A new survey from CNBC and SurveyMonkey finds small businesses (SMBs) across the U.S. aren’t going to give their workers raises despite tax breaks headed their way.
Reports in CNBC on Thursday (Feb. 22) said the Q1 survey found 37 percent of the general public are hoping small businesses will use their tax cuts to boost payroll; the publication said this was the most common use of the tax breaks that survey respondents wanted to see.
But the publication noted that previous research by the companies in their Q4 2017 report found about a third would use a hypothetical tax break to “pay down debt.” About a fifth said they would “invest in new facilities, equipment or technology” and 12 percent said they would pay to repair equipment, technologies or facilities.
Just 10 percent said they would use a tax break to raise employee salaries, though it is unclear whether that percentage has risen since the Tax Cuts and Jobs Act was signed into law in December.
Researchers also noted small businesses consistently prioritize the cost of debt and capital as more important issues to their companies than the cost of labor.
The report defined small businesses as having fewer than 20 employees, though SMBs with more workers are more likely to boost employee wages than firms with only a handful of employees.
Two-thirds of survey respondents said they believe larger corporations will see the most benefit from tax reform, while 20 percent believe individual taxpayers and 10 percent believe small businesses will gain the most.
CNBC’s prediction that small firms won’t use their tax breaks to increase wages follows new data released from CBIZ, which found just 19 percent of small businesses increased their headcounts in January of this year. CBIZ’s report also found a 3.14 percent decline in small business hiring activity for the month, though analysts noted the trend is par for the course this time of year.