President Obama has received a lot of flak for failing to create jobs. He is expected to pitch a national job training program during his big jobs speech tomorrow.
Meanwhile, small businesses credited with creating 58,000 of the 91,000 new private sector jobs in August are struggling to get government funding.
Year-to-date hiring by small businesses is down 2.6%, while paycheck's have declined 0.3%, according to SurePayRoll's 2011 small business scorecard. The survey which collects data from 32,000 customers and looks at the smallest businesses across 35 cities, found that cities like St. Louis bucked the trend. We spoke with Michael Alter CEO of SurePayRoll about his findings and what he expects for small businesses in the coming year.
BI: Based on the scorecard, what are individual cities doing right or wrong?
A lot of these are very local. Our data includes small businesses and contractors. In cities where you see growth, contractors are higher and are doing more to create jobs. In St. Louis we've seem month-over-month and year-over-year growth which is a good sign but small businesses aren't sure whether they should be hiring full time employees because they are getting new orders, so you see them take on contractors but the paychecks may go down.
There are 5 stages really first small businesses reduce work hours, then they layoff workers and both indices go negative. Then they come back and increase work hours and overtime, then they start to bring in contractors and finally start hiring permanent employees again.
The challenge is we've been hovering from the bad stage to stage 3 and aren't moving up from there.
BI: Do you think the burden to help small businesses should fall on the federal or state/local governments?
The burden should really be on all of them. Small business owners are not discerning on where they get the funding, they just want access to it. We survey small business owners on economic prospects. Now, only 1 in 2 is optimistic i.e. 1 in 2 in pessimistic, and 2 in 2 has given up belief in any government help. One of the small business owners we have said "I choose to be optimistic about the future, not clueless". There is a lot uncertainty about what the government might or might not do.
BI: Small businesses are adding more jobs than big firms but even they have been cutting down on jobs. Do you see a similar trend in the future?
I expect to see reduction in hiring. The ADP report overstates larger companies and understates smaller companies. Until optimism picks up I see this trend continuing. If a business owner is optimistic he may add a second delivery truck, if he is pessimistic he won't because he doesn't want people hunkering him down.
BI: What do you expect from President Obama's job speech on Thursday?
Government programs that provide short-term and long-term funding and reduce paperwork and allow more Small Business Administration (SBA), quicker. Maybe a reduction in corporate tax rate. I would like to see an infrastructure bank set-up for small businesses. Coming out of past recessions, small businesses have got us out of it. Earlier SB owners could max-out their credit cards, 401K, borrow from friends and family. Now banks are cutting down on credit, gyrations in the stock market affecting 401K there isn't much to borrow and getting a second mortgage on a home is pretty tough. These ways of bootstrapping aren't there anymore and the government needs to step in.
BI: Additional thoughts?
If you look forward we continue to bounce at the bottom. The challenge is that small business productivity has been growing at a rate greater than their revenues. Thus, others are more stable because a number of existing businesses are able to increase their revenues without adding additional employees (revenue growth at lower cost). But that doesn't put us back to work.
View the original article here
This post was made using the
Auto Blogging Software from
WebMagnates.org This line will not appear when posts are made after activating the software to full version.
Image: Image: AP
Image: ap
Mexican president Felipe Calderon on Friday declared three days of mourning after two dozen gunmen burst into the Casino Royale in Monterey Mexico Thursday, doused the building with fuel and set the structure ablaze trapping dozens of people inside.