Gallup: 85% of small businesses not hiring

posted at 1:55 pm on February 15, 2012 by Ed Morrissey

Gallup polled small-business owners (value under $20M) about their expansion plans in early January, which for some strange reason didn’t get reported until today.  Among those who do not plan to hire — 85% of the entire sample — almost half of all such businesses cited expected costs from health care coverage and government regulation:

U.S. small-business owners who aren’t hiring — 85% of those surveyed — are most likely to say the reasons they are not doing so include not needing additional employees; worries about weak business conditions, including revenues; cash flow; and the overall U.S. economy. Additionally, nearly half of small-business owners point to potential healthcare costs (48%) and government regulations (46%) as reasons. One in four are not hiring because they worry they may not be in business in 12 months.

Remember all of those hiring tax credits Obama included in his stimulus bill and in his proposals in the State of the Union speech?  What kind of impact did they have on hiring plans among the 15% of businesses looking to expand?  Not much:

Small-business owners who are currently hiring are most likely to say they are doing so because their business operations expanded, consumer or business demand increased, sales and revenues justify adding more employees, and they need to replace an employee who left. Thirteen percent of owners point to their ability to get new capital, while 7% indicate they were influenced by government tax incentives.

Seven percent of a subset of 15% think Obama’s economic plans have helped them.  Forty-six percent of a subset of 85% think Obama’s regulations hurt them.  What does that say about Obama’s policies?  Small businesses are looking at this administration and seeing hostility and costly interference rather than a partner for long-term investment — and for very good reasons, one might add.

Respondents could choose multiple reasons in the survey, and the two most cited reasons for non-expansion are a lack of need for more employees and a lack of sales volume to justify hiring, which are of course related.  Coming in a close third at 66% are worries over the status of the economy, which probably comes rationally from seeing the lack of demand that would allow these businesses to grow.  Considering that small businesses of this class are the engine of job creation, this signals that we will not see any rapid expansion of employment in the near term, much as the CBO predicted last month.  It’s a vote of no-confidence from the innovators and risk-takers that drive our economy.

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If government is going to be arbiter of fair and lawful competition, long as RICO, monopoly, and other LARGE laws aren’t being violated, then government is WAY too large.

Liam on May 21, 2013 at 8:44 PM

The real question, of course, is why DC — and other cities like it — even have so much innovation- and freedom-crushing red tape

How else are the bureaucrats going to keep the bribe money coming?

malclave on May 21, 2013 at 8:48 PM

How else are the bureaucrats going to keep the bribe money coming?

malclave on May 21, 2013 at 8:48 PM

That pretty much covers the topic.

Liam on May 21, 2013 at 8:53 PM

How do you pronounce this: womp

Whoomp (as in Whoomp, there it is)? Wahmp (rhymes with pomp)? something else?

cptacek on May 21, 2013 at 8:59 PM

Uber is a FANTASTIC company… naturally, it and the innovation it represents would be antithetical to the current oppressive environment this crony-based government has spawned…

dpduq on May 21, 2013 at 9:03 PM

simply provide customers with the option of hailing a taxi with a smartphone app is being put through the ringer in the nation’s capitol, too.

I hate to throw the grammar Nazi flag, but the word I bolded above should be wringer.

Gator Country on May 21, 2013 at 9:13 PM

How do you pronounce this: womp

Whoomp (as in Whoomp, there it is)? Wahmp (rhymes with pomp)? something else?

cptacek on May 21, 2013 at 8:59 PM

Woah! Erika’s quite the womp rat!

KS Rex on May 21, 2013 at 9:44 PM

Wringer is a ringer for “ringer”

Now if you’ll excuse, I have clothes to dry.

wolly4321 on May 21, 2013 at 9:45 PM

The real question, of course, is why DC — and other cities like it — even have so much innovation- and freedom-crushing red tape

And then those cities wonder out loud why they continually suffer ‘brain drains’ when the best and brightest flee for greener pastures.

It’s not rocket surgery.

Myron Falwell on May 21, 2013 at 9:56 PM

The real question, of course, is why DC — and other cities like it — even have so much innovation- and freedom-crushing red tape that diverts so much of what could otherwise be everybody’s profitable time and resources into fighting for permission to operate and completely legitimate and highly efficient business that creates real jobs and improves people’s lives. You’d think that small businesses daring to threaten the established order were doing something illicit, what with all the hoops they have to jump through these days — and that is no way to grow any kind of economy, be it on a micro- or macro-level.

Just like the medieval guilds, the purpose is to protect the existing businesses from aggressive competition.

And yes, this undermines the whole free enterprise system. Fortunately, the startups just view it as one more obstacle to get past, and manage anyway. But it’s still a waste of time and money.

There Goes the Neighborhood on May 22, 2013 at 10:26 AM

Had the opportunity to use Uber’s sedan service in L.A. a few weeks ago.

As soon as the service was ordered I knew that my car was 4 minutes away. I watched on the screen as it got closer and closer. When it hit 1 minute, I saw a black sedan on the opposite side of the street signaling to make a u-turn.

Contrast this with a year earlier when I called for a taxi in order to make the exact same trip. I was told that they were busy but they’d have someone there in 10 minutes. 15 minutes later I called and was told that someone would be there in 10 minutes. Another 15 minutes later I called and was told dispatch had sent someone and if they weren’t there in 5 minutes I should give them another call. 10 minutes after that I flagged down a passing cab and they got my business instead.

The Uber sedan service was $90 with tip. The taxi was $110 with tip.

If Uber wants to extend their business into the taxi realm (and they plan to keep the same level of service), it’s nothing but a boon to the residents of the cities they are operating in.

JadeNYU on May 22, 2013 at 11:02 AM

But Uber argues that the the taxi regulations issued last week, which go into effect June 1, would require it to link its payment system to the payment providers integrated into the new meters that taxis will begin installing this summer.

Wonder how much the preferred payment providers are paying DC?

unclesmrgol on May 22, 2013 at 11:43 AM