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The June SurePayroll Small Business Scorecard is a bit of déjà vu, looking similar to last month. While wages inched up just a sliver this month, bringing us to -0.1 percent for the year, hiring stayed put at -2.3 percent for the year.

What swung enough to have me take notice was our small business optimism number. Last month I reported that it skyrocketed to 75 percent – three in four business owners reporting that they were optimistic about the small business economy was fantastic news. But we’ve lost some momentum in June. Now two in three are optimistic, and I was very curious why the change in sentiment.

In looking over the reasons business owners gave for being pessimistic, the biggest pool had to do with frustration with the government, including its inaction. “The political environment,” “uncertain tax policy,” “failure to address over-regulation, job creation, and keeping business in the US,” and “I see no major changes by our governing bodies to improve the situation at hand,” are just a few.

I’ve said it before, but I believe it bears repeating – no action is the worst decision, as it produces uncertainty.  Not everyone will agree on which way to take our policies, but the unknown is the scariest place to be. Small business owners are waiting for the government gridlock to end. They want the government to make decisions on a variety of issues, including the debt ceiling, spending and taxes.  Without certainty on direction, you have more business owners who are frozen and frustrated. 

Mind you, more small business owners are optimistic about the economy than pessimistic, most saying the reason being that they’re growing or that they simply choose to be positive. But I’d hate to see us go back down to April’s near 50% optimism level, and I think one way to keep it higher is for the federal government to take action and create certainty.

Last updated: Jul 1, 2011

MICHAEL ALTER | Columnist | President of SurePayroll

Michael Alter is president of SurePayroll, America?s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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