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Paychex | IHS Markit Small Business Employment Watch: Job Growth Shows Slight Increase in May, Annual Wage Growth Dips to 2.59 Percent

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Paychex | IHS Markit Small Business Employment Watch: Job Growth Shows Slight Increase in May, Annual Wage Growth Dips to 2.59 Percent

The Small Business Jobs Index increased 0.07 percent to 99.60 in May
At $26.61, hourly earnings growth increased 2.59 percent YOY ($0.67); one-month and three-month annualized hourly earnings growth continue to trend higher than the annual rate

South leads regions in employment growth; West ranks highest for wage growth
Texas ranks first in state job growth; Arizona remains first in annual hourly earnings growth
Denver continues to lead metros in job growth; Phoenix remains first among metros in wage growth
At 100.30, Construction has been above 100 for the past six years; Trade, Transportation, and Utilities leads weekly earnings growth among industries (4.07 percent)

The Paychex | IHS Markit Small Business Employment Watch for May shows a small increase in the rate of hiring and a slight decrease in the pace of wage growth. The Small Business Jobs Index grew for the first time since January, up 0.07 percent to 99.60. Job growth among small businesses is down 0.73 percent year-over-year, reflecting tightening labor markets. Hourly earnings grew $0.67 to $26.61, up 2.59 percent from last year. The pace of annual wage growth is down from its peak of 2.96 percent in June 2017, but one-month (2.80 percent) and three-month (2.86 percent) annualized hourly earnings growth continue to trend higher than the annual rate.

“The national index saw a slight improvement in May, its first since January, but remains below 100,” said James Diffley, chief regional economist at IHS Markit.

“It’s encouraging to see the jobs index increase for the first time since January. The modest rate of growth in small business employment reflects the continuing pressure of the tightening labor market,” said Martin Mucci, Paychex president and CEO.

National Jobs Index

At 99.60, the Small Business Jobs Index increased slightly in May, but is down 0.73 percent year-over-year.
Reflecting tightening labor markets, the 12-month growth rate has been negative since March 2017.
National Wage Report

Hourly earnings growth peaked at 2.96 percent in June, but has steadily decelerated to 2.59 percent in May.
The three-month annualized growth rate improved to 2.86 percent, increasing for the sixth consecutive month.
At 2.80 percent, the one-month annualized growth rate continues to trend higher than the annual rate, but reversed its path downward in May.
Regional Jobs Index

Back over 99, the West had its best one month gain in more than a year, 0.21 percent.
The Midwest was the only region to decrease in May, declining slightly (0.07 percent) to 99.75.
Regional Wage Report

Decelerating further in May to 2.25 percent, the South is now the weakest region for hourly earnings growth.
Though hourly earnings growth is only slightly higher in the Midwest, 2.29 percent, one-month and three-month annualized growth rates are both above three percent.
State Jobs Index

With its third strong gain of 2018, Texas moved into first place among states with an index level of 101.09.
Back to 100, Missouri jumped four spots in April and 10 spots in May, improving more than two percent in 2018.
Note: Analysis is provided for the 20 largest states based on U.S. population.

State Wage Report

Falling below one percent in May, Virginia is experiencing a quick drop-off in hourly earnings growth in 2018.
Wage growth is slowing moderately in New York, but remains above three percent and near the top of the state rankings.
Earnings growth in Illinois has picked up in 2018, averaging an $0.08/hour increase per month, compared to only $0.04/hour in 2017.
Note: Analysis is provided for the 20 largest states based on U.S. population.

Metropolitan Jobs Index

St. Louis is over 100 for the first time since 2016 and is ranked sixth among metros, its highest ranking in more than 10 years.
Detroit jumped 0.41 percent in May and is back over 100 for the first time since May 2017.
Houston continues to show strong improvement in small business employment growth, up 2.17 percent year-over-year and over 101.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Metropolitan Wage Report

Topped by Phoenix, the Southwestern metros remain the leaders in wage gains.
Seattle has both the weakest hourly earnings and weekly hours worked growth among metros. Ranked positively in 2017, wage growth has quickly lost momentum in Seattle during 2018.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Industry Jobs Index

At 99.36, Leisure and Hospitality has trended below 100 since September, but had a solid 0.26 percent gain in May and remains the sector with the best performance compared to the 2004 base year.
At 100.30, Construction has been above 100 for the past six years, signifying steady small business employment growth.Note: Analysis is provided for seven major industry sectors.
Industry Wage Report

Near four percent, Leisure and Hospitality has had the strongest hourly earnings growth each month of 2018.
Professional and Business Services has decelerated to 2.17 percent growth in May, ranking last among industry sectors in 2018.
At 4.07 percent, Trade, Transportation, and Utilities leads weekly earnings growth among industries.
Note: Analysis is provided for seven major industry sectors.

