Paychex reports that small businesses continue to increase their hiring as the economy recovers. This is especially true for the leisure and hospitality sectors.
The Paychex The related Small Business Jobs Index grew 4.53% in the second quarter of 2021. In the second quarter, 12.65% of those working in leisure and hospitality saw their employment increase. Hourly earnings growth grew slightly, from 2.82% in May to 2.84% in June.
Thanks to the wide availability of vaccines, more parts of the country have been rolling back restrictions on businesses, even though low vaccination rates in some states are leading to the spread of the more transmissible Delta variant.
Frank Fiorille from Paychex, vice president for risk management, compliance, and data analytics, stated, "Things seem to be opening up more. People are going back into work."
The hospitality and leisure industry has been experiencing a strong recovery as more bars and restaurants reopen and increase their capacity. Businesses are still struggling to attract employees. People remain afraid of infection, have problems with their children, and continue to rely upon expanded unemployment benefits that pay higher than the minimum wage or tipped wages in many States. Employers in the leisure and hospitality sector have had to raise wages to attract workers.
"When you really look under the hood and dig down deep under the numbers, there's very strong wage growth in that sector," said Firoille. Firoille stated that businesses can pay more to employees to bring them back to work. We are also seeing this in the data.
As a way of bringing back employees, some states have ended the $300 federal government boost to unemployment benefits. Fiorille announced that the unemployment benefit extension, which depends on where you live, will be ending in September.
Despite rising housing prices, the supply chain issues are holding back construction. However, prices for lumber are slowly falling.
Fiorille stated, "On the flip side of it," a sector that continues to underperform is construction. It was down slightly last month and again this month. However, it is still lower than last month. That had been the strongest sector for a very long time, and the correlation we think about is the supply chain and trade issues are suppressing that sector."
The South continues to lead among regions of the country in terms of small-business job growth in June, with job growth in North Carolina spiking 6.36% in the second quarter. Tampa leads the pack in terms job growth, especially for those living in metropolitan areas.
Hourly earnings growth in the West was 3.18%, the strongest among the different regions, while hourly earnings growth in the Northeast slowed to 2.93% in June. With 4.09% hourly earnings growth, Missouri was again the leader in the United States. Massachusetts followed at 3.57% with California at 3.544%. Illinois came last in both hourly earnings growth (1.7%) and weekly earnings development (0.85%). Georgia maintained its position as the most successful state in weekly earnings growth with 3.96%.
Accountants should keep clients of small businesses informed about all developments in Washington. The Paycheck Protection Program is now expired. However, businesses still have access to employee retention credits. Biden's Infrastructure Plan, which is being negotiated with a bipartisan group comprising senators, will provide more employment opportunities for small businesses if passed.
Fiorille says that "there is still a lot to do, depending on your industry and which state you are in and what business you run." "You've got to keep in tune with what is happening because there is a lot going on."