WASHINGTON – More than any other concern,taxes and health-care costs are corroding the morale of small businesses,a new Gallup poll found.
At 54 percent,most small-business owners identified health-care costs as damaging their work environment “a lot,” while 53 percent said the same about taxes. Uneasiness over energy prices,government regulations and the federal debt ceiling ranked between 40 and 47 percent.
Health insurance costs for small businesses have risen 103 percent in the last decade,outpacing wages and inflation,according to Cynthia Magnuson,spokeswoman for the advocacy group,National Federation of Independent Business.
Gallup’s findings are consistent with past NFIB studies,which reflect many of the same results and pinpoint soaring insurance costs as the top fear for small businesses over the last 25 years.
“Only between 40 and 50 percent of small-business owners are actually able to provide it because the costs are so prohibitive,” Magnuson said. “Any action that state and federal governments have taken hasn’t seemed to rein that in.”
Business owners’ fears can translate into hiring less often and reducing employee hours to remain exempt from certain parts of laws,especially the Affordable Care Act,President Barack Obama’s health-care legislation.
It remains unclear what the overall impact of the law will be on small businesses,Dennis Jacobe,chief economist at Gallup,said.
Gallup’s study doesn’t comment on whether the president’s health-care legislation is good or bad,just that business owners are concerned about it and that they say it’s impeding job growth,Jacobe said.
Fears over health-care costs and high tax rates stem from the fact that both issues are debated so frequently and fervently on Capitol Hill,Jacobe said. Implementing and adjusting to the new health-care law has also been the root of a great deal of apprehension.
“The rules are changing,” Jacobe said. “It’s on people’s minds because other people are discussing these issues. And because it’s affecting their lives directly.”
Even with a profusion of issues to juggle,most small business owners are more optimistic now than they were in November. The Wells Fargo/Gallup Small Business Index asks businesses to rate their current financial situations and expectations for the next year.
In January,the index stood at 9,a significant increase from minus 11 in November. Before the recession,index scores were usually at or above 100,according to Gallup.
“People need to be aware of the issues that are inhibiting job growth,” Jacobe said. “There’s a potential for small businesses to start hiring again,we just ought to address any of the issues that we can.”
Gallup conducted telephone interviews of 601 small-business owners from Jan. 7 to 11. A small business was defined as having $20 million or less in revenues or sales. The margin of error is plus or minus 4 percentage points.
Reach reporter Amer Taleb at [email protected] or 202-326-9867. SHFWire stories are free to any news organization that gives the reporter a byline and credits the SHFWire.