Small businesses won't provide new jobs: U.S. survey

Economic uncertainty biggest obstacle to hiring new workers
By Patricia Zengerle
|hrreporter.com|Last Updated: 07/13/2011

WASHINGTON (Reuters) United States policymakers seeking an answer to the country's stubbornly high unemployment rate should not expect relief from small businesses, said a survey released by a powerful business lobbying group.

Almost two-thirds 64 per cent of companies with income of US$25 million or less do not plan to hire more workers over the next year, the poll conducted for the U.S. Chamber of Commerce said.

Nineteen per cent said they planned to add new employees, but only 12 per cent said they expected to lose workers in the next year. That figure is well below the 29 per cent who said they lost employees over the past year, according to the survey conducted by Harris Interactive which polled 1,409 small business owners.

Economic uncertainty was the biggest, or second biggest, obstacle to hiring more workers for 55 per cent of the respondents. Some 34 pe rcent cited an expected lack of sales as the first or second reason.

Other reasons cited included the U.S. debt and deficit, President Barack Obama's 2010 health-care measure, over-regulation and high taxes.

The Chamber of Commerce last month launched a campaign against what it called the Democratic president's "avalanche" of new regulations and warned they were costing American jobs.

Obama's hopes for re-election in 2012 will depend heavily on the state of the U.S. economy especially the jobless rate. The chamber makes the vast majority of its political donations to Republican candidates.

Small businesses are traditionally the engine of U.S. jobs growth. The government says small businesses those with 500 or fewer employees employ about one-half of all private sector workers. U.S. unemployment has been stuck at about nine per cent for months as the country struggles to emerge from economic recession.

Jobs growth had ground to a near halt in the U.S. in June as employers hired the fewest workers in nine months. Non-farm payrolls rose only 18,000, and the national unemployment rate climbed to a six-month high of 9.2 per cent.

Eighty-four per cent of the small business owners surveyed said the U.S. economy is on the wrong track, and nearly 80 per cent said they viewed the current regulatory environment as unreasonable.

However, almost two-thirds of the respondents said their own businesses were on the right track.

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