Small Business Labor Market Remained Weak in June
Jul 02, 2020 11:25AM
By David Dykes
COLUMBIA – The NFIB Research Center released its monthly jobs report, showing the small business labor market weakened further in June.
Firms reduced employment by 0.28 workers per firm, compared with a decrease of 0.17 workers per firm in May, NFIB officials said.
Unchanged, six percent reported increasing employment an average of 2.6 workers per firm and 22 percent (up one point) reported reducing employment an average of 4.6 workers per firm (seasonally adjusted), NFIB officials said.
“As states change reopening rules and dates, sometimes easing restrictions, small businesses are feeling various levels of uncertainty as to what comes next,” said NFIB’s Chief Economist Bill Dunkelberg. “With recent Covid-19 spikes in some cases, many state governments are reversing prior decisions and reducing the potential for small business to earn needed revenue.”
“State figures show initial claims for unemployment benefits fell the week ending June 20, but over 600,000 South Carolinians have filed for unemployment since mid-March when the pandemic forced many businesses to scale back or close altogether," said NFIB State Director Ben Homeyer. "Hopefully, the number of first-time claims will continue to decline, but as the recent increase in COVID-19 shows, it will be months before South Carolina’s economy returns to normal.”
Some small business owners are cutting payrolls as Paycheck Protection Program (PPP) loan borrowers move through their eight-week forgiveness period, NFIB officials said.
The forgiveness terms for the PPP loans generally require owners to keep payrolls at pre-crisis levels except under certain conditions. Many owners received their loans in April and will be unable to keep all their workers past June, NFIB officials said.
According to the NFIB, a seasonally adjusted 16 percent plan to create new jobs in the next three months, up eight points from May. As states begin to reopen, owners are planning to re-hire workers as they open their business or expand business operations.
Also seasonally adjusted, 32 percent of owners reported job openings they could not fill, up 9 points from May, according to the NFIB.
Fifty-one percent of owners reported hiring or trying to hire in June and 84 percent of those hiring or trying to hire reported few or no “qualified” applications for the positions they were trying to fill, up six points.
Fifty percent of construction firms reported few or no qualified applicants and 30 percent cited the shortage of qualified labor as their top business problem, NFIB officials said.
Up seven points, 27 percent had openings for skilled workers and 11 percent had openings for unskilled labor (up 1 point), according to the NFIB.
Twenty-three percent of owners reported few qualified applicants for open positions (up 4 points) and 20 percent reported none (up 2 points). Forty-one percent of the job openings in construction are for skilled workers, NFIB officials said.
Fewer owners raised compensation than in previous months with less upward pressure on wages created by the massive numbers of layoffs and terminations, the officials said.
Seasonally adjusted, a net 14 percent reported raising compensation (unchanged) and a net 13 percent plan to do so in the coming months (up 3 points). Eight percent of owners cited labor costs as their top business problem, NFIB officials said.
For more than 75 years, the NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 states.
NFIB is nonprofit, nonpartisan, and member-driven.
For more information, go to nfib.com.