Job growth at American small businesses continues to slow as wages trend the opposite way. That’s the finding from the latest Paychex | IHS Markit Small Business Employment Watch for December.
December 2017 Small Business Employment Statistics
The Paychex index uses a standard of 100. Anything below that figure shows a decline in job growth. In December, the Paychex index stood at 99.70. December marked the fifth consecutive month the index was below 100, falling from 99.86 since November.
Wages at small business jobs continue to increase, however, which is in line with the national trend. American wages in 2017 actually went up, on average. They gained 70 cents over last year, according to the Paychex information, and were at $26.14 hourly in December.
However, there’s a potential game changer on the horizon according to one expert.
“While small business jobs growth slowed this year, it’s important to recall that small businesses led the hiring surge coming out of the recession and maintained high levels of growth for quite some time,” said Martin Mucci, Paychex president and CEO in a the release release announcing December’s stats. “It will be interesting to see the impact tax reform makes on job and wage growth in the months ahead.”
Wages should continue to climb, on average. At the beginning of the year, the minimum wage in 18 states and 20 local municipalities rose. It should be noted that wages went up across the country prior to the new minimum wage laws taking effect.
Regionally, the South was the only location with an index score above 100 for job growth. It had the best monthly ranking all through last year. The West was first for hourly wage growth. The Midwest ranked last for hours worked and earnings.
Small business job growth at the state level was led by Tennessee with Washington second and Florida in third position. Missouri (97.43) is in last after three steep declines in a row.
Seattle was first among major cities, scoring a 102 on the Paychex index.
The Paychex | IHS Markit Small Business Employment Watch is released monthly from Paychex, Inc. It draws from the payroll data of 350,000 Paychex clients.
This means that businesses are now focusing more on quality than quantity. This means that they are willing to pay talented and loyal employees more.