Posts Tagged employment

Stagnation: PA business climate remains sluggish


Pennsylvania’s business climate remains sluggish as the commonwealth continues to struggle in the aftermath of the Great Recession.  Business conditions, employment levels and sales have all backslid over the past six months with owners blaming high taxes, government regulation and a lack of skilled workers for the malaise.

The Fall 2016 Keystone Business Climate Survey conducted by the Lincoln Institute of Public Opinion Research found half of the business owners and chief executive officers survey saying the state’s economy has gotten worse over the past six months, only five percent felt Pennsylvania’s business climate had improved during that time frame.

Comparatively, one year ago 42% felt the business climate had gotten worse, while six percent at that time said it had improved.  There is little optimism that business conditions will improve soon. Forty-four percent say they expect the state’s economy to continue getting worse over the upcoming six months, five percent expect to see an improvement in the business climate.

Along with that pessimistic overall prognosis twice as many businesses report having reduced their workforce as say they have added jobs.  The majority of businesses – 66% – reported that employment levels remained about the same over the past six months.  But, 21% said they have reduced their employee compliment while 11% added employees.  The picture improves slightly as the owners/CEOs look ahead to the coming six months.  Sixteen percent say they plan to add employees, 12% expect to reduce their workforce.

Sales have also taken a hit over the past six months.  Thirty-nine percent said their sales remained about the same from March thru September.  But, 39% reported decreased sales and were off-set by only 21% having reported sales increases.  Looking forward, 51% expect sales to remain stable.  Twenty-Four percent forecast an increase in sales, 23% are braced for a sales decrease.

Factors Impacting Business Growth

Among the factors cited by businesses for why they considered expanding their businesses over the past two years, but decided against expansion taxes and regulation topped the list of barriers.  Onerous federal regulations were cited by 41% of the businesses that considered, but rejected, expansion plans.  Coming in a close second was Governor Tom Wolf’s proposed tax increases cited by 40% as a reason why they did not expand. Pennsylvania’s tax structure was listed by 29% as having frustrated expansion plans.

Thirty-six percent cited onerous state regulations as a barrier to expansion, while another 35% cited the lack of a skilled work force.  Nearly half of the businesses surveyed said they currently have open positions for which they have been unable to find qualified applicants. Forty-two percent say they have been unable to fill one to five jobs; 2% have six to ten open positions; one percent has more than ten jobs unfilled due to lack of qualified applicants.

State Issues

Pennsylvania fiscal condition continues to be of concern to the business owners and CEOs participating in the Fall 2016 Keystone Business Climate Survey.  Eighty-five percent disagreed – 70% strongly so – with Republicans in the General Assembly having agreed to a $1.4 billion spending increase and then raising taxes to enact the current year’s state budget.

Looking ahead to what will likely be another epic budget battle next summer, 92% say the General Assembly must address cost drivers such as pension reform before considering an increase in taxes.  In fact, 34% said the state’s massive unfunded pension liability has caused them to not consider expanding in Pennsylvania.

Among pension reforms being considered is moving state employees from the current defined benefit pension system to a defined contribution plan. Thirty-nine percent of the businesses surveyed said they offer employees a company administered defined contribution plan to which the company contributes.  Only 3% of the private businesses surveyed continue to offer a defined pension plan.  Another 40% offer employees no retirement plans at all.

Earlier this year the General Assembly did pass, and Governor Tom Wolf signed into law, some modest changes to the state’s century-old liquor laws. Business owners/CEOs said those reforms did not go far enough.  Fifty-two percent would like for the state to completely privatize both retail sales and wholesale distribution of alcoholic products.  Another 26% would like to see just retail sales privatized.  Twelve percent said the recent changes were sufficient.

Pennsylvania has an abundant supply of natural gas, but additional pipelines are needed to get that gas to market.  Eight-nine percent agree – 60% strongly agree – that this resource should be developed and more pipelines built.  Nine percent disagree.  Twenty-five percent said easier access to natural gas would be a benefit to their business with an additional 14% saying it would be a major benefit.  Thirty percent said they do not utilize natural gas in their business.

