Bad news bears: Small business owners’ pessimism bad for America

The NFIB Small Business Optimism Index is down sharply this month. Entrepreneurs have been an essential part of every past recovery.  If they are not optimistic they are not going to hire more workers, buy inventory or increase spending.

|
Amanda Renko/The Daily Review/AP
In this June 2012 file photo, Jack Henry Barrett, 8, is seen operating Jack Frost Ice in Teaoga Square in Athens, Pa. Jack Henry, who opened the cart with the help of his father, is happy about his business prospects, but newly released numbers show other entrepreneurs are not so optimistic.

The word out today on the mood of entrepreneurs in the US and it is not at all encouraging.  The NFIB Small Business Optimism Index is down sharply this month.

And who can blame them!

Unemployment remains high and shows to positive growth.  Don’t be fooled by the “80,000 new jobs” spin.  Due to our population growth in this country we need at least 130,000 new jobs each month just to break even with the added people coming into the workforce.  Without jobs, people are not spending.  And without spending in our economy, there is no reason for entrepreneurs to become aggressive again and get into a growth mode.

The President is drawing a line in the sand insisting on increasing taxes for those earning over $250,000 a year.  Many who fall into this proposed tax increase are entrepreneurs.  We know that for every 1% increase in the marginal tax rate that we can expect a 1.5 to 2.0% decrease in start-up activity.  Remember that this announcement came after the survey from the NFIB that showed a sour mood among business owners.

And then there is the new healthcare model about to roll forward in this country.  Many small business owners are paralyzed by the implications of this law.  I have had a couple of friends estimate the costs for their small businesses and it is tens of thousands of dollars for even a modest sized payroll.  Obamacare will lead to a huge decrease in employment in small business as it is implemented over the next two years.  (By the way, most of what we are hearing from the Republicans is only lip service, so we should all plan for it to move ahead).

So we can see why small business owners are in a foul mood.  A weak consumer base, increasing taxes, and increasing labor costs are not going to spur entrepreneurs to help lead the economic recovery.

So why should we care?

Entrepreneurs have led every past recovery.  If they are not optimistic they are not going to hire more workers, buy more inventory and increase capital spending.

This economy is dead in the water and we are doing everything wrong when it comes to helping those who can help rebuild economic growth.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Bad news bears: Small business owners’ pessimism bad for America
Read this article in
https://www.csmonitor.com/Business/The-Entrepreneurial-Mind/2012/0710/Bad-news-bears-Small-business-owners-pessimism-bad-for-America
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe