Gallup: 85% of small businesses not hiring because of the impending cost of Obamacare

Behind the curtain of lies and deception associated with Obamacare emerges the fact that government control of health care is the biggest job killer in history. According to a Gallup poll, 85% of small businesses are not hiring because of the higher health care costs and government regulations that will result from Obamacare. This is especially devastating when considering that small businesses generated 65% of all new jobs over the last 17 years (Small Business Administration).

POSTED AT 1:55 PM ON FEBRUARY 15, 2012 BY ED MORRISSEY

Gallup polled small-business owners (value under $20M) about their expansion plans in early January, which for some strange reason didn’t get reported until today.  Among those who do not plan to hire — 85% of the entire sample — almost half of all such businesses cited expected costs from health care coverage and government regulation:

U.S. small-business owners who aren’t hiring — 85% of those surveyed — are most likely to say the reasons they are not doing so include not needing additional employees; worries about weak business conditions, including revenues; cash flow; and the overall U.S. economy. Additionally, nearly half of small-business owners point to potential healthcare costs (48%) and government regulations (46%) as reasons. One in four are not hiring because they worry they may not be in business in 12 months.

Remember all of those hiring tax credits Obama included in his stimulus bill and in his proposals in the State of the Union speech?  What kind of impact did they have on hiring plans among the 15% of businesses looking to expand?  Not much:

Small-business owners who are currently hiring are most likely to say they are doing so because their business operations expanded, consumer or business demand increased, sales and revenues justify adding more employees, and they need to replace an employee who left. Thirteen percent of owners point to their ability to get new capital, while 7% indicate they were influenced by government tax incentives.

Seven percent of a subset of 15% think Obama’s economic plans have helped them.  Forty-six percent of a subset of 85% think Obama’s regulations hurt them.  What does that say about Obama’s policies?  Small businesses are looking at this administration and seeing hostility and costly interference rather than a partner for long-term investment — and for very good reasons, one might add.

Respondents could choose multiple reasons in the survey, and the two most cited reasons for non-expansion are a lack of need for more employees and a lack of sales volume to justify hiring, which are of course related.  Coming in a close third at 66% are worries over the status of the economy, which probably comes rationally from seeing the lack of demand that would allow these businesses to grow.  Considering that small businesses of this class are the engine of job creation, this signals that we will not see any rapid expansion of employment in the near term, much as the CBO predicted last month.  It’s a vote of no-confidence from the innovators and risk-takers that drive our economy.

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Because employees will have to be covered on the employers' health insurance plan, they won't hire?

This is absurd. If demand rises to the level where they need to hire employees, they will hire employees, and if there are higher costs associated with hiring them, they'll pass them through to consumers. Of course, we shouldn't forget that providing health insurance to those employees comes with a nice fat tax subsidy for those employers as well, and if they're small employers, that comes as a dollar-for-dollar tax credit reduction to tax liability, which makes it even more attractive.

That's the economic truth, whether you believe it or not. There's another truth, too. What employers seem to be struggling with is the reality of the very real moral obligation they take on in exchange for that health coverage. After all, there is an escape hatch for every employer. They can terminate all coverage to all employees, pay the penalty for not covering them, and send them all out to exchanges, or they can decide certain classes of employees will not be covered. Their only risk, of course, is that those employees will qualify for subsidized premium credits on the exchanges, which will trigger a penalty to the employer to cover part of the cost of the subsidy. That is a fixed cost, it's not all that onerous, but of course, it's not tax-preferred. They can choose to pay a penalty capped at $2,000-$3,000, or they can cover that employee, with some exceptions.

I don't know what sector of business you work in or how much work experience you have under your belt, but employers have been decrying the cost of covering employees with health insurance for decades. Where have you been?? It's why older workers (over 45 or so) are eased out during periodic layoffs. And it MOST CERTAINLY is why new employees are not added to companies' employee rolls.

In the massive layoffs of the mid-1980's, I can assure you that Owens-Illinois and Owens-Corning and LOF had their corporate eyes on how much they were saving in health care costs by laying off so many. It was discussed all the time back then, and pretty openly I might add. So what happened to the work these employees had done? Did the demand for these services just disappear? Noooo.... the remaining employees shouldered that work - 2 for the price of one. Ask any former (or still current) support staffer from any of these corporations who lived through it.

Every aspect of Obamacare is unconstitutional and oppressive. So don't worry too much about "exchanges". The Republicans will overturn this monstrosity legislation before it has a chance to really destroy this country.

To the point, healthcare costs were expensive before Romneycare Obamacare and will be expensive is it’s ever over turned. The poll doesn’t sight anything about Obamacare.

"if there are higher costs associated with hiring them, they'll pass them through to consumers"

Sensor, with all due respect, you just don't understand this part of economics. If those small businesses could have raised prices to what the market would bear, they would have done so. Profit-seeking is constant.

Shifting conditions mean that the price point also shifts, constantly, but that's the first approximation. Therefore the idea that all added expenses are just passed along, is fairly silly.

Of course, the larger problem remains: Small businesses are being suppressed strongly by the planned weakness of the economy combined with ever voracious government. It's not just Obamacare's impending doom costs; those are a factor, but currently small. What's really the problem is that nationwide economic activity is still highly artificial, and was put into suspension (in the lifting sense, not the cessation sense) by massive government borrowing that put the previous centuries of borrowing to shame. That Keynesian crapola is lifting up the wrong people for the wrong reasons, and is putting more pressure on the people who don't deserve it. A generational catastrophe is progressing, and it just gets larger and larger. When this tsunami of failure reaches our core of small businesses, they will fail in large numbers, within a period of 2-3 years.

