It turns out that when employers have to compete to hire from a shrinking pool of candidates, wages tend to go up. This phenomenon has had a positive impact on working Americans across the country, according to a report shared by Paychex | IHS Markit Small Business Employment Watch.
Hourly earnings grew 3.11 percent for small business employees – which is “the highest level since reporting began in 2011,” according to a press release distributed Monday. However, it is also important to note that weekly hours worked have gone up 0.76 percent.
Likewise, weekly earnings have continuously been shown to grow, accelerating 3.75 percent in November. The national jobs index remained nearly the same with a moderated 0.03 percent remaining above 98.
"Wage increases are finally beginning to reflect the tight labor market for small businesses," said James Diffley, a chief regional economist at IHS Markit.
Martin Mucci, Paychex’s president and CEO, concurred that the industry is evolving for the market.In his own words: "Employers are responding to the challenges of the tight labor market. We've seen a steady climb in hourly earnings growth, now reaching the highest levels in nearly a decade."
Broken down further, the November report revealed that out of all the U.S. regions, the South “continues to lead regional small business employment growth” with an index of 98.93. The Midwest and the West were shown to have the weakest growth rates for the year, dropping 1.51 percent and 1.30 percent, respectively.
When it comes down to how much workers are making in these regions, the West, Northeast and Midwest all “outpace” the hourly wages earned in the South.
To get more specific, the report said, “The West and Northeast have three-month annualized hourly earnings growth over four percent as gains have accelerated in both regions during the past quarter.”
Employment growth rates changed very little in November among industries, according to the report. Despite this, the industry jobs index showed that “all sectors are now below 100.”
Workers in leisure and hospitality had the highest growth in hourly earnings out of all sectors, leading with 5.16 percent. Manufacturing remained above 4 percent in hourly earnings growth, but the report noted that these gains slowed slightly in November.
Paychex gathered this industry data information from the Bureau of Labor Statistics.