Global recession is often thought of as a serious problem or threat considering that it affects an individual’s or a family’s financial capability to maintain their lifestyle. Even if people deny the effects of global recession, some are in an advanced state of panic as people deem their businesses, employment, and plans are over. In reality, the inconveniences and life-changing situations vary depending on where one is geographically located, how much of the business is at stake, and how long the financial crisis lasts. Despite the apparent doom and gloom the situation presents, there is still much that can be done to improve one’s situation. With careful planning and understanding of basic prevention methods, a recession could be an opportunity for employees to upgrade their knowledge and skills, for companies to take stock of their business processes and methods, and for entrepreneurs to start a new business venture. Thus, instead of focusing on the negative aspects of a recession, paying attention to the possible gains it brings about could mean a huge difference to people and businesses.
Prior to the economic meltdown in the late 1920s, people purchased cars and household appliances on credit. They also bought stocks, which they sold for profit later. This system worked as the value of stocks rose higher in the 1920s. However, when the stock market crashed, people found themselves in debt and with no capacity to pay for their previous purchases. As people lost their jobs and demand for household appliances diminished, companies either closed down or laid off employees (“Life During the Great Depression”). During the previous economic crises, for instance, the Great Depression in 1929, “everyone’s lives were changed drastically [as] many people found themselves out of work and searching for a better life” (“Life During the Great Depression”). Because of the situation, many children were forced to stop going to school, suffered from malnutrition, and experienced various kinds of illnesses. For some, they were forced to find employment elsewhere so as to be able to help support their families. While African-Americans have lived in poverty most of their lives, the Great Depression further thrust them into a life of poverty and worse living conditions. As banks foreclosed their lands due to debt, African-Americans were forced to do manual labor in steel mills, railroads, and coal mines. As a result, some of them moved to the West side of America to find lands to till. Black women were forced to work as mammies or domestic helpers for white people in order to help support their families. In general, although some of these women have gone through college, the Great Depression hindered them from finding jobs, thus, were forced to fulfill the role of the homemaker. When money became difficult to come by, some of them were forced to undertake jobs that men normally held (“Life During the Great Depression”).
Hardest hit are the working class people or the middle class considering that they make up about 20 percent of the population at that time. Although men and women strived to complete their education, the Great Depression did not offer opportunities for work. Graduates of degrees such as banking, architecture, education, and sales could not find suitable jobs for themselves. In fact, “a study conducted by the American College Personnel Association showed that 21,974 women and men holding degrees were without jobs” (“Life During the Great Depression”). The study reveals that the middle class almost lost their social and political position in society. Although the middle class experienced the most difficulty, everyone had to make lifestyle changes in order to cope with the situation.
Despite the negative effects of a recession, opportunities also abound. It could be a time to reorganize, develop, and rebuild the business, including its processes. While competitors are busy panicking about their next steps, consumers and businesses continue to find solutions to their problems. The difference is that if they previously had no regard with their finances, this time, they are looking for value for their money. Therefore, businesses that offer consumers value and quality products and services, then it could be an opportunity for the business to thrive and gain despite the recession.
A recession presents several advantages for a business. For instance, during this time, setting up a business could be economical considering that labor and equipment are cheaper than on regular days. Overhead costs would be lower as suppliers would be content on disposing their items than have the items in stock. In terms of manpower, there will be an excess of talent available for the company to choose from. Because of layoffs and fewer job choices, people who have the necessary skills and knowledge about the business would be willing to take on any job just to ensure a regular and steady salary. By hiring the right people at a lower salary than in normal circumstances, a new or existing business can thrive despite the bleak situation. This can also lead to generation of fresh ideas, which could further address the concerns of other companies. If smaller companies are able to provide the services and products needed by another company or business at a cheaper price, then both companies are set to become successful in their mutual arrangement (josephinestaylor 2012).
The recession can also serve as a learning time for start-up businesses to understand their business as well as methods on how to ensure that the company remains financially stable despite austere situations. It could also be a good time to make the company recession-proof and learn lessons from other businesses until the economy becomes stable once again. Companies can start checking their revenue growth against their actual projection, begin strategizing on how to develop and expand the business, and international competition. In case the business was already on its infancy stage by the time the recession hit, those in management could start analyzing whether the company’s performance was on the upswing or not. If it is, then further analysis is required whether the company can sustain its recent success and determine what factors contributed to the success of the business (josephinestaylor 2012).
The recession is another fruitful time to check the financial health of the business considering that because there are lesser number of graduates, those who are in business can push through with business planning and strategizing. The individual who considers this option can either help bring in money to the company or work independently by putting up his or her own company. Doing so eliminates the possibilities of retrenchment due to redundancy at work. In addition, small and medium-sized enterprises (SMEs) are said to be the backbone of a nation’s economy, thus, opening up one during the recession could be a good decision.
During a recession period, there are certain industries that thrive more than other businesses. Some businesses experience minimum profit because of a drop in the demand for goods and services. New employees are generally paid less despite sterling credentials. Still, some experience unemployment issues. Nevertheless, there are some businesses that thrive regardless of the economic situation of a country.
The business of repossession is on top of the list because when an owner falls short of payments for purchases such as vehicles or houses, this is when these people jump in and “repossess” the property. In 2002, for instance, Roos (n.d.) claims that compared with the repossessions that occurred in 2001, repossession was 60 percent more than what happened in the past year, while in 2008, which was the period called the Great Recession, “a total of 1.67 million vehicles were repossessed, a 12 percent increase from the year before” (Roos). In the business of repossession, the worse the recession is, the more active and healthy the business becomes (Infozooms). In line with this business, the junk removal business profits as well because those items and properties that do not have value for repossession are typically left behind (Infozooms).
