A Record Half of Small Businesses Are Raising Wages

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That’s how many small business owners reported raising worker wages in January—a record high share for yet another month and the latest sign that the labor shortage persists.

The growing share—it was about a quarter just a year ago and 48% in December—reflects the difficulties small businesses are having filling positions and retaining employees, according to the National Federation of Independent Business. In the 48 years the NFIB has surveyed business owners, there’s never been this many raising pay.

Nationwide, job openings that surged to record highs last year are still hovering near those levels, and the labor force participation rate has stubbornly remained below pre-pandemic levels as factors including caregiving obligations and concerns about contracting the virus keep people on the sidelines. 

Interestingly, the share of business owners reporting that they planned to raise pay in the next three months (not that they had already done it) fell to 27% from 32% in December, and slightly fewer said in January that labor costs and quality were their top problems. The findings were based on 1,504 respondents to the January survey, taken through Jan. 28.

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