Thud! The national jobs report has landed and it’s not an encouraging sound. Instead of gaining ground on job growth and lowering the unemployment rate, we’re moving backwards. The rounds of self-analysis and blame have begun.
The timing was good for the Jobs for America Summit which I attended earlier this week. It made national news because Jeff Immelt, General Electric CEO and chairman of the Council on Jobs and Competitiveness, addressed the group. The highlight for me, however, was the release of a new small business outlook survey conducted by Harris Interactive.
The survey of small business owners (annual company income of $25 million or less) tracks their attitudes about the impact of the political environment on the business environment and also includes their forecasts for upcoming business and hiring. Most NECA members fit this profile, so I assume it is at least partially reflective of their thoughts and forecasts.
Economists claim that small businesses are the engine for job creation and growth. So what are the hiring forecasts? Nearly 65% said they have no plans to add employees this year and about 15% are reducing their workforce. That means 80% are not hiring and only 20% are creating new jobs.
Why aren’t they hiring? Well, lack of work/orders/sales is the primary reason, but what’s behind the stagnation? The number one reason cited by small business owners is economic uncertainty. And the causes of economic uncertainty are the federal debt and deficit, regulations coming out of Washington, tax rates and tax code changes, and the requirements of the healthcare bill.
While small business owners are by nature an optimistic group, only 39% said that their own business’s best days are ahead of them. And an even more sobering number is that only 20% believe that the country’s best days are ahead.
While the debt and deficit are now the top agenda items for Congress and the White House, it doesn’t seem that our government leaders are doing much to confront the other causes of economic uncertainty. And until the uncertainty is resolved, it doesn’t look like small businesses will grow and create new jobs. Expect another thud next month.