Main Street is battling a mean post-election hangover.
A recent survey by Wells Fargo and Gallup found that one in five small business owners expects to shrink the number of jobs at their company over the next 12 months -- the largest percentage of small businesses expecting to reduce jobs the survey has seen since it began in 2003.
Some conservatives have been quick to blame President Barack Obama’s reelection for the projected drop in jobs. Donald Trump tweeted the following:
But Wells Fargo's Marc Bernstein told a somewhat different story, attributing the expected job cuts to an increased fear among small business owners that Washington will fail to avert the automatic spending cuts and tax increases known as the "fiscal cliff."
“Business owners who navigated through the Great Recession now face more uncharted territory created by ongoing uncertainty in Washington,” Bernstein said in a statement. “These owners know that potential federal government spending cuts and tax changes can create a ripple effect, hitting the pocketbooks of consumers and reducing spending that could hit small businesses hard."
Case in point: UHP projects, a small, Virginia-based business that cleans and coats surfaces for one of the largest U.S. builders of government aircraft carriers. Looming cuts to federal defense spending forced the company’s president, Mickey Boyers, to lay off nearly 100 workers, including his own son.
Small business sentiment took a nose-dive the last time the feds tried to solve the nation’s growing deficit. During the height of the U.S. debt ceiling debate in August 2011, the National Federation of Independent Business’s optimism index fell to minus 26. This time around, the NFIB, a lobbying group whose policy priorities are often aligned with Republicans, said its November index plunged even further, to an all time low of minus 35.