Tennessee leads in small business growth, study shows

Tennessee leads in small business growth, study shows

September 4th, 2019 by Dave Flessner in Breaking News

Josh Ball, a human resources senior specialist at DENSO, speaks with Larry Luttrell during a job fair put on by EPIC Talent Solutions Wednesday, August 22, 2018 at the Chattanooga Times Free Press in Chattanooga, Tennessee. DENSO was at the event to hire a variety of employees including, but not limited to individuals with production, engineering or accounting backgrounds.

Photo by Erin O. Smith

Tennessee led all states in employment growth among small businesses in the past year, growing jobs among employers surveyed by the payroll firm Paychex  by 2.77% in the past 12 months.

The new Paychex | IHS Markit Small Business Employment Watch measuring employment growth among small businesses fell in most states as the U.S. economic recovery entered a record 10th year this summer. At 98.01, the national jobs index fell 1.22 percent year-over-year drop in the rate of small business job growth.

Amid the tight labor market, hourly earnings grew nationwide by 2.61% in the past 12 months, or 69 cents an hour, while weekly hours worked showed positive growth for the first time in 2019.

In Tennessee, hourly earnings in the past year grew by 3.21% to $24.43 an hour, ranking Tennessee No. 4 among the 50 states for wage growth.

In Georgia, wages grew 2.26% in the past 12 months but were still higher than Tennessee at an average of $26.02 an hour. Employment growth in Georgia was down 2.63% in the past year similar to the nationwide drop, according to the Paychex surveys.

"The jobs index has fallen since early 2017," said James Diffley, chief regional economist at IHS Markit. "In 2019, we've seen a continuation of that slowdown."

Martin Mucci, Paychex president and CEO, said small businesses "are adapting to the challenges of the tight labor market by increasing hours and earnings" to attract workers to fill their vacancies.

"In August, we saw an increase in weekly hours worked, as well as higher hourly earnings growth compared to this time last year," he said.

Among the nation's biggest cities, Dallas is again the top metro for job growth; San Diego maintains its lead among metros in wage growth.