For more information about the Paychex | IHS Markit Small Business Employment Watch, including interactive charts detailing all data at a national, regional, state, metro, and industry level, visit www.paychex.com/employment-watch and sign up to receive monthly Employment Watch alerts.

*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.

About the Paychex | IHS Markit Small Business Employment Watch
The Paychex | IHS Markit Small Business Employment Watch is released each month by Paychex, Inc., a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small-to medium-sized businesses, and IHS Markit, a world leader in critical information, analytics, and expertise. Focused exclusively on small business, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful tool delivers real-time insights into the small business trends driving the U.S. economy.

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Grey skies ahead – Malta prepares for a gloomy 2021 if they can’t tackle financial crime

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Grey skies ahead – Malta prepares for a gloomy 2021 if they can’t tackle financial crime 1

By Dhanum Nursigadoo, ComplyAdvantage

With the summer drawing to a close, many countries who rely significantly on warm weather tourism will be assessing the impact of Covid-19. Being a small island in the middle of the Mediterranean you would expect Malta to be taking a significant economical hit – just like we are seeing in other popular European holiday destinations – but this doesn’t take into account the strength of the Maltese economy.

Emerging from the eurozone crisis with one of the most dynamic economies strategically positioned between three continents, Malta has had one of the lowest unemployment rates in the EU and has recently seen its GDP growth expand year-on-year.  But perhaps the most important aspect of the Maltese economy has been its attraction for foreign businesses with only a 5% tax on profits. It is no secret that Malta is a tax haven, probably one of the most effective tax havens in the world.

But you can’t pick and choose who takes shelter, and it’s no secret that money launderers have been taking advantage of the regulatory landscape in this archipelago.

The conditions of a tax haven suit criminal enterprises, who can take advantage of the opaque environment and blend their illegal activities with the same operations enjoyed by high net worth individuals and corporations who are looking to reduce their tax bill. And last year Malta’s keenness for secrecy and avoidance resulted in a damning report by Moneyval – the Council of Europe’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) body – which found that while the nation had made some efforts to curb money laundering there was still much to be desired in order to bring the tax haven up to standard. Overall, they were of the opinion that Malta viewed combating money laundering as a non-priority and this resulted in branding Malta with low to partial ratings for 30 out of the 40 Financial Action Task Force (FATF) recommendations.

The findings of the report were stated to have the potential to “create within the wider public the perception that there may exist a culture of inactivity or impunity”. This follows on from a series of international high-profile stories regarding Malta and financial crime. Most shocking was the murder of journalist Daphne Caruana Galizia – who investigated corruption and money laundering in her native country – and was killed by a car-bomb three years ago leading to international outrage and condemnation.

Now Malta is in a race against time to turn their reputation around or they will suffer genuine consequences. The FATF have threatened to place Malta on a “greylist” of high-risk jurisdictions unless they have shown a genuine commitment to combatting financial crime and implemented the recommendations of the Moneyval report. If they fail, this would make Malta the first EU country to make the list and join others such as Panama, Syria and Zimbabwe.

The pandemic has actually given Malta more time to meet these obligations, and it has been widely reported that an initial summer deadline has now been moved to October due to the widespread disruption.

As we head into the autumn, there are signs that Malta has begun to take action. The Malta Financial Services Authority (MFSA) has created and established an empowered AML now headed up by Anthony Eddington, formerly of the UK’s Financial Conduct Authority and who has previous experience of tackling anti-financial crime at Deutsche Bank. This team has already begun working closely with international experts, specifically partners in the US through the US embassy in Malta and the United States Commodities Futures Trading Commission (CFTC). In May this collaboration led to 25 new cases focused on money laundering in particular, and with plans to increase standard inspections and on-site investigations into businesses in Malta, it appears there is a change to the country’s priorities.

