What did Eighteenth and Nineteenth Century Americans do to make ends meet? Most people would agree that they lived off of agriculture. They "lived off the land." Prior to the Industrial Revolution, there were no factories to provide wages and compensation in exchange for labor. Without factories there were no support industries, no transportation. There was no...infrastructure. There were only people working each day to survive by whatever means necessary. There were no grocery stores. There were no convenience stores. There were only families, and those families worked together to provide their own food and shelter.
My father is one of the few that remain of the last generation that could truly define themselves as "self-sufficient." They were living a lifestyle of "sustainability" before sustainability was cool. He has told me stories about his childhood wherein they would only go to the store to buy coffee, sugar, and flour. Everything else they raised themselves. If they wanted meat, they killed it. If they wanted vegetables, they grew them. There was no electricity. Without electricity there was no refrigerator. There was no electric range, no electric oven. Until my grandmother, Lillie, was nearly 70 years old, she cooked on a wood burning stove. It wasn't until the early 1970's that she first had indoor plumbing where, after my grandfather died in 1969, my dad built her a tiny little house in our backyard. That generation, and the ones before them, lived by one foundational principle - You cannot spend that which you do not have. You either knew how to save, or you died. If many of them were alive today to see the waste and excess in American culture, they would likely weep...or laugh.
So what is the fundamental problem we face today? If you watch the news (which I do not unless I'm forced to because it is playing in a restaurant where I can't avoid it) you would believe that National Debt and Deficits, Unemployment, and the Environment are our greatest obstacles. I have a different view. Sure, debt and deficits are unsustainable, but I believe the underlying problem isn't Unemployment. It is employment. Depending on who is manipulating the numbers to make their guy look good and the other guy look bad, we currrently have an employment rate of 88-92%. Notice I didn't say we have UNemployment of 8-12%, but EMPLOYMENT of 88-92%. The majority of "working Americans" are employed. They are by definition, "Employees." What are "employees?" According to the dictionary, an employee is:
"a person working for another person or a business firm for pay."
So what would be the primary focus and motivation of an employee? Certainly it would be to earn money in exchange for services rendered, right? An employee must adhere to company policies and directives, show up on time, perform the required tasks, and then receive compensation for it.
I believe we have lost something along the way. See, back in those early generations, all the way back to the dawn of time, an individual had to know how to save and spend wisely. So in the earliest days of "employment," the average person had a respect for income and expenses. If you were living on a farm, you had no choice but to store up food and supplies for the winter, and then you had to make the provisions last. If you ran out of food before the spring, you were simply out of food until you went out and hunted, or earned, more food. There were no food banks. There was no safety net. If you did not have food, you did not eat. That isn't to say that there wasn't charity. Charity is ingrained in the human psyche. Certainly there were people that would share their bounty with others, but I would guarantee there was some sort of repayment in the form of an exchange of labor. None of us lived then, so we can't know for sure, but I can take from what I have experienced of basic charity and conclude that something of the sort took place.
So where am I going with all this? For two years now, I have been a "contractor." I've been self-employed. I am not an "employee." Since we (my wife and I) made that change, we have changed. We had to change. Life is much different when you are not an employee. There are no company-sponored helath plans. There is no Worker's Compensation. There is no paid time off, paid vacation, or guaranteed paychecks. There are times when I have worked a full week, yet took home no pay. That happened three times last year. Even though I was on the road, working and driving like any other week, when "payday" came, there was nothing there. The expenses that week were greater than what I earned, so there was nothing left over to take home. My last check was on December 27th. I do not plan to receive another one until January 24th. I will receive a Completion Bonus next week at the end of my annual lease, and that will likely be the only money I'll take home unless I catch up on the 24th.
So how do we survive when we don't get paid for three weeks? Answer: Very, very carefully. We had to change. We have had to modify our behavior over the last two years to match the business we are in. Some weeks are good, some weeks are GREAT, and others are really, really bad. We have stumbled along the way. It has taken all of the last two years to learn how to do this. My wife and I are NOT patient people. We are not naturally frugal. It has been the greatest struggle of our lives to learn not only how to succeed, but also to fail with dignity. At the end of the day, we must maximize revenue. That directly translates into how long I stay on the road. If the wheels are moving, I make money. If the wheels are stopped, I am not making money. After that, we have to minimize expenses. After the revenue is earned and the expenses are paid, we get what is left over. We do not have the luxury of saying, "We are going to earn x for doing y." We are going to pay for the truck, the fuel, the insurance, the tolls, and the taxes, and THEN we are going to get paid. Every business operates that way. The owner gets what is left over. It is that direct relationship to the revenue and expenses, the profit and loss, that drives our everyday choices. We no longer have an "employee" mentality.
So you say, "It's stressful and hard. You don't know when and if you're going to get paid. No insurance. No Worker's Comp. No 401 K. How can it be worth it?" In the big picture it is more than worth it. The average company driver with my experience level earns around $0.45 cents per mile. Last year, in my second year of being an Owner/Operator, I earned about $0.70 per mile. I was on the road 320 days to do that, but in the end I earned about $30,000 more in 2012 than I would have as a company driver. That is also AFTER I bought health insurance. That is AFTER I paid the cell phone bill. That is also after paying a $300 per week truck payment. Once I have earned enough money to have a paid-for truck, you can add another $15,000 to my earnings. That $15,000 is 30 less days I have to spend on the road. In reality I will have earned the ability to stay home with my family a whole month while still maintaining my current income. When you are self-employed, there is no ceiling on your ability to earn. At the end of this week I will be moving to a different type of freight where I expect my earnings to increase and much as $40,000. As I look forward into 2013, I expect that we will have tripled our household income in three years.
Let me be very clear - There is absolutely nothing wrong with being an employee. I would never recommend it except maybe for high school and college kids working towards a career. Someone needs to work in factories, and most of those jobs have great pay and benefits to make for the lost freedom of being an employee. What we must not miss is that when you have only ever been an employee, you do not have the first-hand understanding of how profit and loss works. That disconnect is what has caused us to elect the clueless morons that now fill the Chambers of Congress in Washington. Speding in Washington is out of control because our spending at home is out of control. They are a mirror image of us. They do exactly what we beg them to do - spend. The former Senator from West Virginia, the late Robert C. Byrd (D), once said in a speech that the two most common questions he got were "When are you going to balance the budget?" and "Where's my check?" You cannot spend more than you earn and expect long-term security.
We need to break the employee mentality and start to understand that basic mathematics and market principles are unbreakable. You will either work with them, or you are destined to fail. Dave Ramsey often says, "It's not rocket science. Income - outgo = profit." When expenses are greater than revenues, there is no profit. Where there is no profit, there is no business. Without business, there are no employees. It's not an unemployment problem. It's an employment problem.