NCPA - National Center for Policy Analysis

Small Business Owners Fear Economic Situation

February 20, 2012

A poll conducted by Gallup in mid-January illuminates why companies are not hiring.  Focusing on small businesses, the poll finds that owners have a number of concerns, ranging from the economy to health care costs to idiosyncrasies of their individual businesses, says Politico.

  • Gallup's poll says that 85 percent of the small businesses surveyed indicated that they are currently not looking for new workers.
  • Forty-eight percent of respondents who are not hiring said it was due to concerns about possible rising health care costs.
  • Forty-six percent cited concerns about government regulations as a primary reason for their choice not to hire additional workers.

These poll results suggest that government actions have had a strong effect on small business' hiring decisions.  The poll also found that the aggregate economic climate and concerns about future financial strength also handicapped hiring efforts.

  • Twenty-four percent of respondents that were not hiring said they are holding back from hiring because they are worried about no longer being in business in 12 months.
  • Seventy-one percent of those surveyed said revenues/sales wouldn't justify hiring additional workers.
  • Sixty-six percent expressed worries about the overall economic situation.

The sentiments of small business owners as reflected in the poll support the conclusion that macroeconomic indicators, government actions and factors unique to individual businesses, such as demand for certain products, have all affected hiring decisions.

Source: MJ Lee, "Poll: Small Business Owners Fear Economic Situation," Politico, February 15, 2012.

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