Survey Shows Wage Growth Slowing for Small Businesses

A recent Paychex Small Business Employment Watch survey indicates that hourly earnings growth for small businesses has dropped to 2.89% in August, marking the first decline below 3% since January 2021. While some business owners report a stabilization in wage growth, others, like Albert Brenner, have not observed any deceleration and are still grappling with inflation and supply chain issues. The national jobs index saw a minor increase, yet it reflects nominal year-over-year job losses. Business owners express concern over labor costs, which constitute a significant portion of their budgets, and emphasize the need for competitive wages to retain skilled workers. The state of the labor market suggests a shift closer to pre-pandemic conditions, although challenges remain for many industries. Overall, while there may be signs of relief in wage growth, the high cost of labor continues to pressure small business operators.