Nevada’s small firms boosting pay more

Michelle Swafford

Monday, Jan. 10, 2005 | 10:58 a.m.

Nevada small businesses defied national trends in 2004 when it came to the rate of increase of their employees' paychecks, a payroll firm's internal study suggests.

SurePayroll, a Skokie, Ill.-based payroll processor for firms with fewer than 100 employees, said Nevada small-business owners increased annual paychecks by an average of 3.3 percent in 2004 to $25,873, compared with a national average decrease of 4.8 percent. SurePayroll said the national average annual salary was unavailable.

"If it's a small business, the owner might take a lower salary," SurePayroll President Michael Alter said. "It doesn't mean necessarily everyone in the company got a lower salary."

Nevada also reduced its reliance on independent contractors from January to December, reducing the number from 4.5 percent of its workforce to 2.9 percent, putting the state more in line with the national average, Alter said.

Nationally, firms increased their reliance on independent contractors from 2.9 percent in January to 3.2 percent in December, he said.

But Nevada, which has nearly 500 SurePayroll clients, did not outpace the nation in all areas of running a small business. Nevada's average business size in 2004 increased nearly 4 percent to 4.7 employees per firm, while the national average increased 4.4 percent to 5.9 employees. National numbers are based on 14,000 SurePayroll clients.

Economists say SurePayroll's salary data does not parallel federal data trends.

Keith Schwer, director of the UNLV Center for Business and Economic Research, said he would be cautious about relying on SurePayroll's data because the Bureau of Economic Analysis reported that wages and salaries increased an average of 4.6 percent nationally from November 2003 to November 2004, which is the most recent data available.

The Bureau of Economic Analysis samples large and small firms and is reporting information only through November, which could cause some variance, Schwer said.

"I really do believe that the more accurate number is the BEA number," Schwer said. "I do believe that wages are going up (and) the economy is growing."

Given that wages are going up, Schwer said the Nevada numbers might be an accurate reflection of small businesses.

Bill Dunkelberg, an economist who does work for the National Federation of Independent Business, said the SurePayroll numbers also might differ because of SurePayroll's client turnover.

Alter, SurePayroll's president, said his company retains about 85 percent of its clients on an annual basis so his report is representative of state and national trends.

Small businesses tend to be a better market indicator of economic and employment trends, Alter said. For example, a small business can layoff one employee, while a big business would have to layoff 1,000 employees to have the same effect, he said.