Small business hiring to suffer in gov't shutdown

NEW YORK (AP) — If the U.S. government has a protracted shutdown small business hiring could suffer, according to a new survey.

That's the finding of Pepperdine University researchers about the impact of a threatened government shutdown on U.S. companies. A debate is underway in Congress on a funding bill for the fiscal year that begins Oct. 1. If it is not passed, non-essential government operations could be shut down until lawmakers agree on a bill.

The longer the shutdown, the more likely companies are to stop hiring. Eleven percent of companies with less than $5 million in annual revenue surveyed said a one-week shutdown would hurt their hiring plans. Fifteen percent said a two-week shutdown would affect hiring, and 27 percent said a one-month shutdown would hurt hiring.

"Small businesses are still longing for credible evidence that the economy is out of the woods.  A shutdown would not normally have this large an impact, but combined with the continued economic uncertainty, it just serves to keep small businesses hunkered down in a defensive posture," says Craig Everett, director of the Pepperdine Private Capital Markets Project at the Graziadio School of Business and Management.

The researchers also asked questions about the health care law, which requires some small businesses to provide insurance for workers, or face a penalty. Fifty-three percent said they expect implementation of the Affordable Care Act to reduce overall benefit packages and 45 percent said it would hurt hiring plans.

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