Resiliency of Small Businesses, Alternative Jobs Data, AI Not Taking Jobs

Hey everybody, it's Gene Marks, and welcome to this week's episode of the Paychex THRIVE Week in Review where we take a few items of news that impacts your small business in mind, and we talk about them a little bit.

Well, I have to admit, I'm recording this or as I'm recording this right now, the federal shutdown is still going on. If you're a small business and you're still dealing with the impact of the shutdown, just be aware of the Small Business Administration not able to give out new loans or do servicing of existing loans. The IRS shut down and providing customer service for small businesses.

The Department of State can't issue passports if you're looking to travel. Federal contracts are going to be held up and payments to you might be held up, as well. As well as if you're operating a business around federal buildings and you rely on those on those workers coming into the office for your livelihood, you're going to be seeing a slowdown in that, as well.

That is all going on right now. My hope is that this gets resolved soon. My prediction is that it will be resolved as soon because none of these shutdowns last very long and really serve to show the interests of both parties as we head into the midterm elections.

So, fingers crossed. Hopefully by the time you're watching this, the shutdown is over. But if not, I do predict that it will be over soon, and we will cover the aftermath when that happens. On to other news.

But before we do, let me take a quick pause. You know running a business is challenging, especially when laws and regulations are keep changing and especially when government shuts down like this, which could be happening more in this political environment. And that's why Paychex is here. They keep your business up to date and compliant so you can avoid headaches and focus on your growth. So, check it out for yourself at paychex.com/meetpaychex. That's P A Y C H E X dot com forward slash M-E-E-T-P-A-Y-C-H-E-X. You can also find the link in the show notes.

Okay, let's get to the news now that's going on. The first has to do with Paychex. The company released its monthly small business employment watch for the month of September. The latest read of Paychex's payroll data, which is based on actual payroll data, shows minimal shifts in small business employment and hourly earnings growth that continues to trend below three percent. Hourly earnings growth for U.S. small business workers remains largely consistent and at 2.68% in November, it's below 3% for the 11th consecutive month.

I do have a concern there because inflation is running higher than the growth in wages, which could have an impact on consumer spending for those hourly workers. The Midwest has led regions for small business employment growth for the past 16 months. And here is what John Gibson, Paychex's president and CEO had to say.

“Our latest small business employment data once again indicates a steady labor market over the past year. This consistency reflects continued resilience from small businesses across the U.S. While we're observing little change in our national data, the Midwest continues to stand out and is the only region consistently delivering job growth over the past year and beyond.”

So, not significant growth from small businesses, but definite resiliency.

And by the way, as a side note, as you know, last week, the Labor Department could not publish numbers for unemployment because while the government was shut down. So, people are turning to alternative numbers to track their payroll and or to track how overall pay is going in this country. That's why the Paychex Small Business Employment Watch is so important. It is based on actual and real data.

I wrote a piece about this in The Guardian not a few weeks ago that talks about the need for a whole revision and how we are addressing payroll data in this country, and (we) might want to look at more of an income-based approach considering that so many workers are not only having jobs but other part-time jobs and side gigs and freelancer work. That's not taken into consideration of overall employment, and I do believe, as I said in my Guardian piece, that it is an issue that needs to be resolved.

So, payroll data did not come out last week, but there are other sources like Paychex's Small Business Employment Watch that can help you get an idea on how the economy is going.

My next story has to do with AI. There was a new report that was published on CNN that showed that AI is not replacing workers so much in the U.S. as previously thought. And that doesn't surprise me much either.

The issue that we have, and I wrote about this in Forbes just last week, is that AI itself, although being used at larger companies, is not really accurate or reliable enough for most businesses in this country to base their core operations on. And because of these hallucinations and the errors and inaccuracy, they're not really replacing workers with AI yet. Will that happen in the future? That remains to be seen, and I'm sure that some industries will be affected more than most. But right now, with this whole new onslaught of AI, we are not seeing a lot of workers being replaced by AI. That's what the data is showing right now.

My name is Gene Marks. You've been watching this week's episode of the Paychex THRIVE Week in Review. Hope you got good information out of it.

If you'd like some help or advice or tips on running your business, sign up for a Paychex THRIVE newsletter. You can go to paychex.com/thrive. We'll be back next week with more news that impacts your small business and mine. Let's hope that shutdown is over by then, if it's not over already. Hopefully, that'll be good news. We'll see you next week. Take care.

Do you have a topic or a guest that you would like to hear on THRIVE? Please let us know. Visit payx.me/thrivetopics and send us your ideas or matters of interest. Also, if your business is looking to simplify your HR payroll benefits or insurance services, see how Paychex can help. Visit the resource hub at paychex.com/worx. That's W-O-R-X. Paychex can help manage those complexities while you focus on all the ways you want your business to thrive.

I'm your host, Gene Marks, and thanks for joining us.

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