Hiring rises but uncertainty makes some nervous
By CHRISTOPHER S. RUGABER, AP Economics Writer
WASHINGTON (AP) -- The U.S. economy added 163,000 jobs in July, the most in five months.
That's welcome news to some company owners after a rough stretch of weak growth and diminishing consumer spending. But to others, it's just one good month in a year filled with uncertainty.
Some company owners and executives say they are reluctant to add permanent employees without more assurances that growth will pick up. They worry about a recession in Europe and U.S. tax rates that are scheduled to rise early next year if Congress fails to reach an agreement on a major budget deal.
Even those ready to hire are facing challenges. Some, mostly high-tech or manufacturing firms, say they are having trouble finding skilled candidates.
Here are the issues raised by several companies interviewed by Associated Press reporters this week:
IS THIS SUSTAINABLE?
It's been a good year for Bill Adler, president of Stripmatic Products Inc. in Cleveland. Sales are up 25 percent at his company, which sells steel tubular parts, mostly to the auto industry.
But Adler is reluctant to hire more employees for his 30-person shop. He's concerned that his taxes may go up next year and is unsure about the impact of the Obama administration's health care reform on health care costs.
"We do have a concern, is this economy going to be sustainable?" he asks. "There's not a lot of good news out there in the past month or so."
BUDGET CUTS LOOM
It's not just the tax increases that businesses fear. Some also worry about the sharp cuts in government spending that are also scheduled to take place next year.
That would directly affect John Raine's company, which makes bags, belts, holsters and other gear for the military.
Raine said he is also worried about how the health care overhaul will affect his costs. He estimates insurance costs for his employees will increase about 40 percent over the next two years.
Raine currently has 13 employees. He's laid off one this year, the first for his company in its 26-year history.
Michael Beckley can't find enough talented engineers.
The chief technology officer at Appian Corp, a Reston, Va., software company, has added 40 new employees this year and needs to fill another 40 slots by the end of the year. That would bring his total head count to 200. The company builds software used by Amazon, Enterprise Rent-A-Car, Starbucks and others to run their businesses or develop new products.
"It's ironic that there's so much unemployment but unfortunately the American educational system hasn't turned out anywhere near the number of engineers that it needs to. ... It's incredibly competitive for the top engineers," Beckley said.
SKILLED WORKERS, LOWER PAY
Steven E. Fielding also says he can't find workers with the skills to do the job. And those who can won't accept lower pay.
"There's a huge gap in basically what's out there for supply versus the skill sets that we need," said Fielding, president of Fielding Manufacturing in Cranston, R.I. The company makes custom miniature component parts for other manufacturers. It has 35 employees and needs four highly skilled technicians.
There are some skilled workers but they aren't willing to do the job for the salary offered.
Fielding said that older, experienced workers haven't "come to grips with globalization" and aren't willing accept lower pay than what they made 15 years ago.
Not everyone is pessimistic about the hiring outlook. Molly Maid has benefited from the rise in two-income families and longer work weeks. The more people work the less time they have to clean. That has increased demand for the cleaning services company.
The franchise is looking to hire about 1,000 new employees this year.
Craig Donaldson, chief executive officer of the parent company that owns Molly Maid, said business has been growing year after year since 2009. The company has about 8,000 employees. And it has 450 Molly Maid franchisees around the country.
HEALTH CARE TECHNOLOGY
Excellence in Healthcare, a health care technology consulting firm in Fayetteville, Ark., has grown quickly: it had only two employees in May 2011. Today it has 16 employees in three states.
Matt Drachenberg, chief operating officer, says the company's growth is not necessarily a good thing for America. He said the growth "is a product of the mass confusion in the health care industry" over new government regulations.
Many doctors and dentists who work alone don't have the expertise to handle technology compliance. That's why they hire Drachenberg's company.
"We're just trying to keep up," he said.
AP business writers Joseph Pisani and Scott Mayerowitz in New York contributed to this report.