Paychex Report Shows Weekly Earnings Growth at Record High
Throughout the year the big story in the world of small businesses has been the competitive hiring field. With the United States’ unemployment rate remaining at historic lows, many businesses have reported being unable to fill open positions and, in turn, increased their wages in a bid to attract top talent. Sure enough a new report from the payroll company Paychex shows continued wage growth for small business employees as 2019 comes to a close.
According to Paychex’s data, the average wage among small business employees rose to $27.64 in December. That puts the 12-month wage growth at 3.07%, increasing a total of 82¢ over the past year. Incidentally these figures are right in line with the latest Labor Department numbers released last month that showed the average wage reaching $27.30 and marking a 3.1% year over year gain.
What’s more, thanks in part to December posting the largest gains in hours worked since 2012, weekly earnings reached a new all-time high. Growth in weekly earnings for the month showed a 4.13% year-over-year gain compared to the 3.87% YOY seen in November. Interestingly California and New York saw the greatest increases in both hourly and weekly earnings among the 20 largest states. Each showed gains above 4% for hourly wages and increases exceeding 5% for weekly earnings. Meanwhile these figures were each below 2% in Texas and Arizona, leaving them at the bottom of heap.
Summarizing this month’s report, IHS Markit chief regional economist James Diffley remarked, “Small business job gains have flattened in the second half of the year as labor markets prove very tight. In response, weekly earnings have accelerated, surging from 2.49% mid-year to 4.13% at year-end.” Paychex president and CEO Martin Mucci added, “The new high seen in weekly earnings growth this month is certainly positive news for the employees of small businesses. Not only are businesses raising wages, but they’re also increasing hours for their current employees, a sure sign employers are responding to the pressures of the tight labor market.”
All in all, while times may have gotten tough for small business owners throughout 2019 as they struggled to compete for employees, one has to imagine that the expanding economy mostly helped make up for that. As for workers, it seems that the labor crunch has been a benefit as evidenced by the rising wages. Finally, with the 2010s about to cap off a recessionless decade, it seems only appropriate that it would go out with another record to its name.