Tennessee continued to lead all states in employment growth among small businesses in the past year, growing jobs among employers surveyed by the payroll firm Paychex by 2.11% in the past 12 months.
The new Paychex | IHS Markit Small Business Employment Watch measuring employment growth among small businesses fell in the second half of the year in most states after the U.S. economic recovery entered a record 10th year this summer. At 98.16, the national jobs index fell 0.73% year-over-year drop in the rate of small business job growth.
"Small business job gains have flattened in the second half of the year as labor markets prove very tight," said James Diffley, chief regional economist at IHS Markit. "In response, weekly earnings have accelerated."
Amid the tight labor market, hourly earnings grew nationwide by 3.07% to a average of $27.64 an hour, up 82 cents an hour in the past year.
In Tennessee, hourly earnings in the past year grew even more, rising 3.81% to $24.76 an hour, ranking Tennessee No. 4 among the 50 states for wage growth.
Tennessee was the only state to sustain its small business employment growth at the end of 2019. Tennessee has led the nation in small business employment growth for five consecutive months, Paychex data shows.
Top states for small business job growth
The job index fell below 100 in every state except Tennessee in December 1. Tennessee, up 2.11% in the past year 2. Texas, down 0.12% in the past year 3. Arizona, down 0.56% in the past year 4. Florida, down, 0.14% in the past year 5. Pennsylvania, up 1.55% in the past year Source: Paychex/IHS Markit
Combined with longer workweeks in the past year, weekly earnings grew even more than hourly wages for most workers in the past year to a new record high. Hours worked in December nationwide posted the strongest gains since 2012 in the Paychex surveys of small businesses, boosting overall weekly earnings by 4.13% year over year in December.
"The new high seen in weekly earnings growth this month is certainly positive news for the employees of small businesses," said Martin Mucci, Paychex president and CEO. "Not only are businesses raising wages, but they're also increasing hours for their current employees, a sure sign employers are responding to the pressures of the tight labor market."
The South remained the leading region for small business employment growth, while the West continues as the top region for hourly earnings growth.
The Paychex data showed that employers in leisure and hospitality granted the biggest earnings gains for their workers in the past year, boosting both wages and workweeks for most employees.
The wage and employment figures reflect data collected by Paychex, which serves approximately 670,000 payroll clients across more than 100 locations in the U.S. and Europe, and pays one out of every 12 American private sector employees.
Top states for hourly wage growth
1. New York, up 4.43% in the past year to $28.19 2. California, up 4.29%in the past year to $30.06 3. Illinois, up 3.89% in the past year to $30.12 4. Tennessee, up 3.81% in the past year to $24.76 5. Massachusetts, up 3.24% in the past year to $31.16 Source: Paychex/IHS Markit
Contact Dave Flessner at firstname.lastname@example.org or at 757-6340