Small businesses add jobs, but pay lagging
New York might be doing a little better at creating small business jobs than the rest of the nation, but those jobs aren’t paying as well as those elsewhere, according to a recent study by state Comptroller Tom Dinapoli.
Between 2011 and 2016, as the nation continued its climb out of the Great Recession, the state was adding more jobs in small businesses (9.2 percent growth) than the national average (8.9 percent growth).
But, the state’s payroll for such jobs grew more slowly than the national average, growing 17 percent during that period, compared with slightly more than 20 percent for the nation.
One reason for that might be
the growth of relatively low-paying jobs in the leisure and hospitality industry, which accounted for about 677,000 jobs, making it the largest sector in the 4 million-job small business economy, according to Dinapoli’s report.
Those jobs had an average pay of $27,500, up from $24,600 in 2013, from an earlier report by Dinapoli in 2013.
In 2013, leisure and hospitality jobs at small businesses totaled 600,000 jobs, making it the third-largest sector in the state, behind professional services and trade.
Said Dinapoli, “These businesses, however, face a variety of challenges in a continually changing marketplace
and the competitive demands of a global economy. The success of small businesses is vital to the health of our communities and the economy.”
Greg Biryla, executive director of the state office of the National Federation of Independent Business, which represents 11,500 small businesses statewide, said the report highlighted the challenges faced by small businesses.
“New York has the highest tax burden, and the stricter labor mandates,” he said. “That means sometime businesses cannot invest as much in their workforce as they would like.”
Biryla said the state should discontinue taking a “one-size-fits-all” approach to its business regulations. While Dinapoli’s report used federal Census data that defines small businesses as having 500 workers or fewer, Biryla said the average small business in the state has between nine and 11 workers.
“The same state rules that apply to a large multinational corporation should not also apply to a small business,” he said. “The Home Depots of the world are large enough to survive, but some of the hometown hardware stores might not be.”
Kevin Alexander, a labor market analyst for the state Labor Department, said, “The trade sector, which includes retail and wholesale establishments, and leisure activities make up a large portion of the small business firms.”
He said conclusions over Dinapoli’s report were “difficult to reach,” since it did not differentiate between full-time or part-time work ... If there is growth in industries who hire parttime workers then the growth in total wages may not appear as strong.”