Another View of Employment Numbers
Published by Bob Foster
Almost all business people are familiar with the company Intuit, Inc., and the software they offer, as well as their online payroll services. But I only recently discovered that they also publish a monthly Small Business Employment Index, based primarily on the data they have on the 50,000 small business payroll customers they serve.
Each of these customers have fewer than 20 employees, so this is a highly representative statistical sample of small business employment…probably better than the federal government’s numbers.
The Index was developed and is overseen by Dr. Susan Woodward, a nationally recognized economist. Here is what the Small Business Employment Index presents for May 2010:
- Small business employment grew by 0.1 percent, translating into approximately 25,000 new jobs in May. This compares to new jobs in February of 40,000; March of 50,000; and April of 66,000.
- Monthly hours worked declined in May to 101.6 per employee. This translates into an average workweek of 23.5 hours for hourly employees.
- Compensation in May grew by 0.3 percent to $2,566 per month. This translates to about $30,800 per year for all hourly employees.
The good news is that employment is still growing in the small business sector, although May shows a sharp decline in the rate of growth. Let’s hope that May was simply an anomaly and that June will continue to show a more robust growth in employment.
Remember, the Intuit Small Business Employment Index is based on a 50,000 small-business sample of all U.S. businesses with fewer than 20 employees. Also, that this sector makes up 87 percent of all businesses in the U.S.
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2 Responses to “Another View of Employment Numbers”
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Amazing how numbers and facts seem to elude our government officials and media sometimes. The recent “revelation” that the increase of reported job growth was due to the temporary positions of census workers was seen in all actuality, “miles ahead” by everyone else.
As I’ve mentioned before on some of your posts, regarding the lack of true unemployment/underemployment figures is staggering, but that doesn’t seem to make the news either.
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Yes, it seems like the government does operate in some twilight zone at times, and of course the media only knows what they have been told.
It is interesting to note that the Bureau of Labor Statistics gathers most of the appropriate data, but chooses to publish that which shows things in a better-than-reality light. For instance: the government publishes what they call the U3 unemployment data, which is unemployed people who can prove they actually applied for a real job sometime during the prior 4 weeks. This is the “official” unemployment rate, currently at 9.7%.
They also calculate what is labeled as U6 unemployment data, which is a combination of U3 plus all the folks who quit looking and those who did not apply for a job in their line of work during the prior 4 weeks. The U6 unemployment rate is currently at 16.6%, and has been on a consistent trend upwards for the past year (until the census hiring).
However, they don’t include in any of their data the people who are not looking because of illness, family demands, schooling, or who have never had a job, e.g. new graduates, etc. I once researched the unemployment issue and determined that the “real” unemployment rate was closer to 30%, or approximately 3 times greater than the “official” rate.
Thanks for the comment.