The Underreported Joys of a Jobless Recovery
In 1999, after a minor fender bender near his Hallbrook home, 38 year- old Phil Steer climbed out of his BMW and fell over dead from a massive coronary.
The BMW, like the Hallbrook digs, derived from Phil's vision as an entrepreneur. His financial acumen had helped Video Post Productions, then nicely housed in a Plaza high-rise, emerge as the preeminent video production facility in this part of the world. At the time of his death, Video Post employed some 30 people, all of whom attended Steer's funeral.
By early 2003, alas, Jackson County sheriffs had padlocked Video Post's doors and sold off the remaining equipment at auction. Estate squabbles, an ill-starred management transition, and a down economy seemingly led to its demise.
Worse, at least on the surface, no more than three of the thirty or so staff found employment with established companies. On paper at least, this led to a net "job loss" for Missouri of more than 25 jobs. Other companies across Missouri and America were undergoing similar transitions and piling up similar losses. As measured by traditional payroll surveys, the Video Post phenomenon contributed to the so-called "jobless recovery." The GNP soars, while job growth staggers.
Yet despite the presumed "joblessness" something weird has been happening--the unemployment rate continues to fall. As measured by the Labor Department's monthly survey of 60,000 households--the traditional unemployment gauge--unemployment in America has dropped at last count to 5.6%. To put this figure in perspective, Bill Clinton ran for reelection proudly in 1996 on an unemployment rate of 5.5%. The household survey, in fact, now boasts of a record 138 million jobs in the U.S.
In an election year, however, not everyone wants to boast. The party out of power would rather gripe, specifically about the payroll survey. This survey, in fact, measures only 130 million jobs. Given the nonny-nonny-boo-boo spirit of this year's primary campaigns, the eight million job shortfall strikes some as just another big fat lie by those big fat stinky lying liars now in power.
Revolution
To cut the name-calling and clear up this complex paradox, I should mention one more factor in the decline of Video Post, a major one--namely, the revolution in video production. Curiously enough, the revolution began in Topeka. There, about a dozen or so years ago, a wonder- fully outlandish company named New Tek created the so-called Video Toaster. The Toaster basically did for video production what the PC did for computing: it brought the once elaborate and expensive editing process to the desktop.
As fate would have it, I wrote and produced the initial marketing video for the Toaster. So hot was the Toaster that Tom Brokaw featured the video--aptly titled "Revolution"--on the NBC Nightly News.
Predictably, fame and fortune went right to the heads of the boy geniuses who created the Toaster, at least the loopier ones. After failing in a campaign to bring nude dancing to town, they decided Topeka was way too sane for their tastes and took their high wire act to zanier precincts. But the revolution was indeed on. New Tek and other outfits quickly improved on the Toaster and added the inevitable "cool new stuff" to boot.
Today, as a result of this revolution, a video entrepreneur no longer needs a large staff and millions of dollars of high-end equipment to produce national quality video. If he is clever enough, he can do it at home. In truth, there were a lot of clever people at Video Post. As the company dissolved, a remarkably high percentage of them decided to get their own gear and go into business for themselves. And no, not one among them joined the ranks of the "permanently discouraged." (Seriously now, has anyone ever?).
Best estimates suggest that Video Post spawned no fewer than ten distinct video-related offspring. The names of these start-ups--Outpost Broadcasting, Wide Awake Films, Stark Raving Solutions, Barnstorming Inc., Wish Creative Group, Big Sky Digital--suggest their break with a Plaza-based corporate model. The largest of the siblings, Outpost, has six total staff, four of whom are principals. The smallest are sole proprietorships, most of which are home-based. In what is truly an astounding transition, a business model that featured one majority owner and 30 wage-earning grunts yielded at least 20 freshly minted entrepreneurs.
As scary as freedom can sometimes be, none of the newly sprung are looking back. "It's a wonderful feeling to know that every day you will be doing something totally different," says Ed Leydecker one of the three principals of Wide Awake Films. That "different" thing might be staging the nation's largest Civil War reenactment at Spotsylvania or sweeping the floor of his River Market office.
Kelly Creech runs Big Sky Digital out of his southern Johnson County home. Like the folks at Wide Awake, he relishes the freedom of choosing "the kinds of projects that are important to me." He and the others all bring a level of intelligence and experience to their work that simply can't be reproduced and repackaged in, say, India. Having their jobs sent offshore is not among their worries.
Just the opposite in fact. Mike Wunsch and his colleagues from Outpost are taking their expertise, among other places, to Latin America for which market are they shooting a major Spanish language soap opera. Wunsch, who ran the technical side of Video Post, shares that sense of liberation that comes with getting out of the office. "I have spent more time with a camera on my shoulder than I have in years," he says with a genuine sense of relief.
What has aided liberation for many of them is marriage. Having a spouse with a steady job and benefits eases a lot of anxiety. The transition has also brought them closer to their families, often literally. After all, it is a short commute to one's basement. Then too, no one needs to ask permission any more to pick a kid up after school or go see him play soccer. No one needs to ask permission--period. "I'm working just as hard," said Creech, "but my life is just so much more organic."
The Mountain Comes to Mohammed
Clients have benefited as much or more from the technological refinements. The production company can now set up a full editing suite in a client's office. Editing costs have dropped nearly in half. Speed and quality have improved as has client control. The drop in prices has put high quality video imagery in the hands of businesses and other organizations that could not have afforded even bad video just a decade back.
The world of video is hardly unique. Comparable technology shifts have increased productivity and lowered costs in one industry after another, especially in the communications field. These changes have also created a burgeoning class of entrepreneurial start-ups, many of which are too small, idiosyncratic, and unincorporated to show up even as "new business" statistics.
Now, you would think this would be welcome news, especially in progressive quarters. After all, who--other than commercial realtors--would not rejoice to see so many wage slaves transformed into masters of their own destinies, high-tech yeomen in a virtual Jeffersonian paradise?
Who? Every other in person in Washington, that's who. Politicos know that those good souls who take real money from their pockets four times a year to pay taxes make mighty ornery taxpayers. They are hard to organize, impossible to unionize, and difficult to bamboozle. Some of these new entrepreneurs will inevitably fail. There are those in power, alas, who hope that all of them do.