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Hourly earnings growth hit new high at end of 2021, Paychex data shows
Hourly earnings growth hit new high at end of 2021, Paychex data shows
Workers saw record hourly earnings growth and small businesses reported rising employment levels at the end of 2021.
This is according to the aggregated payroll data of some 350,000 Paychex clients with fewer than 50 employees, released monthly in the Paychex | IHS Markit Small Business Employment Watch.
The December data shows hourly earnings growth rose to 4.27%, the highest level since reporting began 10 years ago
Hiring at small businesses also ended the year on a high note, with the Small Business Jobs Index improving 7.31% from the prior year and 0.22% for the month.
“Small business employment continues to rise as we end 2021, contributing jobs and rapid earnings growth to our sharp recovery from the COVID-19 downturn,” said James Diffley, chief regional economist at IHS Markit.
“Employers are responding to the pressures of the tight labor market by raising wages and workers are benefiting,” added Martin Mucci, CEO of Rochester-based Paychex.
In further detail, the December report showed:
- Hourly earnings growth and weekly earnings growth are both above 4%. Each measure was at less than 3% growth as recently as June.
- Hourly earnings grew 4.27% during 2021, resulting in an average hourly wage of $30.00.
- Hourly earnings growth exceeded 4% in all regions of the U.S.
- Leisure and hospitality hit double-digit hourly earnings growth (10.69%) to lead all industry sectors.
- The Small Business Jobs Index increased to 100.94 in December, its highest level since August 2014. The rate of growth, however, has slowed for the past two months (0.50% in October, 0.27% in November, and 0.22% in December).
- The West overtook the South as the top region for small business employment growth.
- Texas remained the top state for small business hiring, with Dallas the top metro.
The complete results for December are available at www.paychex.com/watch.
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