There are three main things holding the small businesses back in North Carolina, says Gregg Thompson the National Federation of Independent Business (NFIB) in that state. “One is regulations, one is health care and one is taxes.”
Mr. Thompson’s comments were part of a nine-state “Stop the Tidal Wave” anti-regulations campaign recently launched by the NFIB and its new national project, Small Businesses for Sensible Regulations (created one year ago and now with an unimpressive 1,333 members). The effort will include paid advertising and, of course, a lot of fear mongering about how we’re all going to be washed away in a tsunami of federal regulations. Not present regulations mind you. But future, mostly unspecified regulations. Are you scared yet?
To buttress their argument that regulations are the number one problem for small businesses the NFIB cites a February Gallup poll as one demonstrating that “regulatory burdens are a top reason why small businesses are not hiring at pace with previous years.”
But as most polls have shown, regulations are not the reason small businesses are not hiring. It’s the lack of demand.
Even the Gallup poll the NFIB references says that. 76% of the small-business owners Gallop polled who were not hiring said that they do not need any additional employees and 71% said they were worried that sales won’t justify adding employees. “Companies typically hold back on hiring when the economy is weak and when their operating environment is not providing sufficient revenues or cash flows. This appears to be the case right now,” said Dennis Jacobe, chief economist for Gallup.
However, 48% of the business owners not hiring did say they were worried about the potential cost of healthcare and 46% were worried about new government regulations. But these were concerns about something potentially happening in the future, worries ginned up by the NFIB’s relentless politically motivated PR campaign against the Obama Administration. Mr. Jacobe refers to these concerns as “exacerbating an already uncertain and difficult situation.”
In other words, lack of demand is the driver of lack of new jobs, not concern about regulations and healthcare. If it were the latter, no small businesses would be hiring but the truth is that small businesses are leading the new job creation in this country.
When Gallup asked small-business owners why they were hiring new employees, 64% cited increased consumer or business demand and 55% said that sales and revenues justify adding more employees. 7% even cited government tax incentives as the reason (you won’t hear the NFIB talking about that).
So while the NFIB misrepresents the Gallup poll findings, Mr. Jacobe throws cold water on the NFIB bogus claim that small-businesses owners are shaking in their boots over future new regulations. “Right now,” he says, “economic confidence is approaching its highest levels in the last four years. U.S. small-business owners are also about as optimistic about their business and their future hiring as they’ve been at any point during that time.”
This is exactly what the NFIB political machine is afraid of—small business optimism. It must be stopped. Thus their 9-state anti-regulation campaign built on distortion and lies.