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Optimism grows; salaries decline

Another source of data suggests small business owners are becoming more optimistic about the economy. According the SurePayroll’s Small Business Scorecard for May, 73% of respondents indicated optimism about small business economy. That’s an improvement from April, when only 66% were optimistic, says SurePayroll’s president, Michael Alter. At the same time, salaries for small business employees declined 3.6%.

The survey randomly tapped the opinions of 267 small business owners in a database of 25,000.

Alter says the optimism translated into a positive read on on small business hiring for May. His company’s hiring index rose 26 points to 11,430 in May, up from 11,404 at the end of April. Year-to-date, the hiring index is up 1.4%, putting small business hiring on track to increase 3.3% for the calendar year, he says.

Alter says that concurrent with the increase in hiring is a decrease in the price of new employees. His company’s payroll index, a proxy economic indicator for the average salary paid by a small business, stands at 992, down from April’s reading of 1,001. The 0.9% drop matches the decline of the previous month—the fourth consecutive month of deep salary cuts.

Year-to-date, salaries are down 3.6%, with an annual average salary of $30,482. In May 2008, it was $32,528. Alter says the driver in declining salaries is in new hires. Business owners are paying less because the supply of qualified available workers is so high.

SurePayroll is an online payroll service for small businesses.

Source: SurePayroll, www.surepayroll.com


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