Optimism of small business owners remained flat in November at 53%, according to a new scorecard by SurePayroll, the leading online payroll service for small businesses with less than 100 employees. That's fairly good news after optimism rebounded by 20% in October from an all-time low of 33% in September.
The report, which measures the current health of small business in America, also showed hiring was down from October, but wages on the other hand did tick up slightly. Still both remain down 3% and 0.5% year-to-date, respectively.
Small businesses make up 99.7% of all employer firms and employ more than half of private sector workers in this country, according to the U.S. Small Business Administration, which describes a small business as having fewer than 500 employees.
SurePayroll President and CEO Michael Alter joined The Daily Ticker's Aaron Task to discuss these findings. He is optimistic himself that "the state of small business is coming off the bottom," citing two key factors in the report that signal a recovery may be in the making: 1) rising wages and 2) stable optimism.
Before employers begin to hire again, "the first thing we are going to see is actually the wage index go up of the average paycheck because [employers] are going to bring their existing workers back up to full employment or a little bit of overtime before they hire," Alter explains.
As for optimism, it is now moving in the right direction again after falling drastically first in July to 47% and then again in September to just one in three business owners hopeful about the future. "I am hopeful that this optimism will turn into action in the next 60 to 90 days," says Alter.
Small Business vs. Obamacare
While 53% of small business owners are optimistic about the state of the economy and the health of their business, one must not forget roughly the same amount of are just as pessimistic. Alter says most of SurePayroll customers describe themselves as "cautiously optimistic" and that sentiment rests heavily upon what happens in Washington.
Next year one of the biggest factors to impact the decisions made by small businesses is the Supreme Court's ruling over the constitutionality of Obama's health care law, according to SurePayroll's November scorecard. By a ratio of 2 to 1, the small business owners surveyed are hopeful the Supreme Court finds the health care legislation unconstitutional. If that were to happen, hiring and wages would likely see a boost, says Alter.
Another big factor to impact small businesses is whether Congress will act to extend the employee payroll tax credit and if so, who will have to foot the bill. Passing an extension would provide many Americans with an extra $1000 dollars in discretionary spending, which would be good for business, says Alter. But, if it is businesses who have to cover the expense of that credit, that would certainly hurt hiring and wages.
Regardless of these outcomes, certainty is the key to running a smooth business, says Alter. "[Getting] out of maybe land is much better than right now sitting in maybe land," he says.