Over the past nine years since the passage of Act 44 the Pennsylvania Turnpike Commission has diverted $5.2 billion to PennDOT to help pay for state highways and public transit.  This has resulted in annual fare increases for turnpike travelers.  Sixty-three percent of those participating in the Fall 2016 Keystone Business Climate Survey said this should end and fare revenue be used only to maintain and improve the turnpike.  Twenty-nine percent felt the sharing of revenue should continue.

Job Approval Ratings

President Barack Obama and Governor Tom Wolf continue to suffer from significantly low job approval ratings among the business community.  Eighty-four percent have a negative view of the President’s job performance; 86% disapprove of the job being done by Governor Wolf.

U.S. Senator Pat Toomey, who faces re-election in November, received a 50% job approval rating against 23% with a negative view of his job performance.  The job being done by U.S. Senator Robert P. Casey, Jr. is viewed negatively by 56% of the business owners/CEOs, 18% give him positive marks.  Likewise, 54% say Federal Reserve Chair Janet Yellen is doing a poor job, 15% approve.

Pennsylvania has three statewide constitutional or “row” offices. Two are serving by appointment, their elected predecessors having resigned after being convicted of crimes.  Auditor General Eugene DePasquale is the surviving official elected in 2012 still in office.  Seventy-three percent have no opinion of his job performance, with 14% saying he is doing a good job and 14% having a negative opinion of his job performance.  Likewise about two-thirds offered no opinions on state Treasurer Tim Reese or Attorney General Bruce Beemer.  Of those who did, 18% give Beemer a negative rating, 6% a positive one while 15% hold a negative view of Reese, 5% a positive view.

As has been the case throughout the Keystone Business Climate Survey’s 22-year history the owners and chief executive officers hold the federal congress and the state legislature in very low regard.  Just 8% approve of the job being done by the United States Senate, 11% approve of the job being done by the U.S. House of Representatives.  Seventeen percent approve of the job performance of the Pennsylvania Senate; 19% approve of the job being done by the Pennsylvania House of Representatives.

Finally, the Lincoln Institute asked participants in the survey who they support for President of the United States and United State Senator from Pennsylvania in the upcoming November General Election.  Seventy-three percent said they will vote for the Republican nominee Donald Trump, 12% support the Democratic nominee Hillary Clinton and 6% say they will vote for Libertarian Gary Johnson.   Republican incumbent U.S. Senator Pat Toomey has the support of 81% of the owners/CEOs, Democratic challenger Katie McGinty has 12% support.

Methodology

The Fall 2016 Keystone Business Climate Survey was conducted electronically by the Lincoln Institute of Public Opinion Research, Inc. from September 13 through October 5, 2016.  A total of 370 businesses responded to the survey invitation.  Of those 81% are the owner of the business, 14% are the CEO/COO/CFO and one percent a business manager.

Twenty-five percent of the responses came from the Philadelphia/southeastern part of the state; 18% from Pittsburgh/southwestern Pennsylvania; 16% from south/central Pennsylvania; 13% from northwestern Pennsylvania; 11% from northeastern Pennsylvania; 10% from north-central Pennsylvania; 4% from the Lehigh Valley and 3% from the Altoona/Johnstown area.

Complete numeric results are posted on-line at http://www.lincolninstitute.org

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PA Business Climate Improving…But Obamacare a drag on employment, pay


For the first time in a decade, by a narrow margin, more Pennsylvania employers say business conditions in the commonwealth are improving than say the state’s economy is getting worse.  But, that optimism is tempered by a lack of job creation and lower wage hikes due to the implementation of the Affordable Care Act, better known as Obamacare.

George W. Bush was president and on the verge of re-election in 2004, the last time respondents to the Lincoln Institute’s Keystone Business Climate Survey thought the business climate was getting better rather than worse.  Since then the nation has experienced the Great Recession and subsequent slow recovery.

But, the current survey finds 20% of the business owners and CEOs responding say over the past six months business conditions in Pennsylvania have gotten better, while 19% say the state’s economy has gotten worse.  By comparison, one year ago 31% felt business conditions had gotten worse and just 14% saw an improvement.

There is not, however, optimism for the immediate future.  Looking ahead six months, 27% expect business conditions in Pennsylvania to get worse, while 16% expect conditions to get better.

Driving the current burst of optimism are increasing sales.  Thirty-six percent of the companies said sales have increased over the past six months as 24% reported decreased sales.  Looking ahead, 32% project sales will increase, 13% expect sales to drop.

