Small Businesses Won't Hire Until the Government Has Their Back

A new Gallup poll released today casts some dark clouds over the relatively bright stream of economic data we've been getting for the past few months -- according to the poll, fully 85 percent of small businesses say they are not currently looking to hire any new employees.

The amazing thing is how completely consistent their reasons are for holding back on new hires: 71 percent say they are "worried revenues or sales won't justify adding new employees," 66 percent say they are "worried about the current status of the U.S. economy," and 53 percent say they are "worried about cash flow or the ability to make payroll."

Revenues, sales, cashflow, payroll -- these all point to one thing: suppressed consumer demand. But don't take my word for it, just ask small business owners themselves. Of the 15 percent of small businesses who said they are planning on making new hires, 64 percent of them attributed this to "increased consumer or business demand," which was the most frequently cited response along with "expanding business operations."

But what about tax cuts or hiring incentives, surely those could have some effect? Definitely -- for a grand total of 7 percent of small businesses. 

Basically this poll is another confirmation of what we've been saying for a long time now: We are not going to make a real dent in the unemployment rate without the aggressive stimulus measures that are needed to dramatically boost demand. And by now you are familiar with our line-up: a direct-hire public jobs program to get Americans working right away, funding for infrastructure to boost private investment, and a slew of reforms to make new jobs good jobs and put more money in workers' pockets to spend, like strengthening labor rights and raising the minimum wage.

Unfortunately, it seems like we'll be spending the rest of the year debating about how much to cut from the budget rather than how much to invest in job creation, and folks on the right in particular are going to say that an austerity agenda is good for small businesses. Maybe they should actually talk to small businesses before they "defend" their interests.