SurePayroll's Small Business Scorecard Review
The payroll data for our over 13,000 small business customers is in and we’ve crunched the data to determine what’s happening in the small business economy.
The trend is very similar to what we’ve seen throughout the year. Small businesses are hiring more, but they are paying people less money on average relative to what they used to pay in the past.
Understanding the SurePayroll Indices
Starting this month, we’ve adjusted the SurePayroll Indices to be monthly economic indicators and
we will begin posting our data on a monthly, rather than quarterly basis. We calculate the indices
based on a rolling twelve-month average to eliminate the effects of seasonality.
The SurePayroll Hiring Index concisely presents trend data on small business hiring, doing so with a single number. We started with January 1, 2004 as our base and we use 10,000 as the base index number.
The SurePayroll Pay Index tracks how much the folks who work for small businesses are getting paid. We started with January 1, 2004 as our base and use 1,000 as the base index number.
This Month’s Results
The SurePayroll Hiring Index continues to track a strong recovery in small business hiring. Year to date,
we have gained 252 index points and the index now stands at 10,252. Long story short, hiring is up at small
businesses.
Unfortunately, salaries are trending in the opposite direction. The SurePayroll Pay Index is down 33 points for the year to 967. The average small business employee earned a little bit less in September than they did in August. That’s been the trend in the second half of 2004. Small business salaries were fairly flat in the first half of the year but they’ve been going down in the second half.
If salary numbers continue to trend downward, we may find that a significant portion of the economy may be dealing with the troubling challenge of salary deflation. To my mind, that’s a non-recovery. On the other hand, if we see salaries turn around and trend upward, history will show that small business workers are currently participating in a healthy recovery that sees more small business workers employed at salaries that give them purchasing power similar to what they’ve had in the past.
The bottomline? It’s too early to tell what’s happening. We need to watch the small business employment and salary numbers in the months and quarters to come. Interestingly, as the Presidential candidates enter the final stretch prior to the elections, it seems that from a small business perspective the jury is still out on whether this is a healthy recovery or an artificial economic spike that cannot sustain itself. We won’t know how the small business economy is really doing until after the election.
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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