Washington gridlock, worries about the recovery, causing big problems for small businesses looking to hire

Updated

President Obama is warning Congress the economy could be dealt a severe setback if lawmakers don’t take steps to avoid the sequester—that’s when a series of steep, automatic spending cuts go into effect.

A recent survey from Gallup shows more small businesses slashed jobs in the past year, and the outlook for the year ahead is far from robust. Seventeen percent of owners plan to add jobs in the coming year, while 12% plan to cut jobs, for a net gain of 5%.

JJ Ramberg, host of msnbc’s Your Business, tells Jansing & Co. that small business experts she talks to say their hiring outlook is “grim” and “cautiously optimistic”. “If you do not know what the economy is going to look like you’re not going to invest right now,” said Ramberg.

Ramberg says worries about health care costs and the cost of complying with regulations have also kept hiring in check. The Gallup survey also found that nearly one in three small business owners say difficulty in finding qualified workers has also kept them from adding staff.

While most small businesses are making slow progress, Ramberg says Silicon Valley companies are thriving. “It is an entirely different world. Hiring there is up to pre-recession level, internet boom level and because of that, other sectors—not just tech—are doing well because people now have money. So places like construction is doing well there.”

Improvement in small business hiring is crucial. The Small Business Administration says 65%of the net new jobs in the past 17 years have been generated by small businesses.

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Washington gridlock, worries about the recovery, causing big problems for small businesses looking to hire

Updated