Small business employment continued to show encouraging growth in January, with hours worked showing a strong increase as wages grew slightly, according to a recent survey.
Small business employment grew by 0.3 percent in January, equating to an annual growth rate of more than 4 percent, according to this month's Intuit Inc. Small Business Employment Index. The percentage translates to approximately 70,000 new jobs created nationwide. The index is based on figures from the country’s smallest businesses that use Intuit Online Payroll.
“This month’s numbers are stronger than last month and they look better in every category. These job gains contrast sharply with mild job gains for the overall economy", Woodward said. "As small businesses generally recover sooner than big businesses, this continued growth is quite encouraging for economic recovery.”
Based on this latest data, the employment growth rate for December was revised upward to 0.4 percent, equating to 80,000 jobs added for the month and a nearly 5 percent annual growth rate. Since the growth trend first began in October 2009, small business jobs have increased by a revised estimate of just over 1 million.
Hours worked up; slight increase in compensation
Small business hourly employees worked an average of 108.1 hours in January, translating to a 24.9-hour work week. This is a 0.6 percent increase from the revised December figure of 107.4 hours.
“It is not just the employment figures that are encouraging,” Woodward said. “Hours worked for hourly employees are also up strongly after remaining flat at just under 104 hours per month for most of 2009 and early 2010. It’s now at 108 hours per month, and what’s exciting is that our other data is showing a rise in people working full time at small businesses. Small businesses now employ 22.5 percent full-time employees, compared to a low of 20.4 percent back in January 2010.”
Average monthly pay for all small business employees was $2,619 per month in January, a 0.3 percent increase from the December revised estimate of $2,612 per month. This is just over 3 percent at an annual rate. This translates to wages of about $31,400 per year, which is part-time work for many small business employees.
“While compensation is up slightly in January, it sill reflects a slack labor market with compensation for all employees up only 1 percent over the last year. At an hourly rate, this month’s average pay for small business employees equals about $15.30 per hour, the same as a year ago", Woodward said. "This is still well below the national average of about $20 per hour. This reflects that small businesses use more part-time people than big businesses do and pay them less.”
Small business employment by geography
The index also breaks down employment by census divisions and states across the country, with growth in most regions.
“All divisions continued to show employment growth except for the West North Central division, which continued to see job losses for the seventh month in a row,” said Cameron Schmidt, vice president of Intuit’s Employee Management Solutions division.
“Most states saw increases in employment, with New Jersey achieving the strongest growth over the last four months. This is an about face from last spring and summer when New Jersey was shedding the most jobs,” Schmidt said.
Percent Change in Employment
Small business employment by stateis up for many states across the country with the highest increases month over month in Maryland and Washington. The states above reflect those for which Intuit Online Payroll has more than 1,000 small business firms represented. The month-to-month changes are seasonally-adjusted and informative about the overall economy.
About the Index:
The Intuit Small Business Employment Index is based on aggregate and anonymous online employment data from approximately 58,000 small business employers, each with fewer than 20 employees. These small businesses use Intuit Online Payroll.
About Intuit Inc.:
Intuit Inc. is a provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals. Follow Index News on Twitter: #SMBindex; Intuit on Twitter: www.twitter.com/Intuit.