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Hire Ground Survey says hiring is up, but paychecks are down in the small-business world.

By Mark Henricks

Opinions expressed by Entrepreneur contributors are their own.

Small businesses hired more people in 2004, but paid them less,according to the Small Business Scorecard compiled by SurePayroll, aSkokie, Illinois, payroll service.

To generate the data, SurePayroll polled its over 14,000small-business customers across the country. Small businessesreported having 4.4 percent more employees last year. However, theaverage paycheck declined 4.8 percent. For detailed information oneach region, see the "What's the Score?" chartbelow.

SurePayroll president Michael Alter says the 2004 Scorecard,which will be updated monthly by the company and featured quarterlyin Entrepreneur, provides valuable insight into thesmall-business economy. "We've moved from what everybodysaid was a jobless recovery in 2003 to a payless recovery in2004," Alter says.

Alter attributes the wage squeeze to rising interest rates, oilprices and other costs. "All the major costs went up, yet mostsmall businesses have been unable to raise prices," he says."The way they were able to continue to grow was to hire moreworkers at lower wages."

While being able to hire more workers for less money may seem tobe a positive for businesses, eventually, smaller paychecks couldreduce consumer spending, which would bode ill for the overalleconomy. Regardless, says Alter, "I think 2005 is going to bea good year for small business."

For more information on the Scorecard, visit www.surepayroll.com/scorecard.


What's the Score?

After polling over 14,000 small businesses, Skokie, Illinois-basedSurePayroll revealed that entrepreneurs hired more people in 2004,but paid them less. Here's how each region stacked up:
Region
Nationwide
Midwest
Northeast
South
West
No. ofEmployees
+4.4%
+0.9%
-3.1%
+1.9%
+6.3%
AveragePaycheck
-4.8%
-4.2%
+3.9%
+0.9%
-7.6%

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