Small
businesses created 30,000 new jobs in October, but employees are working fewer
hours and making less money. While small business employment grew by 0.14
percent in October, equating to an annual growth rate of 1.7 percent, hours
worked and compensation decreased by 0.2 percent and 0.06 percent,
respectively. These were among the results of the most recent update of the
Intuit Small Business Employment Index, covering the period between Sept. 24
and Oct. 23.
Since
the hiring trend began in October 2009, small businesses have created 660,000
new jobs. The index is based on figures from small businesses with fewer than
20 employees that use Intuit Online Payroll. Based on these latest numbers and
revised national employment data from the Bureau of Labor Statistics, Intuit
revised downward the previously reported growth rate for September to 0.19
percent from 0.3 percent. This equates to 40,000 jobs added in September, down
from a previously reported 65,000 jobs.
“While
small business employment is up in October, it is not up by much,” said Susan
Woodward, the economist who worked with Intuit to create the index. “The
softness of the small business labor market is not much of a surprise. The
breath-holding in Europe over the timing and shape of the Greek bond default
was likely weighing on economic decisions at firms of all sizes here, too, and
delaying at least some purchase decisions. With the new European deal, there is
now hope that this concern will be lifted.”
Small
business hourly employees worked an average of 106.3 hours in October, making
for a 24.5-hour workweek, a 0.2 percent decrease from the revised September
figure of 106.6 hours. Average monthly pay for all small business employees
declined slightly to $2,622 in October, a 0.06 percent decrease compared with
the September revised estimate of $2,623 per month. The equivalent annual wages
would be about $31,500 per year, which is part-time work for many small
business employees.
“The
seasonally adjusted trend in hours worked and compensation has turned down,”
Woodward said. “This is a further sign of softness in the small business labor
market. On the positive side, we do see an increase in the new hire rate and
hourly wages for the approximately 65 percent of small business employees who
are hourly.”
The
Small Business Employment Index is based on aggregate and anonymous online
employment data from approximately 70,000 small business employers, each with
fewer than 20 employees. Intuit reports data for three categories: small
business employment, compensation and hours worked. The index data reflects
monthly employment activity in small businesses, and is adjusted to account for
changes in Intuit’s Online Payroll customer base. The percent change is
measured monthly using the change in employment for existing Online Payroll
customers from one month to the next.
Midmarket News & Reviews 
