Wages at American small businesses are up, a new survey from payroll processor Paychex says.
As Yahoo Finance reports, national hourly earnings in April for Paychex’s small business index were $25.67, up a solid 2.7% over the year.
“Growth has accelerated,” Paychex CEO Marty Mucci says. “The last three months, if you annualize it, the wage increase will be around 3%.”
With the unemployment rate below 5%, a level which Fed Chair Janet Yellen has said suggests “full employment,” wages have become an increasingly key barometer in measuring the health of the economy and also the potential future action of the Federal Reserve.
Mucci says minimum wage increases are also helping to move up the wage growth numbers.
However, he adds that his enthusiasm is tempered, as much of the recent growth for small businesses—which make up 95% of all businesses in the U.S.—has come from temporary workers.
“The optimism has waned a little bit because they’re not sure what will get through. And when small businesses are uncertain, they hire less,” he says. “We’re seeing hiring pick up more in part-time positions as a percentage than full-time positions.”
While management teams are looking for clarity on fewer regulations, health care reform and tax reform, Mucci says the key priority is the regulatory environment.
“Number one is less regulations because they need less red tape,” Mucci says. “They don’t have the number of people to comply with all these regulations, so they really need speed and less things they have to worry about and do.”
