New survey shows moderating job and wage growth among small businesses
A new nationwide index of small business job growth and wages is showing the pace of those numbers slowing.
Paychex, the Rochester-based payroll processing and human resources company, along with the company IHS, does a monthly index on the rate of both jobs added and wages at small businesses. In June, both of those metrics moderated a bit.
Paychex CEO Marty Mucci said that is somewhat surprising, because as the unemployment rate has dropped nationwide and the job market has become tighter, you would normally see wages increase somewhat as employers try to attract new workers.
He said part of the reason that didn’t happen may be that a lot of small businesses just aren’t financially in a position to raise salaries right now.
“We did an additional survey of employers and they said that basically, they’re not making enough profits to increase wages, so 65 percent of the employers said they just could not afford a wage increase, another 30 percent said they were investing in other things that were more critical, which were things like automation,” Mucci said.
In terms how the job growth numbers stack up among the various regions in the country, the South saw the strongest growth in June, while the Northeast the weakest.
Mucci said the weaker job growth numbers in states like New York may likely be due in part to people moving out of the state.
“There’s a push of employees out of this area too, so I think you’re seeing growth in the South, growth in the West and you’re seeing more of a migration unfortunately out of the Northeast, so I think that’s impacting the job growth here as well,” he said.
In terms of which sectors of the economy saw the most job gains in June, Mucci said manufacturing and business services saw the strongest job growth.