There was good news on the unemployment front in July. Last month, the national jobless rate dropped to 5.4%, the lowest level since the start of the pandemic, and 943,000 jobs were added to the economy.
Small business hiring definitely helped fuel that trend. In fact, a new report by Paychex reveals that small businesses seem to be in pretty good shape, as measured by hiring activity.
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Hiring was up in July
In July, the Small Business Jobs Index rose 0.85% compared to June. That may seem like a modest increase, but actually, it represents the second-strongest one-month increase since 2010, when the economy was in the midst of recovering from the Great Recession.
The index is also up more than 1% compared to the first quarter of the year, and it’s up 5% from the same time period last year. That suggests small businesses are in much better shape now than they were earlier in the pandemic.
Not only did small businesses do more hiring, but they also upped their wages. Hourly earnings growth rose to 3.11% in July compared to 2.84% in June.
Another thing worth noting is that small business job growth improved on a national level. That said, the South led the way in added hiring. And among all states, Arizona saw the most small business job growth.
The upside of working for a small business
With these increases, there’s lots of opportunity to work for a small business these days. But is that a risky move at a time when the economy isn’t fully recovered from the pandemic?
Not necessarily. While small businesses may not have the same vast resources that larger companies have, many are adept at managing their money — they need to be to survive. Plus, in today’s economy, many consumers are making a point to support local businesses, so there’s no need to be scared to take a job at one.
Plus, if the economy does take a turn for the worse, there’s a good chance small businesses will be entitled to additional aid. That’s been the case since the start of the pandemic.
Working for a small business can also mean getting more relevant, hands-on experience than what a larger company might provide. It’s true that some small businesses may not offer the same benefits as larger companies. But what workers lose in perks and even salary, they might gain in flexibility and a better work-life balance. Besides, plenty of small businesses pay just as well as larger ones. Some even pay more.
The fact that small businesses are doing more hiring is a positive thing at a time when so many Americans are still out of work and about to lose their boosted jobless benefits (the extra $300 a week that’s in place in some states expires in early September). And seeing as how it’s unlikely that another round of stimulus checks will hit Americans’ bank accounts, any increase in hiring is positive news.
View more information: https://www.fool.com/the-ascent/personal-finance/articles/new-report-small-business-hiring-is-on-the-rise/