[ad_1]
In the current era of Stimulus Good Times, with its enormous flaws.
By Wolf Richter for WOLF STREET.
Small businesses are tough. Many are quietly disappearing. Hiring is a problem. Due to limited resources, small businesses find it difficult to compete with large corporations in terms of pay, benefits, glitzy workplaces, and LinkedIn glamor. But in the current era of the Stimulus Good Times with its massive problems, workforce issues have hit record highs – the bizarre phenomenon of 13 million people claiming unemployment benefit as companies struggle to hire .
In addition to a host of labor issues, small businesses face inventory shortages. And they’ve responded to challenges where everything costs more – including their workforce – by raising prices in record numbers, according to data from the NFIB, the largest trade organization in the United States for small businesses.
Among small businesses, 46% said they had vacancies in June that could not be filled, the second highest in NFIB data going back to 1986, just below May’s record:
Plans to increase employment over the next three months hit a new record in June. The Jobs Index tracks the percentage of owners who plan to “increase” their workforce minus those who plan to “reduce” their workforce in the next three months:
And they increased the allowances. In June, the compensation index hit a record high. The index tracks net increases minus decreases over the past three months. This shows that small business owners are struggling to add and retain staff:
The main issue owners said their businesses faced was the “quality of the workforce” they were able to attract.
More than half of owners said they received “few or no qualified applicants” for the job openings they had. For small businesses, this problem is always high in hot labor markets, but it is much less of a problem when the labor market is piling up sending high-quality labor in search of jobs. .
The difficulties small businesses have in retaining and recruiting staff, given the aggressive hiring practices of large businesses that a small business might not be able to compete with, are illustrated in the Workforce Index. real sharp increases in employment, which have remained slightly negative for two months, these companies even having trouble hanging on to their staff:
And small businesses have increased their prices over the “last three months” at a rate that far exceeded any previous period in data going back to 1986. The survey data does not go back to the days of high inflation of the late 1970s and early 1980s, so we lack this benchmark. But it’s huge:
And it will grow: a record proportion of small businesses are still planning to raise their prices in the “next three months”:
Small businesses more often than not have more inventory than they want, and being “too low” is usually not a big deal, according to NFIB data. But that drastically changed in June of last year, when that metric started rising to a new all-time high in June of this year:
Small business owners feel quite optimistic overall, with the NFIB optimism index at 102. Although down from peak optimism periods of around 107, it is still up. rise to 91 during the dark days of April 2020 and to 81 during the downturn of the financial crisis in March 2009.
One of the many mind-boggling economic factors during the pandemic was the spike in new business trainings, as fraudsters suspected that fraudsters were setting up businesses to obtain PPP loans. But the PPP ended in May. Yet business applications continued at a breakneck pace. Read... Did people use their stimulus to start a business? The peak in new businesses, one of the blowers of the pandemic
Do you like reading WOLF STREET and want to support it? Use ad blockers – I totally understand why – but you want to support the site? You can make a donation. I really appreciate it. Click on the beer and iced tea mug to find out how:
Would you like to be notified by email when WOLF STREET publishes a new article? Register here.
Watch our sponsor, Classic Metal Roofing Systems, discuss the benefits of using the products they manufacture.
Product information is available from Classic Metal Roofing Systems, manufacturer of beautiful metal roofs.
[ad_2]
Source link