Jobs outlook for small businesses may be getting bleaker

More evidence that the focus on "too big to fail" is wrong

latimes.com
Jobs outlook for small businesses may be getting bleaker
A payroll services firm says employers with no more than 19 workers made fewer hires in July than in any month since October. Those companies usually drive the unemployment rate down.
By Sharon Bernstein, Los Angeles Times

July 9, 2010



For the recovery to gain steam, most economists believe small businesses need to be strong enough to hire new workers. But according to one measure, the employment picture in this sector is weakening.

Intuit Inc., which provides payroll services for small employers, says the nation's tiniest companies had fewer new hires last month than any time since October.

The data are further evidence of a trend that has had many economists worried for months and intensifies concerns that smaller firms may not be robust enough to help lead the country out of its financial slump. The slowdown in hiring is particularly troublesome, experts say, because small businesses typically hire first during a recovery. A reluctance by little companies to add positions could mean that the big firms, which typically lag behind, will add jobs even more gradually.

"It's a bad sign," said Susan Woodward, an economist who tracks small business employment for Intuit. "Small businesses hire first — and they're losing their steam."


http://www.latimes.com/business/la-fi-0709-smallbiz-slowdown-20100709,0,1513075.story

Drive buy one day, they are open, a few days later there is a For Rent sign in the window.

Our town used to have a robust small business population. Now there are so few left, it looks like an entirely different town. For Rent signs everywhere. These businesses will not come back, perhaps some brave soul will try something else in the spot but that is doubtful.

The only ones that seen to be growing are the hairdressers and nail salons. I don't understand why we have so many but if they are doing well, more power to them.

Many residents leave town to find the discount stores. Not that the stores here are not good, just that the out of town stores offer lower prices. I am, sorry to have to admit, one of those who goes out of town. I am severely limited in resources so I go to a discount grocery. I buy so little else that I would not make a difference anyway.

How sad this is.

Small businesses (and bigger ones) need to know what what to expect. I've run a couple and worked in a few others making less money than I would somewhere else, but I liked the environment. The paperwork is a pain. And as you get more employees it gets worse. And if you supply/contract for a big company you may need to follow the same regulations and paperwork as them.

But the worst part about growing is when you don't know the real cost of that employee or after-tax revenue you will make in upcoming years. Small business owners do not want to fire people because of money problems - employees are more like family than co-workers. Look at the situation we are in when you consider the cost of an employee you hire today in 2-3 years:

* unknown effect from health insurance reform (could save money by canceling insurance and paying the fine but that's probably not fair to employees)
* unknown tax increases (call it removing the Bush cuts if you want but next year may be more taxes than this year)
* unknown energy tax & reporting
* unknown 1099 paperwork changes included in the health reform (they are known but hopefully will be removed because they will be a painful amount of extra work)
* unknown other regulations (I'm not as worried but many owners are scared of what the "socialists" may do so it is a real problem. Regulations are a pain and many don't make sense for a lot of businesses they cover)

A lot of things need to get settled quick. Get the health reform lawsuits accelerated. Get the Bush tax cuts settled (remove, don't remove, set the income level, etc). Pass the energy bill (or say it's done for X years). Put a freeze on regulations for small businesses. Make it clear what help small businesses do/don't get on health reform - the numbers I've seen don't look nearly as good as the explanation sounds.

We are stretched to the breaking point just keeping on our current employees. It's sad but we are looking at ways to downsize without having to fire anyone.

The weird thing is that although there are "for rent" signs for commercial property popping up like daisies in the springtime around here, our current lease negotiations are going south. Our current landlord is adament that we pay a significant raise in rent or almost 25% more. This during a time when building maintenance is a thing of the past.

So I am looking at sublease options. We'd love to stay but if it comes to keeping our current location or keeping our employees I vote for our employees.

The thing that kills me is that economists KNOW that small business drive the economy and yet the stimulus bill has done NOTHING for main street but has bailed out the big investment banks and other corporations at a 100% rate. That just pisses me off. Main street is being deliberately ignored and I think I know why.

The rich have created a fire sale and are snatching up property and material and other tangible assets at pennies on the dollar. They lost one of their houses and they don't care because they have other places to live and other resources to fall back on. My family has this one small business and if it goes under we are homeless. Our house is, like many, underwater. Trust me, if I had another house or 2 to fall back on I would walk away in a NYC minute.

Okay............

Translating into sales for small business owners.

There were no big projects, no influx of state and federal money running into my county. The road improvements with the stimulus signs were already funded by the state. They just shifted the money around so they wouldn't have to cut as much spending. It might have saved some public sector jobs but the private sector wasn't "saved", we just had our local taxes jacked up to maintain the status quo.

Just for starters. I can't afford to "donate" any more unpaid hours to the government, I need that time to actually work in the business. The nimrods in congress don't seem to understand that what looks good on paper when applied to Wal Mart or AT&T can be crippling for a small business.

Uncertainty is the biggest factor for most of us now. We aren't seeing signs of an improved economy, just more work and expense for us.

The county has been eliminating jobs for the last 2 years. The school districts are entering the second round of riffs. Conservative, older voters are going to fail two bond levies this fall and that will trigger another round of public employee layoffs. The people being laid off are in their earning prime, and most of their wages were spent in the local economy. Many are leaving. Kids especially are a dwindling resource around here. Local businesses are being hit hard by all of this and there's no end in sight.

The cost of Healthcare is going up 5 times faster than inflation.

Companies will not hire people over 40 for fear their "Premiums" will be effected.

We need Medicare for all ... then watch the job market take off.

If only we had leadership with a "Vision".....