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Small Business Wage Growth Moderates as 2022 Closes

Small Business Wage Growth Moderates as 2022 Closes
PR Newswire
ROCHESTER, N.Y., Jan. 3, 2023

Paychex data also reveals that small business job growth remains steady
ROCHESTER, N.Y., Jan. 3, 2023 /PRNewswire/ — The rate of hourly wage growth for …

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1 year ago

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Small Business Wage Growth Moderates as 2022 Closes

PR Newswire

ROCHESTER, N.Y., Jan. 3, 2023

Paychex data also reveals that small business job growth remains steady

ROCHESTER, N.Y., Jan. 3, 2023 /PRNewswire/ -- The rate of hourly wage growth for U.S. small businesses continued to decline to 4.95 percent year-over-year in December, according to the latest Paychex | IHS Markit Small Business Employment Watch. Additionally, the Small Business Jobs Index which measures national employment growth for businesses with fewer than 50 workers remained unchanged from the previous month at 99.38.

"The Paychex | IHS Markit Small Business Jobs Index flattened in December, following nine-months of moderation. Additionally, small business hourly wage growth is starting to slow as the Fed takes measures to fight inflation," said James Diffley, chief regional economist at IHS Markit.

"Despite various headwinds including inflation, difficulties in staffing, and changing regulations, U.S. small businesses have continually proven to be innovative and resilient through the challenges presented to them since the start of the pandemic," said John Gibson, Paychex president and CEO. "As we enter 2023, small business owners and their employees are working more hours and finding ways to deal with inflation and higher credit costs."

In further detail, the December report showed:

  • At 99.38, the December 2022 national jobs index was unchanged from the previous month and remains a full point higher than the monthly average during the year leading up to the pandemic (March 2019 - February 2020).
  • Hourly earnings growth year-over-year slowed to 4.95 percent in December, its weakest level since March 2022.
  • One-month annualized hourly earnings growth was below four percent for the third time during the past four months.
  • At 0.48 percent, one-month annualized weekly hours worked growth was positive for the fourth consecutive month.
  • Leisure and hospitality continue to rank first among sectors in hourly earnings growth (6.75 percent) and last in weekly hours worked growth (-0.52 percent).
  • The jobs index in the South improved for the third consecutive month, increasing to 100.72. The South has led the pace of small business growth among regions for the past nine months.
  • Tennessee improved 3.20 percent in 2022, representing the highest growth rate among states. Although Tennessee ranked last among states one year ago in December 2021, the state now ranks seventh at 100.34.
  • Houston (102.75) and Dallas (102.08) have the two strongest jobs indexes among metros for the seventh consecutive month.

Paychex solutions reach 1 in 12 American private-sector employees, making the Small Business Employment Watch an industry benchmark. Drawing from the payroll data of approximately 350,000 Paychex clients with fewer than 50 employees, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity.

The complete results for December, including interactive charts detailing all data, are available at www.paychex.com/watch. Highlights are available below. 

National Jobs Index

  • At 99.38, the December 2022 national jobs index was unchanged from the previous month.
  • The national jobs index slowed 1.54 percent during the past 12 months but has leveled off in recent months to end 2022.

National Wage Report

  • Hourly earnings growth over the previous 12 months slowed to 4.95 percent in December, its weakest level since March 2022.
  • One-month annualized weekly earnings growth was below four percent for the third time during the past four months.
  • At 0.48 percent, one-month annualized weekly hours worked growth was positive for the fourth consecutive month. 12-month weekly hours worked growth (-0.27 percent) remains negative, however, for the 20th consecutive month.

Regional Jobs Index   

  • The jobs index in the South improved for the third consecutive month, increasing to 100.72. The South has led the pace of small business growth among regions for the past nine months.
  • Ranked first among regions last December at 101.22, the West region slowed 2.52 percent during 2022 and now ranks lowest among regions at 98.67.

Regional Wage Report   

  • At 5.50 percent, the South is the only region with hourly earnings growth above five percent and has had the strongest rate for the past three quarters.
  • The South has ranked first among regions in earnings growth and last in hours worked growth for the past quarter. Conversely, the Northeast has ranked last in earnings growth and first in hours worked growth for the past seven months.
  • Weekly earnings growth in the West quickly slowed during the past two months to 4.48 percent in December. One-month annualized weekly earnings growth in the West was below two percent in both November and December.

