Small businesses are raising wages in historic numbers in an effort to attract and retain workers, the National Federation of Independent Business reported.
The NFIB said on Thursday that half of small-business owners in the United States reported boosting pay last month as they struggled to attract and retain workers. The net 50% is up 2 points from December and represents the highest level since the metric started being tallied nearly five decades ago.
Nearly half of small-business owners, 47%, said they had job openings that they couldn’t fill last month. Of those surveyed, 23% of small-business owners cited labor quality as their top business concern, and 11% said the same about labor costs.
“Small-business owners are managing the reality that the number of job openings exceeds the number of unemployed workers, producing a tight labor market and adding pressure on wage levels,” NFIB Chief Economist Bill Dunkelberg said. “Reports of owners raising compensation continues at record-high levels to attract applicants to their open positions.”
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The Thursday report comes after months of complaints from employers that the tight labor market is making it challenging to find workers. Inflation is also at multidecade highs and is driving up the costs of goods and services, meaning that workers expect to earn more for the labor they perform.
On Friday morning, the hotly anticipated monthly jobs report will be released. The January report is likely to far underperform in comparison with other months because it coincides with the omicron variant’s spike, meaning that millions of people may have been temporarily out of work in January because of the illness, including to take care of sick family members, and thus might be tallied as unemployed.
The White House has been gearing up for the lackluster report, with Brian Deese, the director of the National Economic Council, noting that the numbers might be “confusing” because of the omicron surge and people out sick.
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“We expect that that will have an impact on the numbers,” he said Tuesday on MSNBC. “We never put too much weight on any individual month. This will particularly be true in this month because of the likely effect of the short-term absences from omicron.”
