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Fed Policies Are Slowing Job Growth, Say Business Leaders

Published on June 8, 2013, 10:06am CDT

WMC CEO Survey Finds Health Care Reform Creates Uncertainty

MADISON – With implementation of the federal Patient Protection and Affordable Care Act now less than six months away, state business leaders are expressing concern about how they will comply with the massive new entitlement, according to a survey of CEOs by the state chamber of commerce.   

The WMC Economic Outlook Survey of CEOs throughout the state found that 26 percent of CEOs said health care was the top policy problem, followed by taxes at 24 percent, the weak economy at 20 percent and regulations at 11 percent.

Some 94 percent report Wisconsin is headed in the right direction, and 84 percent say state government is pro-business. In Wisconsin, 47 percent say they are increasing employment, 47 percent said they are not adding workers, and 6 percent are cutting, the survey found.

“Clearly, the oncoming federal health care mandate has employers mired in uncertainty,” said WMC President/CEO Kurt R. Bauer. “CEOs in Wisconsin are looking for certainty, predictability, lower taxes, less regulation, and they see our federal government as making things worse. They are more optimistic about our state’s improving business climate, but that enthusiasm is dampened by the storm clouds generated by Washington, D.C.”

Conducted biannually by Wisconsin Manufacturers & Commerce, the state’s chamber and manufacturers association, the WMC Economic Outlook Survey in May is based on the responses of 364 CEOs whose companies are WMC members.  WMC conducted the survey online and by direct mail of 1,200 CEOs statewide. Sixty-one percent of respondents are from the manufacturing sector, our state’s top industry.

“In this survey, we really probed to find CEOs’ attitudes about what’s holding back the economy, and let them sound off unfiltered,” Bauer said. “The responses are stunning and tell a tale of significant concern among business leaders at this moment in our nation’s history as we move to the health care entitlement.”

In the survey, respondents were allowed to sound off, open-ended on such questions as “What do you believe is holding back the economy and job growth?”

WMC member CEOs are pessimistic largely because of the uncertainty created by federal government policies and overall political dysfunction in Washington, D.C. Those sentiments dominate the verbatim answers in the survey.

In fact, when asked the open-ended question what is holding back the economy and job growth, “uncertainty/unknowns” were mentioned more than 50 times while “health care costs/reform” is mentioned at least 49 times.

Here are some direct quotes from survey respondents:

  • “I think Obamacare is representative of federal overreach and uncertainty that has plagued this economy. People and business overall are afraid or uncertain with the future as it relates to government debt, taxes, growth, etc.”
  • “The constant state of ‘unknown.’ As a businessman, we just ride it out until there is a ‘known.’”
  • “Too many existing and proposed entitlement programs; unreasonable regulation based on emotions, not facts. No fiscal responsibility at the federal government level. Wisconsin is doing much better.”

But while WMC member company executives believe Governor Scott Walker’s administration is business friendly, there is concern that his pro-growth policies haven’t been embraced by state bureaucrats.

Here are some direct quotes about Wisconsin’s business climate:

  • “Governor Walker understands – the Legislature and the bureaucrats do not.”
  • “It is better than previous years but still has a long ways to go with regulation reform and taxes.”

In other areas, employers are predicting some wage increases in the coming year with 26 percent reporting wage hikes of 3 to 3.5 percent. Some 35 percent report wage hikes between 2 and 3 percent, and 35 percent report wage hikes 2 percent or less.

Increased health care costs will be passed onto employees, CEOs report, with 54 percent increasing employee contributions and 28 percent reporting decreased benefit levels.

Employers are reporting difficulty hiring workers, with 55 percent saying workers are hard to find and 76 percent report a lack of qualified applicants.

“Many employers say burgeoning government sponsored benefits like protracted unemployment insurance and other entitlement programs are undermining workers abilities to re-enter the workforce,” Bauer said. “People don’t keep their skills up when they can get unemployment benefits for 24 months along with other entitlements. Employers can compete against each other on wages, but they can’t compete against the government on handouts.”

Related Material:
WMC Economic Outlook Survey Results (pdf file)

FOR FURTHER INFORMATION CONTACT:
Kurt R. Bauer, (608) 258-3400
Jim Pugh, (608) 219-0157

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