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5/30/04
Small business
Massachusetts' small businesses are ready to hire, but there are not enough skilled applicants to fill job vacancies. That's one of the findings of a survey released last week of more than 3,600 small companies in New England, including 700 in Massachusetts. Sponsored by Citizens Bank and conducted by the University of Massachusetts' Donahue Institute, the survey reveals small companies are far more optimistic about the economy today than they were in the past year. But they are worried about finding the right workers. In all, 39 percent said they were having difficulty recruiting skilled employees. Michael Goodman, the director of economic and public policy research at the Donahue Institute, attributed the problem to a skills mismatch. ''The areas of the economy where the region expects a boost in the economy are not the same areas where we've lost jobs,'' Goodman said. ''The people who lost jobs are ill prepared for the current opportunities in different growing fields.'' Supplying Massachusetts' healthcare, biotechnology, and financial services sectors with qualified workers was a major concern three years ago when the Massachusetts Institute for a New Commonwealth, also known as MassInc, reported that, overall, one in three workers in the state lacked basic reading, writing, and arithmetic skills. MassInc reported that 280,000 workers in the state were high school dropouts and an additional 195,000 spoke little or no English, factors that had forced both groups into low-wage jobs with no opportunity for advancement. In a separate study, the American Management Association also found that many US workers lacked the basic skills needed for entry level positions in the country's growing business sectors. When the recession began in 2001, however, many employers in New England began focusing on how to survive in a down economy. Now, with the economy bouncing back, small employers are again looking for the skilled workers, Goodman said. ''Four in 10 of the small employers who were looking for workers said they could not find qualified applicants,'' he said. ''That speaks to the need of the state and regional policy makers to provide the opportunities workers will need for future jobs.'' The study also reveals that 34 percent of the region's small firms believe general business conditions will improve over the next six months. Goodman also said New England companies appear to be doing better than their counterparts in other parts of the country. For example, 24 percent of the small businesses here said they planned to hire new workers in the next three months. Nationally, only 14 percent of the respondents to a study by the National Federation of Independent Businesses said they planned to hire workers in the same period. Hal Tovin, group executive vice president at Citizens Bank, said the bank decided to underwrite the study because it wanted to better understand the needs of the region's small companies.
Self-employment Businesses with no paid employees increased by 2.2 million between 1997 and 2002, according to economic data from the US Census Bureau. The federal agency reported that the number of sole proprietorships rose to 17.6 million. In all, nonemployer firms recorded sales or receipts of $770 billion in 2002, up 31 percent over 1997. Most of these businesses were run by individuals. However, some -- about 1.1 million -- are partnerships. An additional 1.2 million are corporations that do not file payroll taxes, the government said. Repairmen, consultants, accountants, and tax preparers are among the kinds of businesses that fall into those three categories. In all, businesses that provide such personal services increased by 523,000, rising to 2.3 million nationwide. By contrast, real estate and rental and leasing services added 483,000 businesses, reaching 1.9 million. Administrative support, waste management, and remediation services grew by 370,000 to nearly 1.3 million, the government said. In some cases, layoffs fueled an increase in the number of workers who became self-employed, especially among workers 55 and over. Challenger, Gray and Christmas, a Chicago outplacement firm, reported this year that the number of US residents 55 and older categorized as self-employed increased 18 percent over the last nine years to 3.01 million by 2003, up from 2.55 million in 1994. The variety of businesses selected by such entrepreneurs ranged from financial consulting to educational services. Those small, educational serives grew briskly: receipts rose to $4.6 billion between 1997 and 2002, up 64 percent, according to the government. It includes tutors, college support services and other educational consulting services. According to the Census Bureau, four economic sectors accounted for more than 50 percent of the $770 billion earned by such establishments last year: real estate rentals, leasing and sales, which reported earnings of $162 billion; construction, which earned $115 billion; professional, scientific and technical services, which earned $96 billion; and retail trade, with a total of $78 billion in earnings.
Education Many of the teenagers and young adults who have summer jobs this year will be saving their earnings for college, according to an online survey of 600 teenagers by SnagAJob.com. The survey of young job seekers found that 22 percent of all of the teenagers responding will use the money they earn this summer for college expenses. Twenty percent said they were saving for a car, 20 percent will use the money to meet daily living expenses, and 19 percent will spend their earnings on ''fun,'' the survey revealed. When the online firm surveyed 19 to 24 year olds it found that 44 percent would use the funds to pay for living expenses, up from 8 percent last year. Of those teenagers who were 16 to 18 years old, however, 27 percent intend to save their summer earnings for college this year. By contrast, 24 percent want to use their earnings to buy a car. Younger teens under the age of 16 plan to spend their earnings on CDs, movie tickets, shopping or dining out. --DIANE E. LEWIS
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