Capitol Hill
Small business owners: Recession over, recovery slow
Washington Business Journal - by Kent Hoover
As Congress resumes debate on economic stimulus legislation, a new survey shows that many small business owners think the recession already is over.
The National Federation of Independent Business' "Small Business Optimism Index" rose 1 point in December, following a 3.1 point increase in November. The index is based on economic indicators compiled from a monthly survey of small business owners.
"December saw a 12-point gain in the percent of owners expecting the economy to be better in six months and a 10-point gain in the percent expecting higher real sales in the next three months," says NFIB Chief Economist William Dunkelberg. "This is going to be the mildest recession in post-war history."
The bad news is the recovery will be gradual. Only 7 percent of small business owners expect to hire additional employees and only 31 percent plan to spend money on new facilities or equipment.
Meanwhile, NFIB (http://www.nfib.com), like other business groups, criticized the proposal by Sen. Edward Kennedy, D-Mass., to suspend the tax cuts Congress passed last year now that projected budget surpluses have turned into deficits.
"Allowing America's small business owners and consumers to keep and spend more of their own money was and still is the right recipe for economic revival," says NFIB Senior Vice President Dan Danner. "Turning around now and picking those pockets at this critical time would have exactly the opposite effect."
... The Small Business Administration extended the deadline for its national economic injury disaster loan program to April 22 so that "more small business owners can get the help they need to get back on their feet," says SBA Administrator Hector Barreto.
The original deadline was Jan. 21.
Small businesses that suffered economic damages as a direct result of the Sept. 11 terrorist attack on America are eligible for working capital loans of up to $1.5 million, with a 4 percent interest rate and terms of up to 30 years.
SBA (see http://www.sba.gov) has approved $94 million of these loans since the program was expanded nationally on Oct. 22. The agency also has made $233 million in disaster loans to businesses and residents in New York City and the area around the Pentagon in Northern Virginia.
The deadline extension was praised by New York Rep. Nydia Velazquez, the ranking Democrat on the House Small Business Committee, who says many small businesses "are just now discovering how badly they have suffered over the past three months."
Meanwhile, President Bush signed legislation that adds another $320 million in disaster loan capacity for New York City and Northern Virginia. The bill also expands the maximum disaster loan in these areas to $10 million, makes small nonprofit organizations eligible for the loans and defers loan payments for two years.
... The Occupational Safety and Health Administration plans to increase its number of workplace inspections this year, targeting sites with the highest injury and illness rates.
OSHA (http://www.osha.gov) plans 36,400 inspections this year, up from 35,800 last year.
"OSHA needs to keep helping the majority of employers who want to do the right thing, but we must also aggressively pursue the `bad actors,'" says OSHA Administrator John Henshaw.
The agency also will increase its enforcement focus on industries like construction where workers who do not speak English are at the greatest risk of being injured.
... The number of union members grew slightly in 2001 to 16.28 million, up 20,000 from the year before, according to the Bureau of Labor Statistics (http://www.bls.gov/cps).
Although only 13.5 percent of the work force is unionized -- compared with 20.1 percent in 1983 -- AFL-CIO President John Sweeney says last year's slight gain shows that "steady dedication and perseverance is laying the groundwork for greater change."
Union penetration is highest in public service jobs: Nearly 40 percent of government workers are union workers, compared with less than 10 percent of private-sector workers.
... The number of businesses with no employees increased 2.8 percent from 1998 to 1999, to 16.1 million, the Census Bureau (http://www.census.gov) reports.
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