Tennessee leads nation in small business employment growth
Tennessee leads the nation in small business job growth, according to a new payroll survey of small businesses by Paychex Inc.
The Paychex IHS Markit Small Business Employment Watch for May shows the Volunteer State led all states in small business job growth in the past 12 months, growing 0.48% more jobs over the past year. In wage growth, Tennessee ranked 7th highest among the states with an annual growth rate of 2.62%. Hourly earnings among the companies in the survey averaged $24.17 in Tennessee during May.
Tennessee was among only four states showing positive job growth in the Paychex survey. Nationwide, the Paychex study showed relatively stagnant job and wage growth last month.
"The national index has stabilized in 2019, though at a level indicating little expansion by small businesses," said James Diffley, chief regional economist at IHS Markit.
The South continues to lead regions in employment growth with Tennessee and Georgia among the top states. Jim Brown, Tennessee director of the NFIB, said Tennessee's relatively low taxes and regulations make the state attractive for small business growth.
"There is a lot of business out there right now and the biggest complaint we hear from employers in many areas is that they can't find enough workers to keep up with demand," Brown said. "It used to be that rising health care costs always topped our list of concerns. But in the past several years, the top concern has been getting enough qualified workers."
Tennessee's jobless this spring fell to the lowest level in modern history as the economy continued to grow as the recovery approaches its 10th anniversary of sustained growth this month. The state's 3.2% jobless rate in April was well below the U.S. rate of 3.6% and the state's Career Centers continue to list more open jobs than the number of unemployed persons still looking for work in Tennessee.
"Flat job growth this year suggests that small businesses are struggling to compete with larger companies for talent," said Martin Mucci, Paychex president and CEO. "According to our most recent research report, one way that employers can stand out to prospective hires is by focusing on employees' desire for flexibility in when, where, and how they work."
The Small Business Jobs Index provides insight into the small business employment trends driving the U.S. economy. Using aggregated payroll data from businesses with fewer than 50 workers, the index offers a monthly, up-to-date measure of change in small business employment. The top states and their 12-month growth rate are:
Source: Paychex Small Business Employment Watch
Source: Times Free Press, by Dave Flessner
The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org
Published June 7, 2019