State Jobs Index

  • North Carolina (102.26) and Texas (101.96) continue to lead states in the rate of small business job growth by a wide margin in December.
  • Tennessee's index (100.34) improved 3.20 percent in 2022, representing the highest growth rate among states. Tennessee ranked last among states in December 2021 and now ranks seventh at 100.34.
  • West Coast states Washington (-3.03 percent) and California (-2.92 percent) have the weakest 12-month change rates among states.
  • Of the twenty states analyzed, ten states increased and ten states decreased in December.

Note: Analysis is provided for the 20 largest states based on U.S. population.

State Wage Report

  • Florida (6.44 percent) leads states in hourly earnings growth, followed by Missouri and Texas, which also have growth above six percent.
  • Virginia (3.35 percent) ranks last among states in hourly earnings growth for the seventh consecutive month.
  • Likely an impact of from Hurricane Ian, one-month annualized weekly hours worked growth spiked to 4.32 percent in Florida, the highest rate in more than two years. For context, Florida's result is two and half times higher than the next state, New Jersey at 1.73 percent.

Note: Analysis is provided for the 20 largest states based on U.S. population.

Metropolitan Jobs Index 

  • Houston (102.75) and Dallas (102.08) have the two strongest jobs indexes among metros for the seventh consecutive month.
  • Riverside slowed 0.79 percent from last month and 4.48 percent from last year as its index fell to last place among metros (96.90).
  • With the exception of a 0.02 percent uptick in September, Minneapolis slowed every month in 2022 for a total decline of 4.13 percent. Minneapolis closed 2021 with an index of 103.63 and 2022 with an index of 99.35.

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Metropolitan Wage Report

  • Miami tops metros in both hourly earnings growth (6.61 percent), as well as weekly earnings growth (6.27 percent).
  • San Francisco ($39.45/hour) and Washington ($38.73/hour) have the highest hourly rates among metros by a wide margin, but rank in the bottom three for growth in December.
  • Weekly earnings growth in Detroit slowed to 3.09 percent, weakest among metros. One-month weekly earnings annualized growth in Detroit fell to its lowest level since 2020, -1.76 percent.
  • San Francisco is the only metro with positive weekly hours worked growth (0.04 percent).

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Industry Jobs Index

  • Despite falling 5.32 percent in 2022, the leisure and hospitality jobs index remains strong at 100.06 and improved slightly once again in December.
  • Education and health services (100.09) trails only other services for the top-ranked index and also boasts the strongest one-month (0.18 percent) and 12-month (0.30 percent) change rates among sectors.
  • The pace of small business job growth has been very consistent in the construction sector (98.41) as its index has been between 98 and 99 for 20 straight months.

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The other services (except public administration) industry category includes religious, civic, and social organizations, as well as personal services, including automotive and household repair, salons, dry cleaners, and other businesses.

Industry Wage Report 

  • Leisure and hospitality continue to rank first among sectors in hourly earnings growth (6.75 percent) and last in weekly hours worked growth (-0.52 percent).
  • Leisure and hospitality was the only sector to report an increase in hourly earnings growth from November to December.
  • At 4.08 percent, education and health services reported the weakest hourly earnings growth for the 15th consecutive month.
  • Construction is the only sector with positive weekly hours worked growth (0.14 percent) and has ranked first among sectors since March 2022.

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The other services (except public administration) industry category includes religious, civic, and social organizations, as well as personal services, including automotive and household repair, salons, dry cleaners, and other businesses.

For more information about the Paychex | IHS Markit Small Business Employment Watch, visit www.paychex.com/watch and sign up to receive monthly Employment Watch alerts.

*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.

About the Paychex | IHS Markit Small Business Employment Watch

The Paychex | IHS Markit Small Business Employment Watch is released each month by Paychex, Inc., a leading provider of integrated human capital management software solutions for human resources, payroll, benefits, and insurance services, and IHS Markit, a world leader in critical information, analytics, and expertise. Focused exclusively on small business with fewer than 50 employees, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful tool delivers real-time insights into the small business trends driving the U.S. economy.

