An improved trend in small business hiring was also reflected in a survey by Intuit. Its survey of businesses with fewer than 20 employees showed small business employment increased 0.1 percent in June.
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Susan Woodward, Intuit financial economist and founder of Sand Hill Econometrics, said this is the fourth month in a row that small businesses showed improvement, totaling about 20,000 per month.
"We're seeing a pickup in hiring but not in wages," said Woodward, whose model forecasts small business hiring. "…What happened in the last couple of months is that employment has picked up in a way we have not seen it pick up since we started to recover. The recovery in small business employment has been somewhat pathetic."
While the economy has added back the jobs lost in the Great Recession, small business has not and still has a ways to go. "Small business is 900,000 short of what it was at its peak and that's on a group of about 20 million people so the 900,000 is almost 5 percent still," she said.
Woodward said she believes one of the trends responsible for the shortfall in small business workers is the migration of workers to small establishments, or small work places, like a Starbucks or other chain, that is actually owned by a big company.
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"There's been all this discussion of the demise of small business without any discussion of what's taking its place," she said. "The franchises are doing better than the independents and the corporate branches are doing better still."
She points out that while small business jobs are still lagging, the employment in small establishments owned by big companies has actually added workers and is just under 10 million, compared with 9.1 million workers before the financial crisis.
Zandi said the pickup in small business hiring was apparent in the June ADP report, with small businesses with 49 or fewer employees, adding 117,000 workers, and large businesses with over 500 workers, adding 49,000.