Health law not swaying hiring

Ohio firms worry more about spending cuts’ harm to economy

10/2/2013

Few small and midsize Ohio employers plan to add full-time jobs in the next six months, but most say the Affordable Care Act has no impact on their plans to hire.

Just 17 percent of Ohio business owners say they expect to bring aboard new workers in the next six months, while 73 percent figure to maintain staffing, according to findings from a PNC Bank Economic Outlook survey that was released today.

The same questionnaire found that while business owners commonly cited generic worries over government regulation as one of their top challenges, they’re more concerned about sequestration than the Affordable Care Act, also known as Obamacare.

PNC said 48 percent of respondents believe the $85 billion worth of automatic federal spending cuts has had, or will have, a negative impact on the U.S. economic recovery.

Those surveyed reported less trepidation — at this point at least — over the health-care act. Of those surveyed, 27 percent said the controversial health care law had negatively affected their hiring plans, while 63 percent said it had no impact.

Nationally, 78 percent of employers said the act has had no impact on their hiring plans.

Kurt Rankin, a Pittsburgh-based economist with PNC, said those numbers could increase going into 2015 when the mandate kicks in that companies with 50 or more employees provide workers with affordable health care or pay a penalty.

Still, Mr. Rankin does not believe the law will have any lasting significant effect on small business.

“All in all, the Affordable Care Act is not going to dampen small business over the long-term. Small businesses are going to find a way to account for this. Hiring may be slower than it might have been, but if consumers start rushing through a small business’ door, they’re going to hire to meet that need,” he said.

The bigger problem right now for small and midsize businesses — and by extension, the economy — is that consumers still aren’t terribly confident about spending money.

“Consumer spending has been slower coming out of a recession than it usually is,” Mr. Rankin said. “Businesses are making money. They just don’t have demand that leads to more hiring at this point.”

Still, business owners seem to have marginally more optimistic outlooks now than they did six months ago.

PNC found 36 percent of owners expect higher profits in the coming six months, versus 33 percent in April. Ninety percent of business owners believe sales will hold steady or increase in the coming six months, versus 87 percent in April.

Those who say they will hire also is up slightly. In April, 14 percent said they expected to hire versus the 17 percent now.

While that figure seems low, it actually is slightly better than the 16 percent of national employers that PNC said expect to add jobs.

It also compares favorably with some of Ohio’s neighbors. Mr. Rankin said just 4 percent of small to midsize Michigan business owners and 6 percent in Pennsylvania reported plans to hire in the next six months. Indiana was on par with the national average at 16 percent.

Nationally, PNC found 60 percent of employers are optimistic about the U.S. economy over the next six months.

In Ohio, 47 percent said they were optimistic about the U.S. economy. Those same employers were slightly more positive on the local economy, with 61 percent saying they were at least moderately optimistic. Both numbers were up slightly from April.

Mr. Rankin said it is typical for business owners to feel surer about their own economy than they do about the economy as a whole, partially because they feel they have more control over it.

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.