NFIB survey shows that cost of health insurance reaches the third decade as number one headache for small business
For Immediate Release
Andrew Wimer, 202-314-2073 or 703-298-5938 (cell)
Follow NFIB on Twitter @NFIB
Follow Andrew on Twitter @AndrewWimer
Washington, DC (September 15, 2016) – A quadrennial survey that was released earlier this week by the National Federation of Independent Business (NFIB) revealed that more than six years after the implementation of Obamacare, small business owners still identify the cost of health insurance as their most severe business problem. Other major concerns that inhibit the success of their business include taxes, regulations, and labor and employment issues.
“Many Americans are frustrated by the federal government’s failure to solve problems. Small business owners are frustrated by the problems that the federal government creates,” said NFIB President and CEO Juanita Duggan. “All of the top problems for small businesses relate directly to excessive federal regulation and taxation.”
NFIB every four years presents a survey of 75 potential business problems to its members. Respondents are asked to rate the severity of each problem on a scale of 1 (a critical problem) to 7 (not a problem). The issues are then ranked from top to bottom by their average score.
The 2016 Problems and Priorities survey revealed that small business owners listed the cost of health insurance, government regulations, and high federal taxes as their top three concerns. The issue groups that held the most top ranked problems dealt with taxes, regulations, and labor and employment issue. The problem that jumped most from 2012 to 2016 was owners ability to find qualified workers.
Below is a more in-depth look at NFIB’s positions on each of the issues:
Health insurance costs:
The cost of health insurance has been the number one most severe issue plaguing the growth of small business for the past 30 years with no relief in sight. In fact, health insurance costs for small firms have increased about 30 percent over the last decade, outpacing wages and inflation. Over 50 percent of small business owner find the cost of health insurance a critical issue. It is such a huge burden for small business owners that it overshadows the next biggest problem on the list by 23 percentage points Obamacare was supposed to address the high costs, but clearly, most small business owners have not felt any relief. Without significant reform efforts, this time addressing costs, NFIB predicts that it will remain the top problem when the next survey is released in 2020.
NFIB last fall released a study on the costs of health insurance. Check out NFIB’s website to read more.
Regulations:
Regulations, which continue to mound for the small business sector, are making it increasingly difficult for owners to run their business. “Unreasonable Government Regulations” climbed the ranking latter in the most recent Problems and Priorities survey, moving from the fifth most severe issue in 2012 to its current second place position. The current administration has added a record number of regulations on small employers, especially through the Environmental Protection Agency and Department of Labor. Small business owners do not have compliance officers to help them jump through all of these regulatory hoops. The data shows that the influx of regulations is making owners extremely uncertain about government policy and the economy, which is stagnating any growth in the small business sector.
Watch NFIB President and CEO Juanita Duggan talk about the DOL overtime rule on FOX Business.
Taxes:
Tax related issues are a major concern for small business owners. In fact, 5 out of the top 10 most severe small business problems are tax related. The survey shows that small business owners are burdened by both federal and state tax rates, tax complexity, frequent changes in tax law, and massive amounts of paperwork.
Labor and business issues:
The major shifts in issue ranking from the 2012 NFIB report were largely related to labor and employment issues. The biggest change from the previous report was “Finding and Keeping Skilled Employees.” This indicates that the labor market is tightening, which is good for workers that have jobs where they can command higher pay and better benefits. However, it is bad for businesses that cannot find good workers and for low-skilled and inexperienced workers. Another issue that jumped up the ranking was “Minimum Wage/Living Wage.” With several states, towns, and cities mandating a dramatic minimum wage increase, up to $15 in some places, it’s no wonder small business owners consider it worrisome to their business.
NFIB Chief Economist William Dunkelberg explained in Forbes why he thinks raising the minimum wage to $15 an hour is bad business policy.
#####
