Small Business Owners Show Cautious Optimism as Recession Fears Ease, But Face Workforce Challenges with Gen Z

The March edition of the Freedom Economy Index survey found that small business owners have significantly reduced their recession concerns, though they remain cautious about major growth initiatives. The survey, conducted jointly by PublicSquare and RedBalloon from March 15-19, sampled 80,000 small business owners nationwide.

Recession fears showed notable improvement, with 67% of employers believing the U.S. will head into a recession, down from 78% in February and representing the lowest reading in eight months. Despite this positive shift, employers indicated they are maintaining conservative financial strategies, shelving staffing changes and making only essential purchases. PublicSquare CEO Michael Seifert noted that while business owners sense an economic turning point, they remain hesitant to make significant investments until the direction becomes clearer.

The survey revealed significant challenges with Generation Z employees in the workplace. Employers gave Gen Z workers consistently poor ratings across multiple metrics: 68% found them the least reliable employees, 71% identified them as most likely to have workplace mental health issues, and less than 4% said Gen Z aligns with their workplace culture. Additional concerns included 62% reporting Gen Z as most likely to cause workplace division and toxicity, while 57% identified them as posing the highest risk for workplace lawsuits.

RedBalloon CEO Andrew Crapuchettes emphasized the severity of the labor market challenges, stating that the 2024 labor market will be one of the most difficult in decades. With baby boomers retiring in large numbers, the market desperately needs new talent, but Gen Z appears unprepared to meet employer expectations. The reliability crisis extends beyond generational issues, with 70% of employers citing lack of reliability as their top hiring problem, and 60% preferring to operate under-staffed with fewer problems rather than fully staffed with more complications.

Employer stress levels reached concerning heights, with one-quarter of small business owners reporting exhaustion levels at ten out of ten and another 35% at eight or nine. Seifert attributed this stress to economic conditions under the Biden administration, suggesting that small business owners crave stability and positive economic direction. The complete report of the Freedom Economy Index provides additional insights into these workforce and economic challenges.

The survey also revealed sharp divisions among small business owners regarding the proposed TikTok ban legislation in Congress. Thirty-five percent support the ban, while 41% oppose it, with only 2.2% unaware of the issue. RedBalloon Communications Director Isaac Lopez connected these divisions to broader concerns about free speech and government restrictions on social media voices, particularly following pandemic-era and 2020 election-related social media interventions.