By EMILY KUMLER
LAS VEGAS REVIEW-JOURNAL
Nevada's economy is rebounding thanks in large part to small businesses, which increased hiring and salaries in October, two experts said Friday.
After a sluggish summer, businesses with 100 or fewer employees increased hiring 3.7 percent from the end of August to the end of October, said Michael Alter, president of SurePayroll, an Illinois-based provider of payroll and outsourcing services for small businesses.
National statistics confirm the trend. The U.S. Department of Labor reported that for September, Las Vegas had the second-greatest employment increase of any metropolitan area in the country with more than 42,500 jobs added. Statistics on Las Vegas employment for October are not yet available through the department, but SurePayroll expects the employment trend to continue.
"Look at the jump between September and October; there's an increase of 3 percent," Alter said. "That increase means people are finding work more easily."
Alter suggested that the recent rise in economic prosperity may explain why President Bush carried Nevada on Election Day.
"One of the biggest deciding factors was how's the economy doing and with a (hiring) increase of 3 percent over the past month, things are improving for Nevada," Alter said.
Although August-to-October hiring statistics are strong for Nevada, year-to-year comparisons tell a different story. Nevada saw an increase of 1.4 percent in October compared with the prior year. But nationally, hiring increased 3.2 percent in October compared to October 2003, according to SurePayroll's Small Business Scorecard, a compilation of data gathered from 13,000 of the company's U.S. small business clients.
However, while small businesses in other states were adding more jobs than Nevada, the Silver State's small businesses were increasing paychecks for both salary and wage employees by 8.3 percent in October -- tops in the nation. Nationwide, paychecks at small businesses fell 3.4 percent.
In Nevada, paychecks peaked in September. While wages increased in a year-to-year comparison, Nevada small business paychecks decreased 4 percent from September to October.
But Alter said average wages fall when companies hire more people, which would explain the drop.
"Wages may look like they've dropped because of hiring," Alter said. "In the first month people don't get bonuses or commission checks which will make it look like they are paid less."
Alter was optimistic that the month-to-month drop in wages was not a bad sign for the Nevada economy. He said the hiring downturn in the summer may have resulted in additional profits, and in the fall those businesses felt more comfortable hiring employees.
"We're getting a few more workers for small businesses, but their pay is going up quite a bit; what more do you want?" asked Jeff Waddoups, associate professor of economics at the University of Nevada, Las Vegas. "It's a sign of our prospering economy."
The hiring and salary increases are strongly felt in Nevada.
"Approximately 98 percent of businesses in our state are small businesses" with fewer than 100 employees, according to the Nevada Commission on Economic Development survey.
The Las Vegas Chamber of Commerce concurs small businesses make up a significant part of the city's business community.
"The majority of companies that set up shop in Las Vegas this past year have fewer than 25 employees," the chamber says on its Web site.
More Debt Consolidation News