Employment levels dropped over the past six months, with 20% reporting higher employment and 24% saying employment at their business has decreased.  Looking ahead six months, 21% project adding employees, while 9% plan to employ fewer workers.

Impact of the Affordable Care Act

It is clear the Affordable Care Act (ACA), or Obamacare, is having a negative impact on both the number of jobs that are being created, and on wages and pay hikes. Twenty-five percent of the business leaders participating in the survey said they have decided not to hire additional employees due to the requirements of Obamacare.  Ten percent said they have actually reduced the number of employees because of ACA; while another 3% said they hired, but did so later than they had planned.  Less than 1% said they hired sooner than planned because of Obamacare. Fifty-eight percent said ACA has had no impact on their hiring plans.

In terms of wages/salaries, 33% said they have delayed giving pay raises due to the costs of Obamacare.  Twenty-eight percent indicated they reduced the amounts of pay raises, while 26% said they paid new hires less to compensate for the costs associated with compliance of the Affordable Care Act.  Five percent reduced the pay of current employees, while 2% said they increased employee pay in response to ACA requirements.  A total of 42% said Obamacare has no impact on their wages/salaries.

State Issues

Education spending has been a major issue in the gubernatorial campaign. But, unlike the electorate at-large, business owners and CEOs participating in the Fall 2014 Keystone Business Climate Surveysay the state spends too much money on public education.  Forty percent think state government spend too much on public education, 29% say the state spends too little, while 27% say state spending on public education is about the right amount.

By a large margin, 78% to 19%, the employers say they are not willing to pay higher taxes to provide additional funding to public education.  There is, however, strong support for the Educational Improvement Tax Credit (EITC) which businesses can claim for donating money to K-12 educational institutions.  Forty-seven percent think the General Assembly should allocate more month to the tax credit fund so more businesses can participate; 36% say the fund should be kept at current levels.

Taxes have also been a major campaign issue in 2014.  When asked whether Pennsylvania should retain the current “flat” income tax or move to a “graduated” income tax where low income earners are exempt and higher income earners pay a higher rate 84% said they support the current “flat” income tax, 14% would like to see a “graduated” rate.

A proposal to exempt the first $30,000 from state income taxes and raise the rate for money earned above that level from 3.07% to 5% drew strong opposition from the business leaders.  Seventy-three percent oppose such a system with 60% saying they are strongly opposed.    Twenty-three percent said they would support such a change.

Mandating paid sick leave for employees was opposed by three-quarters of the business owners and CEOs who participated in the Lincoln Institute survey.  Seventeen percent said they would support mandating paid sick leave for businesses with over 50 employees. Another 6% support mandating paid sick leave for all businesses regardless of size.

Job Approval Ratings

Mirroring the national trend, President Obama received a highly negative job approval rating from the business owners and CEOs.  Eighty-five percent voiced a negative view of the president, while 13% offered a positive assessment.

U.S. Senator Pat Toomey is viewed favorably by 51% of the survey participants while 24% have a negative view.  The numbers reverse for U.S. Senator Robert P. Casey, Jr. as 60% offered a negative view of his job performance against a 21% positive rating.   Fed Chairman Janet Yellen received a 38% negative / 28% positive rating; and, U.S. Treasury Secretary Jack Lew scored a 42% negative / 8% positive.

At the state level Governor Tom Corbett sports a 52% positive rating while 35% disapprove of the job being done by the Republican governor.  The CEOs and business owners turned thumbs down on Attorney General Kathleen Kane, who received a 49% negative rating against just 16% positive.  Most offered no opinion on the job performance of Auditor General Eugene Depasquale and State Treasurer Rob McCord.  Of those who did, Depasquale had a 20% negative / 11% positive rating and McCord scored 21% negative / 17% positive.

Participants in the Fall 2014 Keystone Business Climate Survey took a dim view of the job being done by both Congress and by the Pennsylvania General Assembly.  Eighty-nine percent offered a negative assessment of the U.S. Senate, with 7% having a positive view.  The U.S. House of Representatives fared slightly better scoring a 72% negative / 22% positive rating.  Sixty-three percent have a negative view of the job being done by the Pennsylvania Senate, 19% approve.  The Pennsylvania House of Representatives turned in a marginally higher score, with a 62% negative / 23% positive rating.