About Paychex

Paychex, Inc. (Nasdaq:PAYX) is a leading provider of integrated human capital management solutions for human resources, payroll, benefits, and insurance services. By combining innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers business owners to focus on the growth and management of their business. Backed by 50 years of industry expertise, Paychex serves more than 730,000 payroll clients as of May 31, 2022 in the U.S. and Europe, and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting www.paychex.com and stay connected on Twitter and LinkedIn. 

About IHS Markit (www.ihsmarkit.com)

IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world's leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2021 IHS Markit Ltd. All rights reserved.

Media Contacts
Chris Muller
Paychex, Inc.
+1 585-338-4346
cmuller@paychex.com 
@Paychex 

Kate Smith
IHS Markit
+1 781-301-9311
katherine.smith@ihsmarkit.com 

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SOURCE Paychex, Inc.

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One city held a mass passport-getting event

A New Orleans congressman organized a way for people to apply for their passports en masse.

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12 hours ago

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March 15, 2024

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While the number of Americans who do not have a passport has dropped steadily from more than 80% in 1990 to just over 50% now, a lack of knowledge around passport requirements still keeps a significant portion of the population away from international travel.

Over the four years that passed since the start of covid-19, passport offices have also been dealing with significant backlog due to the high numbers of people who were looking to get a passport post-pandemic. 

Related: Here is why it is (still) taking forever to get a passport

To deal with these concurrent issues, the U.S. State Department recently held a mass passport-getting event in the city of New Orleans. Called the "Passport Acceptance Event," the gathering was held at a local auditorium and invited residents of Louisiana’s 2nd Congressional District to complete a passport application on-site with the help of staff and government workers.

A passport case shows the seal featured on American passports.

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'Come apply for your passport, no appointment is required'

"Hey #LA02," Rep. Troy A. Carter Sr. (D-LA), whose office co-hosted the event alongside the city of New Orleans, wrote to his followers on Instagram  (META) . "My office is providing passport services at our #PassportAcceptance event. Come apply for your passport, no appointment is required."

More Travel:

The event was held on March 14 from 10 a.m. to 1 p.m. While it was designed for those who are already eligible for U.S. citizenship rather than as a way to help non-citizens with immigration questions, it helped those completing the application for the first time fill out forms and make sure they have the photographs and identity documents they need. The passport offices in New Orleans where one would normally have to bring already-completed forms have also been dealing with lines and would require one to book spots weeks in advance.

These are the countries with the highest-ranking passports in 2024

According to Carter Sr.'s communications team, those who submitted their passport application at the event also received expedited processing of two to three weeks (according to the State Department's website, times for regular processing are currently six to eight weeks).

While Carter Sr.'s office has not released the numbers of people who applied for a passport on March 14, photos from the event show that many took advantage of the opportunity to apply for a passport in a group setting and get expedited processing.

Every couple of months, a new ranking agency puts together a list of the most and least powerful passports in the world based on factors such as visa-free travel and opportunities for cross-border business.

In January, global citizenship and financial advisory firm Arton Capital identified United Arab Emirates as having the most powerful passport in 2024. While the United States topped the list of one such ranking in 2014, worsening relations with a number of countries as well as stricter immigration rules even as other countries have taken strides to create opportunities for investors and digital nomads caused the American passport to slip in recent years.

A UAE passport grants holders visa-free or visa-on-arrival access to 180 of the world’s 198 countries (this calculation includes disputed territories such as Kosovo and Western Sahara) while Americans currently have the same access to 151 countries.

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Fast-food chain closes restaurants after Chapter 11 bankruptcy

Several major fast-food chains recently have struggled to keep restaurants open.

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15 hours ago

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March 15, 2024

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Competition in the fast-food space has been brutal as operators deal with inflation, consumers who are worried about the economy and their jobs and, in recent months, the falling cost of eating at home. 

Add in that many fast-food chains took on more debt during the covid pandemic and that labor costs are rising, and you have a perfect storm of problems. 

It's a situation where Restaurant Brands International (QSR) has suffered as much as any company.  