Importantly, the report highlighted a problem for countries that choose to become tax havens. In some cases it was not that the Maltese authorities deliberately turned a blind-eye, but simply that they did not have the necessary knowledge to effectively tackle financial crime in the first place. Law enforcement appeared unable to even recognise when crime was occurring.

But this blurring of financial compliance will not help businesses if Malta does indeed become “greylisted” this year. While not as devastating as being blacklisted (the two occupants of this list are Iran and North Korea) there are significant detrimental effects to being put on the FATF greylist. Although this signals that the country is committed to developing AML/CFT plans (unlike the blacklist) it still sends out a warning signal to the world that this is a high-risk area, with the country in question subject to increased monitoring and potential sanctions from the IMF and the World Bank. Make no mistake, being put on the greylist will be catastrophic for Malta’s economy.

It remains to be seen how the work to avoid such a calamity will affect Malta’s tax haven status. Perhaps with an increased fight against financial crime there will be less ability to defend one of Europe’s most competitive tax regimes. But if Malta does not show they are genuinely committed to tackling this problem, then the pandemic disruption to the island’s tourism may be minor in comparison to the grey clouds that now approach their shores.

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How will the UK prepare a supply chain for the distribution of the Covid-19 vaccines?

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How will the UK prepare a supply chain for the distribution of the Covid-19 vaccines? 2

By Don Marshall, Marketing role at Exporta.

The challenge of mobilising a supply chain for the introduction of a global and nationwide vaccine will be enormously complex. The process will be costly, and it’s likely the figures will stretch to the hundreds of millions for both the production of the vaccine itself and its distribution across the UK. We must prepare and plan a supply chain strategy to ensure it reaches those most in need in a timely and safe manner.

The task of immunising a whole population is something that has never been planned or likely imagined by anyone within a standard supply chain. A supply chain that goes directly from the manufacturer to the end consumer, or user/ patient in this case, is complex and goes beyond the scope of any single logistics company. It would have to be conceived and delivered via a large joint effort and collaboration between multiple organisations. Effectively distributing the vaccine will depend on the source of manufacture, its storage requirements, and protection of the vaccines from manufacture through to patient administration.

The majority of vaccines require storage within a specific temperature range and need to be handled safely and in hygienic conditions. Depending on where the vaccines are manufactured, the transport legs will vary; if they are coming from overseas, air freight will increase cost and complexity. In addition to supplying the vaccine, syringes, needles and containers also need to be taken into account when preparing the supply chain.

Securing the specific types of boxes or containers i.e. the lidded containers normally used for transporting pharmaceutical products will mean acquiring them from all available stockists and manufacturers. Delivery vehicles would then need to be considered, with temperature-control factored in. The medical supply chain can inform their approach to distribution by assessing data from previous supply chains, and how large quantities of vaccines have been sent out in the past. Collating successful vaccine delivery examples from other parts of the world would be advantageous here, the more we can do to prepare for a logistical challenge of this magnitude, the better.

The distribution of this COVID vaccine will be unique in its scale and for that reason, additional supply chains will need to be mobilised. Apart from medical supply chains, those best suited for this type of transportation are the fresh/frozen food industries and supermarkets. I would mobilise these businesses to assist with the vaccine’s distribution wherever possible and use their car parks and facilities for the temporary medical centres needed to administer the vaccine to the public.

Using the food industry and supermarket networks would leave the current pharmaceutical supply chains intact for health services, pharmacies and the NHS. It would protect those vital services and continue to serve communities across the UK. Inevitably, it would place a short term strain on food supply chains, but these are supply chains that are well-equipped and versed in coping with excess demand i.e. the spike endured from the brief spell of public panic buying at the start of the crisis. With adequate resourcing and planning, I believe the UK supply chain can and will handle this challenge.

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Dealing with the loneliness crisis with assistive technology

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Dealing with the loneliness crisis with assistive technology 3

By Karen Dolva, CEO and Co-Founder of No Isolation

Humans are social beings, and for most children, school will be their most important social arena. Unfortunately, however, many children and adolescents with long-term illnesses are unable to attend school for extended periods, due to treatment plans, ill health or more recently due to the risk of infection. Research has shown that long-stints of school absence for children and adolescents with Chronic Fatigue Syndrome (ME) and cancer can range from months to years.

These prolonged periods of absence, which often lead to limited interactions with other children and adolescents, can result in children completely losing their social network, leaving them feeling cut off, lonely and isolated, all as a result of something that is completely out of their control. What kind of consequences can this type of social isolation have for children and young adults?

