According to the latest Paychex & IHS Markit Small Business Employment Watch report, average hourly wage growth reached 5.18% in August, compared to 5.03% in July 2022, so the pace of wage growth in small businesses in the United States will escalate. continue. Small business hourly wages were $30.71, up $1.51 over the past 12 months.
“Wage growth tends to be a compelling sign that inflation is picking up. It’s possible,” said Martin Mucci, CEO of Paychex, a Rochester, New York-based payroll and HR services software company.
The report, which was extracted from the salary data of approximately 350,000 Paychex clients with less than 50 employees, was a joint project with international analytics firm IHS Markit, part of S&P Global.
Differences by region and industry
Regionally, the August report showed that the South led small business hourly wage growth over the past 12 months, increasing by an average of 5.53%. The Northeast was the only region where hourly wage growth fell below 5% (4.58%).
industry wages
Other services (excluding government) led the industry in annual hourly wage growth at 7.48% in August. One-month and three-month annualized growth rates were higher at 8.07% and 7.84%, respectively.
In contrast, hourly wage growth in leisure and hospitality slowed to 6.37% for the seventh straight month, although the decline in July-August was less steep than the previous month.
Small businesses stay on course
Despite fears of a recession amid resilient inflation, US small businesses are avoiding pay cuts and layoffs as the labor market remains tight.
According to the latest Principal Financial Wellbeing Index survey of 500 U.S. business leaders conducted July 7-20, large companies with 500-10,000 employees %) were more likely to say they were growing (61% of respondents). Small businesses with less than 500 employees. However, nearly half (49%) of SMEs consider their companies stable, compared to 36% of large companies.
“Small businesses have learned a lot from the 2008 recession, and many have learned that they can make adjustments that will minimize the impact on salaries and staff during future periods of economic stress. , an Iowa-based provider of monetary benefits.
“Small businesses are dedicated to their employees,” said Friedrich. “We’ve seen that during the pandemic, and I think we’ll see the same creativity and resilience when the pressure mounts in the near future.”
Satisfaction with annual income
Other recent surveys on the economy and compensation found that the average “reservation wage” (the minimum wage respondents are willing to accept for a new job) continues its annual upward trend, reaching $72,873 in July 2022. , up from $68,954 a year ago. According to the Federal Reserve Bank of New York’s latest SCE labor market survey, released Aug. 22.
The average wage for full-time annual offers received in the last four months increased from $58,469 in July 2021 to $60,764.
Every four months, approximately 1,000 Consumer Expectations Survey (SCE) panelists are asked details about their current or recent work as part of an ongoing survey.
Respondents’ satisfaction with wage compensation at their current job worsened, with 56.9% of respondents saying they were satisfied with their current wages, down from 58.2% last year.
Meanwhile, respondents’ satisfaction with non-wage benefits at their current job improved slightly to 63.2%, up from 62.6% a year earlier.
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