So if you think what's happened now is bad, just wait until you see 1 out of every 4 small businesses in Toledo fail, in a short period of time. The noobs will see a lot of stuff being auctioned off, and if they have money, they will be in hog heaven. But wiser heads will know the real social cost. People like myself enjoy a cheap product every now and then, but it the true cost is having unemployment around 20%, then it's too high a social cost, and we should put a stop to what's causing it.

P.S. And I say all that as direct beneficiary of the woes of others. I'm attending storage auctions with a partner and we're buyin' up the misfortunes of others at dimes on the dollar. It's good money made, so far, and it promises to get even better, since a lot of the people bidding against us just don't have the money we have. But I'd rather have a better future for everyone, and not take such large profits from the misery of others. We need modest jobs in large numbers, far less government and low living expenses.

Is there a link to this poll? After searching the cut and paste job above, all I could find was this:

http://www.gallup.com/poll/152516/Small-Business-Hiring-Intentions-Best-...

But I don't see health care mentioned anywhere...

Pink Slip

You mean this Gallup poll?

“According to a Gallup poll, 85% of small businesses are not hiring because of the higher health care costs and government regulations that will result from Obamacare.”

The poll doesn’t say that and you “sir” are a liar and should be referred to as such at every opportunity.

http://www.gallup.com/poll/152654/Health-Costs-Gov-Regulations-Curb-Smal...

Let’s look at what the poll really says. Crazy I know!

PRINCETON, NJ -- U.S. small-business owners who aren't hiring -- 85% of those surveyed -- are most likely to say the reasons they are not doing so include not needing additional employees; worries about weak business conditions, including revenues; cash flow; and the overall U.S. economy. Additionally, nearly half of small-business owners point to potential healthcare costs (48%) and government regulations (46%) as reasons. One in four are not hiring because they worry they may not be in business in 12 months.

Galt is a liar

85% my ass! The Gallup poll doesn’t mention Obama at all or any specific piece of regulation. Run, don’t crawl, back under the rock from where you came!

but it doesn't take an expert pollster to interpret what "Worried about the POTENTIAL cost of health care" means.

Most employers know how much health care is going to cost them if they hire someone today, tomorrow or next month. What they don't know is how much it is going to cost them under Obamacare. But why take my word for it:

  • Mike Whalen, CEO of Heart of America Group, which runs hotels and restaurants, said that when he asked his company’s health insurance experts to summarize the impact of Obamacare, “the three of them kind of looked at each other and said, ‘We’ve gone to seminar after seminar, and, Mike, we can’t tell you.’ I think that just kind of sums up the uncertainty.”
  • Brad Anderson, CEO of Best Buy, added that Obamacare makes it impossible to achieve even basic certainty about future personnel costs: “If I was trying to get you to fund a new business I had started and you asked me what my payroll was going to be three years from now per employee, if I went to the deepest specialist in the industry, he can’t tell me what it’s actually going to cost, let alone what I’m going to be responsible for.”
  • Is Obamacare Stopping Businesses From Hiring?

So while you may be correct that Obamacare isn't mentioned directly, not recognizing it is being implied in the response is plain foolish.

I call BS, your stretching...

Companies have been worrying about healthcare costs long before Romneycare Obamacare. As a matter of fact. healthcare costs have risen at about twice the rate of inflation over the last decade and that has nothing to do with Obama.

Hiring is about supply and demand. As long as there is no demand for a company’s product or services, companies won’t be hiring. My company is hiring like made, because business is good and we need the employees to keep up.

Also, if the morons that the Best Buy CEO surrounds himself with can’t figure out what his employee costs are going to be because of Obamacare. Simply have them look at Massachusetts where Romneycare has implemented. It’s virtually the same thing.

the fact that small businesses stating they are worried about potential heatlh care costs is just a politically correct way of saying "we're going to hold off on hiring for the moment to see how badly we get screwed by Obamacare." No worries though right? We can just forget about that whole 85% of small business won't be hiring thing because if your company is hiring there couldn't possibly be any issues. We'll also ignore what the Fortune 500 CEOs are saying and just wait for you to enlighten us with what your "Republican" friends are saying?

As for your continued references to Romneycare, just what exactly are you trolling for? I don't recall seeing any hardcore Romney supporters on SB lately who would get worked up by the association. In fact, I'm pretty sure that many of us on the right probably think that Romneycare was a bad idea as well. And if Romneycare and Obamacare are "Virually the same thing", why would you collectivist morons be celebrating the implementation of a program on a national level that didn't work on when it was just one state?

Yeah, that was rhetorical. There's nothing you liberals love more than exploding the size of the dependent class.

I call Galt's entire copy and paste premise BS. The poll clearly shows the bulk (76%) of those aren't hiring is because "they don't need additional employees at this time".

You try to spin this anyway you want, but Galt is liar and you're trying your best to spin cover for him.

with your willful ignorance towards the leviathan that is Obamacare and it's influence on this poll. And please spare me the half-witted Romneycare response unless you can somehow prove that this poll was limited to only employers in Massachusetts.

Dear lord--you Obama robots are a full-time job!

Here's a link to the article:

http://hotair.com/archives/2012/02/15/gallup-85-of-small-businesses-not-...

You copy and paste the same wrong shit and you accuse me of not thinking! The poll DOES NOT say "85% OF SMALL BUSINESSES NOT HIRING BECAUSE OF THE IMPENDING COST OF OBAMACARE". It doesn't even mention Obamacare or any piece of regulation that Obama implemented.

You're a liar, go back under your rock.

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