In a recent in-depth investigation into the impact of COVID-19 on the emotional and educational development of British school-aged children, No Isolation partnered with independent researcher, Henry Peck, to look into the impact of COVID-19 on school aged children, to shed further light on the consequences of school closures, not only across the UK, but the long term effects that this can have on children and adolescents everywhere throughout the pandemic.

As a company working to abolish loneliness and isolation amongst those suffering with chronic illness, we were already aware of the effect that social isolation can have on a child’s educational development and mental health. For the investigation we collected responses from 1,005 parents and carers of 1,477 children spanning primary and secondary school.

Results of the study found that a concerning 76% of parents and carers reported that, since lockdown, they have become worried that their children are suffering from loneliness. Results also showed that parents and carers of 5-10-year-olds worry that their children are lonely often or all of the time, whilst parents and carers of 11-16-year-olds are concerned that their children are lonely at least some of the time. This is likely due to the fact that older children have greater access to social technologies, while younger children often rely on non-verbal forms of communication such as facial expression, physical contact, and through play, all of which is difficult to recreate whilst away from the school setting.

At No Isolation we are committed to creating solutions that will help children stay connected to their friends and their education, regardless of circumstance. We’ve seen first-hand the devastating impact that loneliness can have on a child, and know that children that can’t attend school don’t just miss out on learning, they miss out on friendships too. Losing this contact during the early years developmental stages can be devastating, leading to anxiousness and an increase in feelings of isolation. This report sheds light on the hundreds of thousands of young people that may not be able to rejoin their friends in school, and it is vital that they don’t fall through the cracks. We plan to continue researching the impact of this unprecedented pandemic and driving the conversation around how we, as a nation, can ensure the mental wellbeing and educational development of those most affected.

Loneliness has been found to have serious implications for both physical and mental health. People suffering from loneliness are 32% more likely to have a stroke and are 26% more at risk of early mortality. From No Isolation’s own research into the impact of school absence due to long-term illness, we have found that  children are particularly vulnerable to loneliness if they cannot attend school.

Researchers, Perlman and Peplau, define loneliness as a negative feeling, stating that a lonely person is experiencing a discrepancy between desired and actual social contact. Being socially isolated is not synonymous with being lonely, but there will often be a correlation between social isolation and loneliness. Though much empirical research on adults and adolescents shows a link between loneliness and depression, many studies have found that friendship-related loneliness is more explanatory for depressive symptoms among adolescents than parent-related loneliness. One possible explanation is that friends are the preferred source of social support during adolescence.

With that in mind, we should be both sad and alarmed by the high numbers of young people unable to attend school, and more so by the fact that we do not really know who they are or exactly why they cannot go to school. Research has shown that social isolation and loneliness often correlate with mental disorders, including depressive disorders, there are, however, options available for children and adolescents in the form of assistive technologies, enabling them to stay connected with education and their peers.

The provision of dedicated school staff, inspirational hospital schools, the use of avatars like AV1 that enable children to attend school remotely, are just a few of the ways that assistive technology and exemplary attitudes are helping children with long-term illnesses from becoming disconnected from essential social networks. There are also examples of individuals who are pushing to keep children from falling between the cracks and becoming invisible, such as Amy Dixon, who is running a petition that will do exactly that, bringing these issues to the attention of those who can make a real change. It is, and will be, thanks to these exemplary changes that more support is being offered to children that are virtually invisible across the UK at present.

However, not all children have the option to receive these kinds of provision. There are pockets of excellent practice driven on an individual and local level, but there needs to be systemic change at a policy level, to ensure everyone is supported.

Educational provision for children out of school due to illness appears to be something of a postcode lottery, with some families having to fight for 3 hours of home tuition a week, whilst others are offered 15 hours by default. This is thought to be, in part, due to the open statutory guidance which allows for flexible interpretation of government guidelines, as well as financial limitations schools and city councils face. To improve the lives and outcomes of this group of children, is to create a more accurate view and analysis. This can be done by joining up existing datasets, by asking better questions, and by building a model that predicts future numbers of children from falling outside of the system. This, in turn, will push the issue up the political agenda and drive much needed changes to statutory guidance. Most importantly, it would lead to more support for children that are seemingly invisible across the UK.

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