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O.C. BUSINESS PLUS | HEARD ON THE BEAT / SMALL BUSINESS

Biggest Headache for the Small Business? Finding Good Workers

March 24, 2000|MARC BALLON | Marc Ballon covers small business and entrepreneurial issues for The Times. He can be reached at (714) 966-7439 and at marc.ballon@latimes.com

Forget about taxes and government regulations. The biggest headache for small companies today is the labor shortage, according to a recent survey by the Small Business Administration. In 1998, about one-third of all small companies experienced difficulties hiring. To land workers, the study found, firms had to boost entry-level wages or settle for less qualified employees.

With Orange County's jobless rate hovering around 2.3%, many local businesses are having difficulties hiring and keeping workers, said Dennis Aigner, an economist at UC Irvine..

Shortages run the gamut, from sales and clerical to technical and managerial positions, he said. "With housing prices going up, companies are also having to pay more to get good people," Aigner added.

In the long-run, higher wages in the absence of increased productivity could stoke inflationary fires and slow growth in the overall U.S. economy, the survey said.

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