9/26/2012

Some news on the Economy: Small businesses angry with Obama and low wage jobs replacing higher paid ones

The National Federation of Independent Businesses and the National Association of Manufacturers has a new poll by Public Opinion Strategies that surveyed 800 small business owners and manufacturers.  Those surveyed were C-level decision makers at companies with between 2 and 499 employees.  Some of the key findings are:

  • Fifty-five percent of small business owners and manufacturers would not have started their businesses in today’s economy.
  • 69 percent say President Obama’s regulatory policies have hurt their businesses
  • 67 percent say there is too much uncertainty in the market today to expand, grow or hire new workers.
  • 69 percent of small business owners and manufacturers say President Obama’s Executive Branch and regulatory policies have hurt American small businesses and manufacturers.
  • 55 percent say they would not start a business today given what they know now and in the current environment.
  • 54 percent say other countries like China and India are more supportive of their small businesses and manufacturers than the United States.
  • Since only 46 percent of poll participants are identified as Republicans, there are a lot of Democratic or Independent small business owners who are not to thrilled with Obama.
  • The findings were summarized this way:
    “There is far too much uncertainty, too many burdensome regulations and too few policymakers willing to put aside their egos and fulfill their responsibilities to the American people,” said Jay Timmons, president of the National Association of Manufacturers, which commissioned the poll along with the National Federation of Independent Businesses. “To fix this problem, we need immediate action on pro-growth tax and regulatory policies that put manufacturers in the United States in a position to compete and succeed in an ever-more competitive global economy.” . . . 
    “Instead of smoothing the way, our government continues to erect more barriers to growth through burdensome regulations that increase costs for small businesses and all Americans,” NFIB president Dan Danner said. . . .
    More evidence that the new jobs are paying a lot less than the ones that were lost.  From the Chicago Sun Times:
    The report, authored by Marc Doussard, assistant professor in the University of Illinois at Urbana-Champaign’s Department of Urban and Regional Planning, defines low-wage workers as those making $12 an hour or less. 
    The report revealed the share of payroll employees ages 18 to 64 working in low-wage jobs rose from 23.8 percent in 2001 to 31.2 percent last year. That’s a more than a 30 percent rise in the proportion of such workers. 
    Meanwhile the share of households with a low-wage earner that got all income from low-wage earnings rose from 45.7 percent to 56.7 percent. That’s evidence more people are relying more on those dollars to meet basic needs rather than for disposable income. . . . .
    CEOs are lowering their predictions for the third quarter GDP.
    Citing uncertainty over the impending “fiscal cliff” and lower demand overseas, an association of CEOs from top companies on Wednesday dropped its growth expectations for the third quarter to the lowest level since the middle of the Great Recession. 
    The Business Roundtable lowered projections for sales, capital spending and hiring in its latest CEO Economic Outlook Survey to the lowest level since 2009. 
    The fiscal cliff — an end-of-the-year deadline for a long-term budget deal between Republican and Democratic lawmakers — has businesses putting off hiring and spending decisions, because they don’t know what to expect in the coming months and years, said Jim McNerney, the CEO of Boeing who also heads the Business Roundtable. . . . 
    Of course, the Q2 GDP number is now in at 1.254% annualized growth rate.  That is incredibly anemic for a "recovery" and shows that over the last few quarters the economy has been slowing down.  Durable goods orders has also fallen off a cliff (see the Dept of Commerce discussion here).
    August durable goods orders plunged -13 percent.  The consensus was  -5.0 percent.  It's the biggest drop since January 2009.  Everyting except eletrical equipment orders showed declines. . . . 
    More on the drop in household income:
    o The August 2012 median annual household income of $50,678 was 5.7percent lower than the median of $53,718 in June 2009, the end of therecent recession and beginning of the “economic recovery.”
    o The August 2012 median was 8.1 percent lower than the median of $55,131 in December 2007, the beginning month of the recession that occurred more than four years ago.
    o The August 2012 median was 9.0 percent lower than the median of $55,688 in January 2000, the beginning of this statistical series. . . . 

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