Robert Mullins
San Francisco Business Times
March 3, 2005

Despite complaints that California's tax and regulatory burden makes it hard for small businesses to succeed here, a new survey out Thursday ranked the Golden State as one of the best states for small businesses.

The SurePayroll Inc. survey listed California second, following Virginia, among the 50 states in terms of small business hiring and employee pay.

The Chicago-based small-business payroll service tracked the number of employees hired by businesses with fewer than 100 employees. In February 2005 small business employment rose by 4.38 percent in its index. But for California, employment rose by 8.6 percent. The hiring index was basically flat compared to January 2005, meaning there has been little new hiring.

While American small businesses hired more people, the average salary they paid was lower. California's pay index fell more than the national average, the company said.

California ranked number two because while businesses hired more people, their payroll expenses were less than at the beginning of last year. The average California small business had 5.6 employees and their average pay was $30,900 a year.

Copyright © 2005. San Francisco Business Times.