Related: Wendy's menu drops a fan favorite item, adds something new

Three major Burger King franchise operators filed for bankruptcy in 2023, and the chain saw hundreds of stores close. It also saw multiple Popeyes franchisees move into bankruptcy, with dozens of locations closing.

RBI also stepped in and purchased one of its key franchisees.

"Carrols is the largest Burger King franchisee in the United States today, operating 1,022 Burger King restaurants in 23 states that generated approximately $1.8 billion of system sales during the 12 months ended Sept. 30, 2023," RBI said in a news release. Carrols also owns and operates 60 Popeyes restaurants in six states." 

The multichain company made the move after two of its large franchisees, Premier Kings and Meridian, saw multiple locations not purchased when they reached auction after Chapter 11 bankruptcy filings. In that case, RBI bought select locations but allowed others to close.

Burger King lost hundreds of restaurants in 2023.

Image source: Chen Jianli/Xinhua via Getty

Another fast-food chain faces bankruptcy problems

Bojangles may not be as big a name as Burger King or Popeye's, but it's a popular chain with more than 800 restaurants in eight states.

"Bojangles is a Carolina-born restaurant chain specializing in craveable Southern chicken, biscuits and tea made fresh daily from real recipes, and with a friendly smile," the chain says on its website. "Founded in 1977 as a single location in Charlotte, our beloved brand continues to grow nationwide."

Like RBI, Bojangles uses a franchise model, which makes it dependent on the financial health of its operators. The company ultimately saw all its Maryland locations close due to the financial situation of one of its franchisees.

Unlike. RBI, Bojangles is not public — it was taken private by Durational Capital Management LP and Jordan Co. in 2018 — which means the company does not disclose its financial information to the public. 

That makes it hard to know whether overall softness for the brand contributed to the chain seeing its five Maryland locations after a Chapter 11 bankruptcy filing.

Bojangles has a messy bankruptcy situation

Even though the locations still appear on the Bojangles website, they have been shuttered since late 2023. The locations were operated by Salim Kakakhail and Yavir Akbar Durranni. The partners operated under a variety of LLCs, including ABS Network, according to local news channel WUSA9. 

The station reported that the owners face a state investigation over complaints of wage theft and fraudulent W2s. In November Durranni and ABS Network filed for bankruptcy in New Jersey, WUSA9 reported.

"Not only do former employees say these men owe them money, WUSA9 learned the former owners owe the state, too, and have over $69,000 in back property taxes."

Former employees also say that the restaurant would regularly purchase fried chicken from Popeyes and Safeway when it ran out in their stores, the station reported. 

Bojangles sent the station a comment on the situation.

"The franchisee is no longer in the Bojangles system," the company said. "However, it is important to note in your coverage that franchisees are independent business owners who are licensed to operate a brand but have autonomy over many aspects of their business, including hiring employees and payroll responsibilities."

Kakakhail and Durranni did not respond to multiple requests for comment from WUSA9.

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Industrial Production Increased 0.1% in February

From the Fed: Industrial Production and Capacity Utilization
Industrial production edged up 0.1 percent in February after declining 0.5 percent in January. In February, the output of manufacturing rose 0.8 percent and the index for mining climbed 2.2 p…

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March 15, 2024

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From the Fed: Industrial Production and Capacity Utilization
Industrial production edged up 0.1 percent in February after declining 0.5 percent in January. In February, the output of manufacturing rose 0.8 percent and the index for mining climbed 2.2 percent. Both gains partly reflected recoveries from weather-related declines in January. The index for utilities fell 7.5 percent in February because of warmer-than-typical temperatures. At 102.3 percent of its 2017 average, total industrial production in February was 0.2 percent below its year-earlier level. Capacity utilization for the industrial sector remained at 78.3 percent in February, a rate that is 1.3 percentage points below its long-run (1972–2023) average.
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Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and above the level in February 2020 (pre-pandemic).

Capacity utilization at 78.3% is 1.3% below the average from 1972 to 2022.  This was below consensus expectations.

Note: y-axis doesn't start at zero to better show the change.


Industrial Production The second graph shows industrial production since 1967.

Industrial production increased to 102.3. This is above the pre-pandemic level.

Industrial production was above consensus expectations.

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