SurePayroll's Small Business Scorecard Review
The October payroll data for our over 13,000 small business customers shows some bright signs for the national small business economy.
Each month, we take all of the contractor and employee payments that we've processed — we process nearly $3 billion in payroll payments annually — and aggregate the numbers to see national, regional and state trends in small business hiring, small business salaries, and small business use of independent contractors.
Throughout the year, we've seen small business hiring up, but we've seen the average small business paycheck trending down. Nationally, average paychecks have shrunk by 3.4 percent this year while jobs have increased by 3.2 percent. People have been getting jobs, but the jobs are paying less than they used to on average.
With the October 2004 data, we see a flattening in salary deflation in many areas throughout the country. In some areas, we even see a reversal, with salary averages that were trending down now back on the upswing.
A sound economic recovery has two legs to it. First, we need jobs. Second, we need those jobs to be good jobs. So far, this recovery only had the first leg of economic recovery, but this month's scorecard suggests that we may be on the road to salary improvement, which would potentially make this a true recovery for the small business economy.
That's critically important because small business tend to lead economic recoveries. If the small business recovery stalls out, that's a bad sign for the rest of the economy. Moreover, a continued trend in salary declines could raise the spectre of salary deflation for a significant part of the national workforce.
In the months to come, we will be closely watching the SurePayroll Pay Index to see if salaries are indeed rebounding.
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.
Small Business Scorecards Archive:
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