LA Times: Small Businesses Still Looking for a Seat at the Table

Friday, 08 Mar 2013 08:01 AM

By John Morgan

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The stock market may have hit a record high, but the nation’s small businesses are far from euphoric — their lagging performance, along with a sharp decrease in the number of new start-ups, are big factors in tepid employment growth, according to the Los Angeles Times.

The newspaper painted a portrait of American small businesses that are still held back by weak sales and uncertainty over tax and government policies.

Since the jobs recovery began in February 2010, employment at larger companies — those with 1,000 or more workers — has increased more than 8 percent, according to Automatic Data Processing and Moody’s Analytics.

Editor's Note: The Final Turning Predicted for America. See Proof.

But for companies with fewer than 20 employees, job growth has been only 3.4 percent during the same time, the Times reported.

Champ Land, owner of 26-employee Troutman Chair Co. in Troutman, N.C., said there’s a disconnect between Wall Street’s success and Main Street’s continued struggles.

“Small-town America is not feeling it,” he said of the better economy and increasing stock market.

Small businesses are often referred to as America’s “engine of growth” because they make up the bulk of the nation’s employment.

The Federal Reserve estimates loan demand from small businesses is increasing, but credit remains tight, according to the Times.

Citigroup researchers said firms with 500 or more employees account for two-thirds of U.S. exports, and that a weaker dollar “systematically raises large-firm employment relative to that of small firms.”

Citigroup concluded that the “small firm sector is under substantial stress.”

The National Federation of Independent Business (NFIB) explained that healthcare taxes called for under Obamacare would reduce profit and could stagnate growth or force contractions in businesses all over the country.

In testimony before the House Ways and Means Committee, Hugh Joyce, an NFIB member and owner of a small heating and air conditioning firm in Richmond, Va., said, “I am convinced that fear coupled with uncertainty, new costs and frustration regarding the healthcare law is a key reason we are not seeing robust hiring and job creation today.”

Forbes reported that small businesses would be among the first groups to be harmed by sequestration.

The IRS this week sent out a notice that a healthcare credit for small businesses would be trimmed by 8.7 percent because of sequestration, according to Forbes.

Editor's Note:
The Final Turning Predicted for America. See Proof.

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