On The Job Hunt: Small Businesses Across the Country Say, 'We're Not Hiring'

At a wholesale pizza factory just outside Los Angeles, Calif., 25 men and women pound out the dough.

But like many small businesses in America dealing with a struggling economy, the owners aren't necessarily rolling in it.

"I love what I do, I love my employees. I have people that have been here over 20 years working for me. I don't want to do anything else, but it's frightening out there," says Patty Phillips, the owner of Patty's Pizza in Marina Del Rey. "My bottom line hasn't changed in two years, but my cost of business has changed significantly."

Patty's Pizza isn't alone and reflects a worrying national economic trend -- that small businesses continue to flounder.

Recent polls show that small businesses are firing more than they're hiring.

More On This...

According to a survey released this week from the National Federation of Independent Business, or NFIB, 14 percent of more than 1,800 small businesses across the country polled said they cut staff, while only 12 percent said they made new hires. Also, overall small business optimism is dropping, and the NFIB's optimism index is down for the fourth consecutive month.

John Kabateck, NFIB's California executive director says he doesn't expect things to get better in the near future amid the current business climate.  "Well what we hear from small businesses everyday is that they're overtaxed, they're over regulated, and they're overwhelmed by a government that keeps getting in the way of their ability to grow," Kabateck says.

Phillips agrees. "You watch our government spend money they don't have and then their solution is we are going to tax you more. So what business wants to expand and create jobs with that environment?"

But not all economists are sold on the findings of the recent surveys, and despite the complaints and concerns of some small business owners, they say some key job numbers have actually bounced back.

"Up to 2010, the strongest part of the labor market actually was small businesses. In a very real sense most of the job losses were in larger institutions, and by larger I mean any sort of company that has 50 or above employees," says economist Chris Thornberg with economic forecasting firm, Beacon Economics.

On Friday the Bureau of Labor Statistics reported that the economy added 117,000 jobs in July and unemployment fell slightly to 9.1 percent from June.  Economists were expecting 85,000 jobs to be added and unemployment to remain at 9.2 percent.  Economists say before they declare small business in America is flat, they want to take a closer look at the numbers.

Meantime, a recent report from the U.S. Commerce Department shows anemic growth in the Gross Domestic Product (GNP). That, say experts, has many business owners building up cash reserves for possible problems with the economy and sales down the road.

While some businesses, like Patty's Pizza may not close their doors, they won't be dishing up any expansion plans anytime soon.

"I am an entrepreneur. I used my own savings to start this business. I nickled and dimed myself to build this company without the help of government, but we are frustrated and nervous to see where this economy is going. I am not going to give up, but I am not going to hire right now," says Phillips. "I am just hoping things get better."