The Taboo against raising wages is still thriving among small businesses
The Taboo against raising wages is still thriving among small businesses
The National Federation of Independent Businesses (NFIB) put out its monthly confidence and hiring reports over the past few days.
The confidence report soared to new high, so the economy is Teh Awesome and happy days are here again! Right?
And look! It’s confirmed by the hiring report, which also shows record high plans to hire new workers:
When it come to, you know, actual hires, small businesses have not added any more workers than they have since 2013. With a big *actual decline* in the month of record desires to hire.
Leading to record numbers of unfilled openings:
Oh.
So what could possibly be behind this market failure, where employers can’t seem to be able to find workers to fill those record openings?
Well, do you see anything in the below chart that sticks out like a sore thumb? You know, the only things with a dash or red arrow:
Yeah. *Lowering* compensation plans, and *zero* actual changes to compensation. That will do the trick.
Forget “monopsony” employers. The Taboo against raising wages is very much alive and thriving in small business.
My I suggest you actually contact small businesses rather than relying on Macro data. Small company in Wisconsin 5 employees in an area being paid 80K, 50K. 30K, 30K, and 30K. average 44K. The Baby Boomer employee retired with promotions and raises the new pay levels became 60K with a 10K raise, 38K with an 8K raise two workers 33K a 10% raise and a new employee was paid 31K. Average 43K.
Result 5 happy employees 4 with raises and one actually has a job.
Anyone looking at wage data need to remember the impact of Demographic data.
Mike:
As a prof., you must have more information than anecdotal comments to rebut NDD, yes?
Michael,
Having asked Daniel Becker (small business owner) he suggested your company is not the most common sort of business. What do you do??
Mike, I get your point, but that also stands that they hired a extra person not on demand, but on retirement. This is a large problem the BLS is having this cycle, which goes into disability fraud and hiring potential. I think small business hiring when compared to job openings is caused by this issue. It means small business hiring “plans” are based around retirement, not wages or growth. When retirement ebbs by the 2022-28 period, data should improve again and be more “reflective” of actual output.
This has been a ugly decade for government data due to the withdrawal. Unemployment is lower than it should be and jolts data is screwed. You have to look into components to get a bigger picture(like mid-level career separations, which are terrible). That said, all government data is political. From 1948, when it began in many respects to present day.