Repair and Maintenance shops also thrive during recession because people are more hesitant to part ways with their money. As a result, instead of purchasing new vehicles, people would opt to repair their old ones. This goes the same way with furniture and appliances, which can be repaired by handymen. Instead of buying new refrigerators, stoves, or washing machines, among others, people would be more willing to shell out a couple of hundreds for repair than buy the new and more expensive items (Fowler). In addition, because of very uncertain times, car loans are not advisable considering that employment conditions are unstable as well.
A career as an educator is another occupation that essentially has job security, especially if one is employed in public schools. However, to really reap the rewards of being a teacher, one has to go where the demand is. For instance, Roos (n.d.) asserts that the Bureau of Labor Statistics (BLS) projects there will be a “17 percent growth in demand for kindergarten and elementary school teachers from 2010 to 2020” (Roos) despite the economic conditions of America. Even after the recession, there is still an obvious increase in the requirement for teachers as people recognize that an education is what will help individuals improve their financial standing in the future. However, the problem lies in the excess number of general elementary school teachers in 2013 because the need was more for “certified math, science, and special education teachers nationwide” (Roos). Therefore, those who are studying to become teachers must consider that they must choose a specialization subject if they want a guaranteed teaching position.
Those engaged in the vices industry are also said to do well during recession. While it may appear like an irony, people are said to “drown their sorrows and turn to common vices like smoking, drinking and even gambling” (Infozooms) during recession period. Case in point is the occurrence during the Great Depression when cigarette sales increased, just like candy (Roos). As people experience the difference in lifestyle, people do not tend to cut down on vices that provided comfort and happiness to them prior to the recession, but rather, these people downgrade the quality of the products they buy in order to stretch their budget. As an example, Roos (n.d.) points out that in the 2008 economic meltdown, “by the glass” sales went up as compared with wine bottle sales, which was the norm in the past. As a result, people tend to indulge in their favorite vice, but reduce the quality of their purchases. As what the Beer Institute said, “beer sales in restaurants dropped in 2008, while wholesale beer sales from cheaper stores went up” (qtd. in Roos).
Another vice that people indulges in regardless of a recession or not is the tattoo business. Usually, people have tattoos during a recession because the price of getting one is cheaper during that time. In addition, it is an inexpensive way of boosting one’s self-confidence and providing a room for creative expression of the individual. On the other hand, if tattoo services are booming during this period, tattoo removal salons also rake in more than enough money for the business. This is because a recession is an opportunity of tattooed individuals, especially those who have been laid off, to erase their marks in order to look more professional during interview sessions (Infozooms).
Discount manufacturers and stores also benefit during a recession because people who used to buy designer clothing realize that they need to cut down on their expenses and settle for bargain items. Unlike when the economy is doing well, discount stores have no choice but to up the quality of their items, which keeps them from earning well because they have to compete with other stores for excellence of product. However, a recession gives these kinds of stores a chance to recoup their earnings considering that more people will shun designer stores in favor of stores that could help them extend their budget longer. Therefore, during these times, people are more open to “switching to cheaper, inferior goods” (Infozooms). When consumers do not have the capacity to shop anymore, they look for other options in order to get the same enjoyable and contented feeling of being able to treat themselves with material things they like.
In the middle of all these problems, another pressing issue is what the government is doing to help ease the people’s concerns. To assist the affected individuals, the government offers grants to college-level students so they can continue their education and complete a degree without having to pay the amount stated in the grant. The government also extends grant awards to individuals who intend to start their own business ventures. Apart from these grants, the President signed the American Recovery and Reinvestment Act of 2009, which focuses on “retaining jobs, making more jobs and helping the unemployed” (Alex). In all the issues pertaining to the recession, the government sees to it that help is accorded to those in need.
The overall condition of the world’s economy has vastly improved to a point where its status can no longer be classified as recessionary. As unemployment rate is still relatively high, to declare that global recession is over is inaccurate. While in the past this would have sent people into panic mode considering the very bleak future presented by the global economy, the good thing that comes out of the recession is that people are now more conscious about their purchases and financial standing. People have become wise buyers and went back to the basics of simple living. The panic is gone as they recognize that a recession is not entirely a disadvantage considering the various other opportunities it brings to businesses and entrepreneurs.
Works Cited
Alex, Dakotta. “How Is the Government Dealing with the Recession?” examiner.com. 2011. Web. 9 January 2014. <http://www.examiner.com/article/how-is-the-government-dealing-with-the-recession>.
Fowler, Janet. “9 Businesses that Thrive in Recession.” Investopedia. 2011. Web. 9 January 2014. <http://www.investopedia.com/financial-edge/0811/9-businesses-that-thrive-in-recession.aspx>.
Infozooms. “5 Businesses that Benefit from a Recession.” Infozooms. 2010. Web. 9 January 2014. <http://www.infozooms.com/Lists/ListDetails.aspx?rid=434&cid=5>.
Josephinestaylor. “The Best Time to Start a Business is During a Recession.” Gradireland. 2012. Web. 5 January 2014. <http://gradireland.wordpress.com/2012/10/09/the-best-time-to-start-a-business-is-during-a-recession/>.
“Life During the Great Depression.” N.d. Web. 4 January 2014. <http://academic.mu.edu/meissnerd/depression.htm>.
Roos, Dave. “10 Recession-Proof Businesses.” Howstuffworks. N.d. Web. 9 January 2014. <http://money.howstuffworks.com/10-recession-proof-businesses1.htm#page=0>.
