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Small businesses won't provide new jobs: survey

Reuters News
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Posted: Jul 11, 2011 3:24 PM
Small businesses won't provide new jobs: survey

By Patricia Zengerle

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

Almost two-thirds -- 64 percent -- of companies with income of $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 percent said they planned to add new employees, but only 12 percent said they expected to lose workers in the next year. That figure is well below the 29 percent who said they lost employees over the past year, according to the survey conducted by Harris Interactive for the Chamber.

Economic uncertainty was the biggest, or second biggest, obstacle to hiring more workers for 55 percent of the respondents. Some 34 percent 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 healthcare 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 half of all private sector workers. U.S. unemployment has been stuck at about 9 percent for months as the country struggles to emerge from economic recession.

On Friday the U.S. Department of Labor announced that jobs growth had ground to a near halt in June as employers hired the fewest workers in nine months. Nonfarm payrolls rose only 18,000, and the national unemployment rate climbed to a six-month high of 9.2 percent.

Eighty-four percent of the small business owners surveyed said the U.S. economy is on the wrong track, and nearly 80 percent 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.

The survey conducted by Harris Interactive polled 1,409 small business owners and executives representing members of the Chamber of Commerce and non-members. It was conducted June 27-June 30 and had a sampling error rate of 2.5 percentage points.

(Editing by Xavier Briand)