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Since October 2008, Wichita has lost about 20,000 jobs — affecting about 1 in 15 workers. In the aircraft industry, layoffs are closer to 1 in 3.
Small business is traditionally the engine of new jobs when an area is pulling out of recession.
What will it take for small business owners to start hiring again? Their answers vary.
They're waiting for:
* The economy to turn up.
* President Obama and Congress finally to set in stone changes to federal rules and regulations.
* Republicans to take one or both houses of Congress in the November elections.
* People to start spending again.
Not all companies or sectors are the same, of course.
Wichita State University's annual forecast for Kansas calls for a tiny upturn in hiring, mostly in the medical field and the oil and gas industry.
Even outside those two sectors, some companies see reasons to hire.
At PrairieFire, a local roaster and distributor of commercial coffee, the production crew blends and roasts more than 1 million pounds of coffee beans a year and supplies it to offices, convenience stores and restaurants in five states.
The roasting plant, at 1900 N. Mosley, is a coffee lover's dream, filled with 152-pound sacks from Colombia and Indonesia and the powerful smell of roasting coffee. Large machines roast, cool, grind and package dozens of blends of coffee.
Although PrairieFire has seen growth in Tulsa and Kansas City, business in Wichita has been pretty flat over the last two years — but that's OK.
"Flat is the new up," jokes general manager Jeff Deitchler.
"We feel pretty good about being flat when the office coffee market is down 5 1/2 percent nationwide," he said.
But that's not the final answer on hiring, he said. Although the economy isn't driving more coffee sales, PrairieFire thinks it can take customers from its competitors.
Deitchler said they probably will add two salesmen in the Wichita area.
"We want to continue that growth curve," he said, "or we're going to go backwards."
Enemy No. 1: the economy
If business is waiting for the local economy to take off, there's no good answer on when that will happen.
Wichita's economy picks up about 12 to 18 months after the national economy. But the national economy remains in slow growth, as unemployment stays high, business and consumer spending remains weak and foreclosures are widespread.
A September survey of small business from credit card company Discover Card showed that 71 percent of respondents said they would wait to hire until the economy improves. The most common reasons for waiting to hire were uncertainty about the economy or a lack of revenue — rather than a concern about taxes.
The optimism of the spring has mostly evaporated as the recovery looks a lot slower.
Jake Shaffer, CEO of McCormick-Armstrong, a century-old Wichita printing company, said his business largely rides up and down with the economy.
He is down about 15 people — about 20 percent of his work force — since 2008, not including temporary workers. He's had to get creative to keep his present staff, furloughing workers one or two days a week during some months.
Business isn't getting worse, really, but he doesn't see it getting much better anytime soon, based on what he hears from his clients. They put off buying and then want a smaller quantity than they used to buy. It's a sign of companies conserving cash, he said.
"A lot of this is a lack of confidence in our recovery," he said.
What would it take for him to hire? Strong revenue growth that promises to last.
Shaffer said he would hire if he saw two quarters of 12 to 15 percent revenue growth.
Other uncertainties
But uncertainty about new rules and taxes coming down from Washington does spook some business owners.
Business owners and business groups point to the possibility of higher taxes on incomes over $250,000 for joint filers, a health care reform law that requires something new for employers every year for the next eight years, and the new Consumer Financial Protection Bureau.
There are so many changes and potential changes that it makes it impossible for businesses to make solid financial projections for next year — one of the keys in deciding whether to hire.
The National Federation of Independent Business said one extreme example is the pending legal requirement that businesses supply to the IRS 1099 tax forms for every business-to-business transaction of $600 or more.
There was bipartisan support to repeal it, said Bill Rys, legal counsel for the federation, but Congress adjourned until after the elections without voting on it.
Obama recently signed the Small Business Jobs and Credit Act to help small business. It includes an extension of the bonus tax depreciation provision that covers the purchase of business jets.
The bill had some good things for small business, Rys said.
"A lot of members say that there are some things in there that are OK," he said. "But it didn't address the big issues, the expiring tax rates and the regulations, like the 1099."
Bob Kelly, general manager of North American Aviation, a maker of composite parts, was pretty gloomy last week.
He's about to impose more layoffs and furloughs on his workers. He had already cut his work force last year from more than 50 to 14. There's even a possibility the plant will close if more work doesn't come between now and spring, he said.
The recovery has flattened and employers have stayed cautious. Cessna Aircraft and Hawker Beechcraft announced cuts of more than 1,000 jobs in the past two weeks.
Kelly sees the political tilt in Washington on tax policy and regulation as discouraging corporate executives and wealthy individuals from opening their wallets.
When does he see the company hiring again?
"Honestly, as soon as Obama gets out of office and the people who employ 70 percent of the people start spending again," he said.
Barriers to hiring
For J.L. Regan, owner of Pharmacare Health Specialists, which is a home-care pharmacy company, government actions directly affect his business.
A big barrier to hiring, he said, is shrinking reimbursements for Medicaid and Medicare, and private insurance. That directly affects his profitability.
Another barrier is the mandates covering some of the medical practices in his businesses.
And, he's not happy with the possibility that Obama and Congress will allow Bush-era tax cuts on single earners making more than $200,000 and joint filers making more than $250,000 to lapse, raising the tax rate from 35 percent to 39.6 percent.
But, most importantly, he needs a little certainty on what his costs will be.
"I want to know what I have to do to survive," he said.
Once he gets that, he said, he can make a decision on whether he can afford more people.
