is being fiercely protested. The law, which translates into English as the first-job contract, diminishes job security by allowing employers to fire any employee under the age of 26 for any reason within their first two years of employment.
The law does not intend to maliciously undermine job security, but to make more jobs available by decreasing the risks assumed by employers when hiring employees. While job security is something most people want, it must be weighed against the fact that businesses must be able to expand or contract in response to the demands of the market. In France, unemployment is high, topping 50 percent in some areas, but employee assurances are extravagant. The protestors seem to be saying they would prefer to be unemployed, provided those with jobs cannot be fired. It’s a questionable, depressing decision that stems from a society with too much reliance on government handouts and an overemphasis on employment security that will guarantee unemployment for many.
It’s also a decision from which things can be learned. In the United States, where poverty is taboo, dependence is especially undesirable. The French economy, through its plethora of mistakes, holds lessons for the United States.
The big lesson is that empowerment in the form of financial independence must be achieved in some way in order to have an independent and prosperous populace. Minorities are generally considered to be the least empowered in the United States. Conservatives sympathize with minority groups for being stuck in a welfare state, and liberals do the same for being victims of discrimination. The empowered rarely garner any sympathy, no matter how valid it may be.
Therefore, it was with a happy heart that I read a report released by the Census Bureau on Tuesday stating Hispanics are opening businesses at a rate that is three times the national average. Hispanic-owned businesses generated $222 billion in 2002, up 19 percent from 1997. One-fourth of the nearly 1.6 million Hispanic-owned businesses nationwide were opened during the same period of time. Nothing empowers people like entrepreneurship.
It’s not a trend that’s likely to go away anytime soon. The five years between 1997 and 2002 were not uniformly spectacular years for entrepreneurs or the U.S. economy in general. In 1999, venture capital commitments from investors and corporations jumped 111 percent from the year before. In 2001 and 2002, however, the amount of money available dropped drastically. At the end of 2002, the amount of venture capital money available was only $7.7 billion, a scarcity not seen since 1994.
Therefore, the five-year period during which these significant gains were made in Hispanic business ownership had its share of scarcity, but the entrepreneurs endured nevertheless. Warren Buffett, the third wealthiest man in the world who has built his wealth by investing in other companies through his company, Berkshire Hathaway, has said, “You don’t know who’s swimming naked until the tide goes out.” The trend of Hispanics increasingly owning businesses is clearly not comprised of business owners swimming in the buff.
The Census Bureau data regarding entrepreneurial activity in the same five years among blacks will not be released until later this year. Even when that data is released, however, the effects of Hurricane Katrina, which devastated black businesses, will not be included. While the effects of Katrina were tragic – one-fifth of Black Enterprise magazine’s top 100 black-owned businesses were affected – they present an opportunity to make a lot of money for a lot of people. While New Orleans Mayor Ray Nagin’s comments about “a chocolate city” were misguided, it’s a fact that black entrepreneurs are imperative to the rebuilding of New Orleans. The contrary would be quite unfair and lead to the disempowerment and hostility that so often causes disastrous outcomes such as dependence.
For France, disaster has already occurred.
Unemployment is rampant and a mindset of entitlement persists. If the powerful French unions do not manage to overturn the first-job contract, they may go on a general strike, which would paralyze France’s economy. If they get what they demand, two million Frenchmen, desperate for jobs, will continue to be unemployed. Even if the first-job contract proposal is held up, it may or may not help a French economy that has been suffering for a long time under a leftist, socialist ideology.
With a little luck, hard work and fair-mindedness, Americans can avoid the same dilemma.
Jordan Capobianco is a senior majoring in English literature.