Low Wage Jobs Being Added to Small Businesses

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In early March a report was released that shows that through February, small businesses are continuing to add more and more jobs, however they tend to be lower end positions. The payroll processing firm Intuit, which analyzes the monthly employment data for 700,000 companies with less than twenty employees, stated that 45,000 positions were created in February alone. However, that number is down from the 55,000 created the previous month and even further down from the 60,000 created in February of last year.

 

Ever since 2009, small companies with twenty or less employees have been slowly adding more and more jobs, but they have been primarily low-end, hourly wage positions. Their figures show that the economy seems to be getting better, thought it is creeping very slowly at this time.

 

Susan Woodward, an economist with Sand Hill Econometrics who consults for Intuit, stated that last month's lower increase in hiring was most likely related to persistent softness in the housing and real estate industries. "Real estate construction hasn't fully recovered and the unemployment rate in construction is still high because small businesses account for a large percentage of firms in the housing industry, robust hiring won't happen until housing fully recovers," she said.

 

According to the government, small businesses comprise about 87% of the total U.S. private employer base, with employees numbering over twenty million people. At the time of my writing this, the Labor Department had not released their latest big employment report for February, but they are expecting it to reveal 207,000 jobs being added last month, and the unemployment rate maintaining itself at 8.3%.

 

Based on the reports, Arizona and Washington State are the two regions that seem to be leading the way in small business job growth, while East coast areas like New York and Maryland are still lagging. A rise in consumer spending seems to be behind the increase in Arizona. Donna Davis, CEO of the Arizona Small Business Association said "Consumers are spending more here and business projects have also picked up. Real estate is also a huge sector in Arizona. The worst of the foreclosure crisis is behind us and we're seeing new construction happen."

 

So, things seem to be getting a little better each month, more so in certain areas, but even those increasing numbers are in the lower rate jobs; good news for those looking for a more entry level position.

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