Small business hiring is integral to consumer spending, and it is therefore integral to economic recovery. Some 28 million unemployed, underemployed, and "marginally attached" workers, drawing an average of less than $16,000 in unemployment benefits and wages from menial jobs, have all but lost their status as “consumer spenders”. These 28 million people have little chance of landing good jobs and contributing to the economy as long as small business is under attack through regulations and taxes.
The regulatory environment has become incredibly daunting for the small business owner. In 2010 the SBA published a report (.pdf) that stated that government regulation cost US small businesses an average of $8,000 per employee in 2008. The American Enterprise Institute reported an average cost of nearly sixteen thousand per employee! If these numbers weren't scary enough, we must keep in mind that they were derived before the advent of the Patient Protection and Affordable Care Act ("Obamacare") and hundreds of additional intrusive business regulations from a menagerie of alphabet soup agencies.
If small business owners’ attitudes toward regulation are any indication of willingness to hire, we’re in big trouble. According to the July 2011 Small Business Outlook Survey, published by the US Chamber of Commerce, nearly 80% of small business owners view the current regulatory environment as unreasonable, and 85% say they are somewhat or very worried about the impact of new regulations on their business. Nearly all of the survey participants chose regulation as one of the greatest impediments to hiring.
And we cannot discount Washington's threat of tax increases on the small business owner.
Much talk has been made in Washington about raising taxes on individuals who earn more than $200-250K per year. This is especially bad news for many small business owners, who file their businesses through their individual tax returns. Such a tax hike would punish the small businesses capable of hiring while doing essentially nothing to raise taxes on the targeted "millionaires and billionaires", the majority of whom earn their money through capital gains.
Corporate and governmental hiring aren't sufficient to spur a true economic recovery. There cannot be a true recovery until small businesses hire en masse, and that won't happen until Washington gets its claws off the backs of small business owners.