As the presidential debates continue this month, job creation has been a big topic in the debates so far. But what’s really happening with small-business job creation, and how confident do small-business owners feel about the future?
Hiring Mostly Down, Contractor-Hiring Up
The most recent SurePayroll Small Business Scorecard for September found ho-hum news. Month over month, hiring was down 0.2 percent in September, and the average small-business paycheck was flat. Hiring was down month-over-month in every part of the country except for the South, where it was flat. While paychecks were up month-over-month in the Midwest (0.5 percent) and South (0.1 percent), they declined everywhere else.
Year-over-year, the trends are equally uninspiring: Hiring is down 1.5 percent nationwide, and paychecks are down 1.2 percent. The picture is best in the South, where hiring is up 1.2 percent, and worst in the West, where hiring declined 5.0 percent. Another growth area overall: Use of independent contractors continues its steady rise, with 6.49 percent of paychecks involving 1099s.
A Few Bright Spots
The September Intuit Small Business Index paints a slightly more optimistic picture. That study found a 0.2 percent employment increase over August 2012, or 40,000 new jobs created. Nationwide, small-business employees also enjoyed a 0.6 percent increase in compensation, and were working 0.18 percent more hours (perhaps a sign of retailers ramping up for the holiday shopping season).
Overall, Intuit’s survey of businesses with fewer than 20 employees shows that both hiring and compensation have risen fairly steadily since hitting a low in October 2009. Since then, 800,000 new jobs have been created in small businesses.
While that’s more positive than SurePayroll’s results, 0.2 percent growth is still nothing to jump up and down about. What’s holding small-business owners back from hiring? SurePayroll’s survey offers a clue. In September, the percentage of small-business owners describing themselves as “optimistic” plummeted to 45 percent—down from 60 percent in August. “When small-business owners are not optimistic, they're not investing and they're not hiring,” says SurePayroll CEO and president Michael Alter.
With 77 percent of small-business owners in the SurePayroll survey reporting that the election is affecting how they feel about the U.S. small-business economy, I think we’ve found the culprit behind the pessimism. Whether it’s the overall negativity that comes with any election season, worry that their candidate won’t be elected, or simply the anxiety that comes with hearing our nation’s political problems discussed again and again, small-business owners are being pushed to a low point.
Economic policy and tax policy are the two biggest factors influencing how small-business owners will vote, followed by healthcare, the national debt and foreign policy. How will these issues shake out? We’ll know after November 4—and I’m curious to see how the election results affect small-business owners’ attitudes (and hiring plans) going forward.
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