For the first time since January 2013, U.S. small businesses saw a slight decline in employment, according to the July Intuit Small Business Employment and Revenue Indexes. July small business employment dropped 0.05 percent, equating to 10,000 jobs for businesses with less than 20 employees. But fear not, the picture may not be as discouraging as it currently looks.
“Generally speaking, the recovery for small businesses has been slower and bumpier than for big businesses, which generally see smoother trends,” said Susan Woodward, the economist who worked with Intuit to create the indexes. What this means is that a decline one month for small business employment can take a turn for the better next month, or the month after.
And despite the overall drop in compensation, Woodward said, the wage for hourly workers is up by two cents per hour, to $15.68. The hiring rate is also up slightly, continuing a gradual rise that began in November 2012.
Of the 36 states tracked by Intuit’s Small Business Employment Index, 22 showed employment gains, while 13 saw declines and one remained flat. Missouri saw the greatest employment gain, at 0.12 percent, while Oklahoma saw the greatest decline, at 0.07 percent.
California plays a big part in the employment decrease. While the state is not the only state to see an employment decline, or even to see the biggest percentage decline, it is the largest state in terms of both population and employment, so a decline in California has a big influence on national figures.
Meanwhile, small business revenues have declined 2.5 percent on a per-business basis from their peak in November 2012. It’s unclear why revenues are dropping across industries, Woodward said, but we can partly attribute the decline in revenues per business in the real estate sector to more real estate agents entering the market, taking business from existing agents. Across industries, construction is the only sector that has not seen a decline in per-business revenues.