Small Business Employment and Compensation Up in July
The month of July was a busy hiring season for small businesses. In addition to hiring 50,000 employees, they also significantly increased the number of monthly hours worked and compensation, according to the latest Intuit Small Business Employment Index. Since the hiring trend began in October 2009, small businesses have created 715,000 jobs.
“July’s small business data cheers me up,” says Susan Woodward, the economist who worked with Intuit to create the Index. “In addition to a steady hiring trend, there is now a solid increase in hours worked and compensation. This means that small business owners are busy, giving their existing employees more work and paying them slightly more.
“At the same time, we see that the hiring rate is up and so is the fraction of hourly people working more than 140 hours per month. When we see the hiring rate go up with roughly the same growth in employment as in previous months, we can infer that people are leaving jobs in small business. This means that small businesses have to find new employees, which is a good sign for activity in the economy overall. The recovery is still slow, but these numbers, when viewed together, show that things are getting better, not worse.”
Small business hourly employees worked an average of 110.2 hours in July, making for an average 25.4-hour workweek. This is a 0.7 percent increase from the revised June figure of 109.5 hours, a clear sign that small businesses have had more work for their employees to do.
Additionally, average monthly pay for all small business employees was $2,682 per month in July, a 0.6 percent increase compared to the June revised estimate of $2,666 per month.
“Through many months of this tepid recovery we saw essentially no movement in either total compensation per employee or the hourly wage. This movement coupled with the rise in employment and the hiring rate means that there is finally competition for workers,” Woodward says.
Also, for the most part, small business job growth continues across most of the country. Hours worked are up across all divisions, another sign that times are getting better for many small businesses nationwide.