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Small Business and Retail—More job growth seen in final months of the year



California Called One of Worst States

For Small Biz

Companies still have a strong need for employees, going into the final quarter of the year.

So said a quarterly survey by Manpower, Inc. About one-third of the nearly 16,000 companies surveyed by the staffing agency said they planned to add staff in the final three months of the year.

The results marked the strongest year-end level seen in the 25 years since the Manpower survey began, said Jeffrey Joerres, president and CEO of Manpower.

Only 7 percent of the companies surveyed said they plan staff decreases, while 57 percent anticipate no change and 4 percent are uncertain.

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“While the end of the (worker) shortage is nowhere in sight, companies are gradually finding methods of dealing with the problem,” Joerres said.

The tight labor situation has caused companies to concentrate on retaining current staff and redeploying them in new functions when possible, he said.

The wholesale and retail sector showed the strongest demand for workers, and manufacturing companies came in second with 32 percent of durable-goods makers saying they need a larger staff, Joerres said.

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Golden State Tarnishes: A recent survey by the Washington, D.C.-based Small Business Survival Committee showed that California made the Top 10 list for worst states to do business in.

California ranks 41st out of 50 states on the Small Business Survival Index for 1999, said Raymond J. Keating, chief economist for the SBSC.

The survey looks at the cost of doing business in each of the 50 states. Factors considered include high taxes, the crime rate and other factors, he said.

“Personal income and capital gains taxes are extremely high in California. Corporate income, health insurance and general sales taxes are high, as are workers’ compensation costs,” Keating said. The state’s 9.3 percent personal income tax is one of the highest, exceeded only by the District of Columbia, Rhode Island and Vermont. California’s capital gains tax of 9.3 percent is the second-highest in the nation, coming in just behind the 9.5 percent rate in the District of Columbia, he said.

Other factors include the high corporate income tax, general sales tax, unemployment tax, health insurance tax rate and workers’ compensation. All of these put California among the highest 20 tax collectors of all the states, Keating said.

On the plus side, California levies no added death taxes, and the number of bureaucrats relative to population is very low, he said.

The 10 best states for doing business are South Dakota, Wyoming, Nevada, New Hampshire, Texas, Washington, Florida, Alabama, Tennessee and Mississippi, Keating said.

The 10 most painful states are Hawaii, Rhode Island, New Mexico, New York, Oregon, New Jersey, Minnesota, Ohio, Maine and California, he said.

The District of Columbia, when added to the mix, tops Hawaii as the most painful region of all, Keating said.

Death Tax Veto Override Urged: As promised, President Bill Clinton vetoed a bill Sept. 1 that would have ended the federal inheritance tax, also called the “death tax.” Now, Congress is looking to override the president’s veto.

Jack Faris, president of the Washington, D.C.-based small business advocacy group the National Federation of Independent Business, is urging small business owners to call legislators in support of their override attempt.

“The unfair and anti-American death tax (is) a stab in the heart of America’s small business owners,” Faris said.

Faris noted that in June, the bill passed the U.S. House of Representatives with a veto-proof majority , including 65 Democrats. In the Senate, the bill was approved with a near veto-proof majority.

“President Clinton blatantly ignored the united cries of small, family-owned businesses to put an end to this punitive, unfair tax,” Faris said. “Sadly, this administration allowed election-year partisanship to stand in the way of common-sense legislation. Today, the losers are the millions of small family ranchers, farmers and business owners who are most hurt by this anti-American tax.”

The death tax not only affects many small businesses, it also has a negative impact on the nation’s economy. Faris cited a 1996 Heritage Foundation study that said repeal of the death tax would lead to larger federal revenues due to increased economic growth.

Faris also cited a Wall Street Journal report in 1999 that said 200,000 extra jobs could be created each year with money that small family-owned farms and businesses currently spend on paying or preparing for the death tax.

Congress is slated to vote to override the president’s veto this week. Faris has called upon the NFIB’s 600,000 members to contact their representatives and senators, urging them to override the president’s veto.

“This fight is far from over,” he said. “America’s Main Street business owners, family farmers and ranchers will not rest until the death tax is buried once and for all.”

Send small business and retail news to Lee Zion at lzion@sdbj.com.

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