POLL: Uncertainty Holding Back Hiring

Jul 16, 2012

Small business owners’ concerns about the future—particularly on health care and taxes-—are impacting their hiring, according to the U.S. Chamber’s fifth quarterly small business survey released today.

Only one in five small businesses (20%) expect to add employees in 2013, according to the poll of 1,225 small business owners, conducted by Harris Interactive. The majority of small businesses say they are likely to keep the same number of employees over the next year – meaning there is likely to be little change in overall unemployment figures.

Following the Supreme Court’s decision on the President’s health care law, only 3% of small business owners report that the Supreme Court’s decision to uphold the law will make them more likely to hire new employees. Seventy-two percent said the health care law will make it harder for them to hire.  When asked about the impact, several respondents said they will scale back their workforce to avoid triggering the employer mandate.

“Washington’s policies are not meeting our country’s fiscal challenges and are prolonging uncertainty among small businesses,” said Dr. Martin Regalia, the Chamber’s chief economist. “Washington can restore confidence for small businesses in this country by addressing the fiscal cliff, removing regulatory barriers, increasing energy production, and starting over on bipartisan health care legislation.”

Some additional findings from the survey:

  • 78% want government to get out of the way.
  • 90% are concerned about the impending fiscal cliff and are worried that Congress will fail to take action to prevent it.
  • Nearly 60% say that expiration of the 2001 and 2003 tax rates and other business provisions, coupled with sequestration, will directly impact their business’ growth.

There is a bright spot in the survey, however. Small businesses’ outlook on their local economy has dramatically improved, with twice as many small business leaders saying the economy is headed in the right direction today compared to one year ago. In July 2011, 27% of small business owners reported that their local economy was headed in the right direction, compared to today.

Small business owners also show confidence in their own enterprises – nearly seven-out-of-ten (68%) say their business is headed in the right direction.

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