And, Governor Tom Corbett finally came out ahead in one poll.  Sixty-five percent of the business owners and CEOs said they plan to vote for the incumbent governor in the November 4th General Election, 20% say they will cast their ballot for Democratic challenger Tom Wolf.  However, 53% expect Wolf to win the election, while 29% predict a Corbett victory.

Methodology

The Lincoln Institute’s 2014 Keystone Business Climate Survey was conducted electronically from September 26, 2014 through October 17, 2014.  A total of 316 responses were received.  Of those, 69% are the owner of their business, 24% are the CEO/COO or CFO, another 4% are a state or local manager. Twenty-seven percent of the respondents are located in southeastern Pennsylvania, 18% in southwestern Pennsylvania, 14% in the northwest section of the state, 17% in south-central Pennsylvania, 11% in northeastern Pennsylvania, 6% in the Lehigh Valley, six percent in north-central Pennsylvania and 1% in the Altoona/Johnstown area. Complete numeric results are available at www.lincolninstitute.org.

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Treading Water: PA business owners/CEOs don’t see economic recovery


Although many key economic indicators are pointing to a slowly improving economy, employers in Pennsylvania say – at best – the state’s business climate is stagnant. More report lower employment levels than increased levels; and more businesses say over the past six months sales have declined rather than increased. Looking ahead six months, there is little expectation for a significant improvement in economic conditions.

Results of the Spring 2013 Keystone Business Climate Survey of business owners and Chief Executive Officers found by a two-to-one margin they say business conditions in the state have gotten worse over the past six months rather than better. Thirty-five percent said that business conditions in Pennsylvania have gotten worse, 17% say they have improved, 47% said business conditions remained about the same. Those numbers track almost exactly results of the 2012 Spring survey indicating the state’s economy has made little progress over the past year. Looking ahead, 33% expect business conditions to get worse, 19% say they expect some improvement, 47% expect conditions to remain about the same.

The business leaders surveyed continue to report declining employment levels. Twenty-seven percent said employment levels at their company are lower than six months ago, while 9% report having more employees. Sixty-two percent say their employment levels have remained about the same. The employment picture is worse than a year ago when 13% of the employers said they have increased their employee compliments and 20% reported a decrease. Looking ahead, 15% say they expect to increase the number of employees at their business, 17% are planning on a workforce reduction. Sixty-five percent say employment to remain about the same.

Sales are another area of concern. Forty-seven percent of the CEOs responding to the Lincoln Institute survey said sales have dropped over the past six months, while 17% reported an increase in sales. Another 36% said sales have remained steady. These numbers are considerably more negative than those reported last spring when 35% reported decreased sales and 28% reported a sales upswing. Looking ahead there is a bit of optimism: 27% expect sales to increase while 19% forecast declining sales.

Job Approval Ratings

President Barack Obama continues to be highly unpopular among Pennsylvania’s business leaders. Twelve percent offered a positive view of his job performance, while 84% disapproved. The job approval rating of Pennsylvania’s two U.S. Senators are going in opposite directions. U.S. Senator Pat Toomey’s positive job approval jumped from 47% last spring to 58% in the current survey, while his negative rating dropped from 23% last year to 19% this year. Meanwhile, U.S. Senator Robert P. Casey, Jr.’s negative rating increased from 62% last spring to 69% this year. His positive job approval also increased from 11% last spring to 14% in the current poll.

At the state level, Governor Tom Corbett’s job approval rating remains steady. Fifty percent give him positive reviews, up from 48% last year. His current negative number is 32%, exactly where it was one year ago. Attorney General Kathleen Kane’s first job approval test resulted in a 21% positive – 28% negative rating. New Auditor General Eugene Depasquale’s inaugural numbers found a 9% positive – 14% negative rating. State Treasurer Rob McCord weighed in with a 13% positive – 14% negative rating.

As for legislative bodies, respondents to the survey gave the U.S. Senate a 95% negative rating with only 3% having a positive view of the upper chamber. Seventy-one percent hold a negative view of the U.S. House of Representatives while 23% give them a positive rating. At the state level, approval of the job being done by the House of Representatives has increased over the past year: 32% now approve of the state House up from 20% last Spring, but 48% hold a negative view of that chamber. Fifty-four percent disapprove of the job being done by the Pennsylvania Senate, while 25% approve.

