Donald W. Patterson
News & Record
May 30, 2004

Here's another sign that the economic recovery has begun.

A national payroll outsourcing service reports that small businesses in much of the country, including North Carolina, added employees in the first quarter of 2004.

At the same time, they reduced their reliance on temporary, or contract, help.

"To me, this suggests (that) small businesses are now starting to hire again and are more comfortable switching people from independent contractor to employee status," said Michael Alter, president of SurePayroll, the largest online payroll provider in the country. "Hopefully, this bodes well for future hiring numbers."

But data provided by SurePayroll shows that small businesses in North Carolina, while adding employees, didn't grow as much as the nation as a whole.

What's more, wages for that sector in the state actually declined.

According to the company's data for North Carolina, small business employment grew by 1.69 percent over the previous quarter compared with 2.3 percent for the United States.

The average small business in the state now has just over four employees versus 5.5 nationally.

The company says there are approximately 175,000 small businesses in the state.

Unfortunately, small-business salaries in North Carolina dropped by 2.43 percent when compared with a year earlier. Nationally, pay grew by 2.2 percent.

Why the decline in the state?

"My hunch is that North Carolina companies are seeing business improvements in terms of customers and revenues, but they are not taking that out of the business as salary," said Ken Gaebler, a spokesman for SurePayroll. "Instead, they are likely investing for the future by investing in things like equipment and computers."

Gaebler said the average paycheck increased in more than half the states.

For the United States, the average small business salary is $30,911 compared with $26,000 for North Carolina.

Copyright © 2004. News & Record.