Many of the nation’s smallest employers will head to the polls today feeling discouraged about the future of their businesses and worried about the direction of the economy, and most are disappointed with their options at the top of the ballot.
Small business hiring and optimism indicators often vary based on the source and the exact size of the companies queried. But in the past month, nearly every survey of small business owners has reeked of pessimism and frustration as employers pull back on hiring and brace for continued uncertainty even after the elections.
The Hartford’s latest study, for instance, showed that two-thirds of small business owners do not plan to hire in the coming year, and more are now focused on simply maintaining employment and revenue rather than pursuing growth. Days earlier, American Express OPEN reported that the number of business owners planning to add employees fell from 35 percent to 29 percent this fall.
Recent surveys by SurePayroll, Intuit and the National Federation of Independent Business reiterated the same trend, painting a picture of small businesses that are either stuck in a holding pattern or shedding workers.
“The small business community isn’t placing any bets right now and it’s no wonder in this uncertain economic environment,” SurePayroll CEO and President Michael Alter said. “Hopefully the election results will provide enough clarity around future fiscal and government policies which will spur small business to play their hiring and investment cards.”
But dismal hiring numbers aren’t the only source of frustration. Small business employees are getting paid slightly less, owners are more stressed about their finances, borrowing is tapering off, and most believe their taxes are going to rise next year – though predicting by exactly how much remains virtually impossible.
“Owners are in maintenance mode, spending only where necessary and not hiring, expanding or ordering more inventories until the future become more ‘certain,’” NFIB Chief Economist Bill Dunkelberg said in the group’s most recent report on hiring expectations.
More broadly, the state of the national economy remains a serious concern, and according to several reports, most business owners believe the country is still heading in the wrong direction. And while small employers haven’t been particularly impressed with either presidential candidate, their grim forecasts pose a greater threat to President Obama’s reelection chances, which hinge largely on how well he has convinced voters that the economic recovery is accelerating.
The final pre-election unemployment figures added fuel to Obama’s closing argument, and critical sectors like housing and manufacturing have shown signs of life in recent months. But small businesses employ more than half of the country’s workforce — so if owners and their employees haven’t bought into the turnaround, the president may struggle to recapture the White House on Tuesday.