State Issues

Governor Tom Corbett has outlined an ambitious legislative agenda, with privatization of the state’s monopoly liquor stores at the top of the list. The business owners and Chief Executive Officers responding to the Lincoln Institute’s Spring 2013 Keystone Business Climate Survey are in strong agreement with the governor that the time for privatization has arrived. Eighty-five percent indicated their support of ending the liquor monopoly and placing distribution and retail sales of shine and spirits into private hands. Of that number, 65% said they “strongly approve” of the Corbett plan. Twelve percent expressed their opposition.

Support for the governor’s other privatization plan, that to remove administrative operations of the Pennsylvania Lottery from government employees and place them into private hands received less support, but 53% did agree with privatizing lottery operations. Twenty-eight percent expressed opposition and 19% offered no opinion.

The controversial decision by Governor Corbett to not set up a state-based Medicaid health care exchange under provisions of the Affordable Care Act (Obamacare) drew support from 65% of the business leaders polled with 25% in disagreement and ten percent offering no opinion. To date, 62% said they have had to take no steps to comply with provisions of the act, while 15% reported having to increase employee co-pay to cover additional costs; 10% have cut staff or reduced hours; 8% have raised their prices and 5% have discontinued offering health care coverage to their employees.

A number of public employee retirement systems, ranging from those covering state employees to school districts and municipalities, are projected to experience a significant shortfall in funding in the near future. To deal with that, respondents to the Lincoln Institute survey said governments should require higher employee contributions (77%), cut benefits to retirees (57%), divert spending from other areas to cover the shortfall (25%), or raise taxes to cover the shortfall (4%). Eight percent suggested all of the above mentioned steps should be taken to deal with the problem.

Governor Corbett has proposed lifting the cap on the Oil Company Franchise Tax to raise additional state revenue for spending on transportation infrastructure improvements including roads and bridges.   Fifty-seven percent of the business owners/CEOs said they agree with that idea while 38% disagree. But, when asked if lifting that cap would result in an increase of the cost of gasoline at the pump of over 20 cents per gallon, support for the plan dropped to 28% while opposition increased to 69%. Of that 69% who disagreed, 47% expressed strong disagreement.

To provide additional funding for infrastructure, eighty-eight percent said the state should cut administrative overhead; 45% opined that spending in other areas should be cut and diverted to transportation; 30% would raise driver license renewal feels; 19% would raise gasoline taxes and 5% would raise general fund taxes. Fifteen percent said the funding crisis is overblown and no additional funds are needed.

As the governor and the general assembly work toward adoption of a 2013-2014 state budget, 56% of the business leaders participating in the Spring 2013 Keystone Business Climate Survey said state spending is too high and spending levels should be cut further. Thirty-seven percent said the current levels of spending are appropriate while 4% suggested state government should increase taxes and spending.

Federal Issues

In the debate over enactment of additional restrictions on the sale and purchase of firearms 31% said they would support additional restrictions, with 11% saying they strongly support additional restrictions. But, 68% said they oppose the placement of additional restrictions on the sale and purchase of firearms with 50% being in strong opposition to such additional restrictions.

Automatic federal spending cuts, official known as sequestration, took effect the beginning of March. Eighty percent of the businesses said the federal spending cuts have had no impact on their business. Twelve percent indicated sequestration had negatively impacted their business while 3% said the cuts have had a positive impact.

There has been much discussion and debate over the rising national debt. Ninety percent of the business owners/CEOs said the rising national debt will have a negative impact on the U.S. economy with 77% predicting a significantly negative impact. Five percent suggested the rising national debt will have a positive impact on the economy while 4% predict no impact at all.

Methodology

The Spring 2013 Keystone Business Climate Survey was conducted by the Lincoln Institute of Public Opinion Research, Inc. from March 8, 2013 through April 5, 2013. A total of 260 business leaders participated in the electronic survey. Of that number 80% were the owner of the business; 15% serve as CEO/COO/CFO; 2% are a local manager and 1% a state manager. Complete numeric results are available at www.lincolninstitute.org.

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