The percentage of small businesses planning to boost pay is at a 28-year high as a shortage of qualified workers becomes the biggest concern for owners, according to the National Federation of Independent Business.
“Only an increase in the labor force and an increase in the participation rate can provide relief from the impact of labor shortages,” Bill Dunkelberg, the federation’s chief economist, said Thursday in a press release on the group’s survey findings.
Twenty-four percent of employers plan to raise worker compensation, the highest reading since December 1989, according to the federation. Twenty-two percent of owners cited the difficulty of finding qualified workers as their single most pressing business problem, exceeding taxes and the cost of regulation.
President Donald Trump said Tuesday in his State of the Union address that the tax cut he signed in December provided relief for small businesses. The next day, the Federal Reserve said in its statement following a two-day policy meeting that the U.S. economy will expand at a moderate pace and the job market will remain strong.
The Labor Department reported Friday that employers in the U.S. added a higher-than-expected 200,000 jobs in January. The median forecast of economists surveyed by Thomson Reuters was for 180,000 new positions.The unemployment rate held at a 17-year low of 4.1%.
During the State of the Union address, Trump mentioned two of his guests, Steve Staub and Sandy Keplinger, the brother-and-sister team who run Staub Manufacturing Solutions in Dayton, Ohio. They have increased the number of people on their payroll to 37 from 23 over the past year and sweetened their Christmas bonuses.
“They are having their best year in their 20-year history,” Trump said in his address. “They are handing out raises.”
This story has been updated.