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Small Business Wages on the Rise

While wages dropped in several sectors in the first quarter of 2013, small businesses were a bright spot.

Wages fell for the first time since early 2011, according to the PayScale Index, dropping 0.4 percent in mining, oil, and gas; 0.4 percent in manufacturing; and more than 1 percent in biotech.

Small businesses, according to the report, gave out the only wage increases in Q1.

“Although the growth for small companies was muted this quarter, they have experienced strong wage growth over the last few quarters,” said Katie Bardaro, lead economist with PayScale, in a press statement. “This wage growth for small companies is largely driven by two factors: their competition with larger firms for top talent and their ability to react and respond to labor market trends in a more fluid and immediate way.”

According to the report, the smaller the company, the better it fared.

Small companies grew wages 0.3 percent, while pay fell 0.2 percent for medium companies and 0.5 percent for large companies. For the first time since 2006, small company wage growth overtook the rate of increase in large companies.

PayScale based its analysis on data from more than 40 million employee profiles in more than 13,000 unique job titles, which it uses to show how actual worker pay varies alongside factors such as work experience, education, employment setting, and job responsibilities. 


Last updated: Apr 9, 2013


Julie Strickland covers start-ups, small businesses, and entrepreneurial endeavors of all kinds for Inc. Her work has been published in Brooklyn Based and City Limits in New York, the Free Times in Columbia, SC, Real Travel Magazine in London, and Daegu Pockets in South Korea. She lives in New York City.

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