Here's what's happened in the small business economy in 2004, based on payroll data for our over 14,000 small business customers.
Small business jobs increased 4.4% in 2004. On average, small businesses increased in size in every month of 2004 except for March when there was a small dip in the average small business size. At the end of the year, the average small business had 5.86 employees.
Average paychecks headed in the opposite direction, decreasing 4.8% over the course of 2004.
More jobs at lower wages sums up the 2004 small business economy. More people were hired in 2004 because small business were hiring. That’s the good news. The bad news is that, on average, small business employees are taking home smaller paychecks than they used to.
Small businesses increased in size in the Northeast and the West in December. In the Midwest and South, small business got smaller on average during December. Looking at average paycheck size, only the Midwest and the West were up in December relative to November. In December, relative to what we saw in November, paychecks in the Northeast and the South were trending downward.
For the entire year, all regions experienced growth in business size except for the Northeast, which declined 3.1% in 2004. The West led the nation in small business growth, increasing by 6.3% in 2004. Gains were milder in the South and Midwest, which clocked in with 1.9% and 0.9% gains respectively.
In 2004, paychecks grew in the Northeast and the South but shrank in the Midwest and West. Interestingly, the West, which had the most small business job growth, also had the biggest hit to average paycheck size, down 7.6% for the year. The South was the only region where businesses grew and paychecks didn’t shrink.
Just as some regions do better than others, states have fared differently as well. We track data in all fifty states but we pay close attention to 21 states that we have earmarked as "benchmark states". Data for our benchmark states is available – just send me an email and let me know if you want the data for your state.
I welcome any and all questions or suggestions regarding our Small Business Scorecard initiative. Feel free to contact me at malter@surepayroll.com or by phone at (847) 676-8420 ext. 7229.
Best regards,
Michael Alter
President
SurePayroll, Inc.
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