Illinois beats Missouri, Indiana, Ohio in small-business job growth

By ALAN J. ORTBALS
    It may be surprising to some but Illinois was recently ranked seventh among the nation’s 20 largest states in small-business job growth. Similarly, Chicago ranked seventh among the country’s 20 largest cities.
    Those findings were gleaned from the Paychex/HIS Small Business Jobs Index. The index is maintained on a monthly basis by the two, publicly-traded companies.
    Paychex, Inc., which is traded on the NASDAQ, is a leading provider of integrated human capital management solutions for payroll, HR, retirement and insurance services. Paychex serves approximately 590,000 payroll clients across 100 locations and pays one out of every 15 American private sector employees.
    IHS Global Insight is traded on the NYSE and is considered a leading source of insight, analytics and expertise in variety of areas that shape today’s business landscape. IHS is global in scope providing comprehensive content and expert independent analysis to businesses and governments in more than 150 countries. IHS has been in business since 1959. It employs about 8,800 people in 32 countries around the world.
    For the month of October, Illinois was tied with Wisconsin in small-business job growth and ranked ahead of some competitor states such as Indiana, Missouri, Ohio and California. While the October index shrunk slightly from 100.44 to 100.34, any value above 100 is considered positive growth territory.
    “The Paychex/IHS Small Business Jobs Index retreated again in October, for the third consecutive month,” said James Diffley, chief regional economist at IHS. “Nevertheless, at 100.34, small-business job gains proceed at a pace 0.34 percent faster than in our base period 10 years ago.”
    And, Martin Mucci, president and CEO of Paychex was similarly upbeat.
    “Even though the pace of small-business growth has slowed,” Mucci said, “the index has consistently been above 100, indicating a slow, but steady continuation of job gains.”
    Chicago ranked higher in the job growth index than Houston, Boston and Los Angeles. Dallas came in No. 1.
    On a national level, the analysis revealed that Other Services (except Public Administration), which includes offerings as varied as repair and maintenance to personal and laundry services, among other things, hit a new record high in October, 104.21, and is outpacing all other industry sectors by a wide margin. At 101.70, construction is the second-ranked industry index and has been over 101 for more than four years. Leisure and hospitality had its worst one-month result in more than two years (-0.67 percent) as its index fell to 100.00, giving up all of the momentum gained in 2015. Manufacturing remains the lowest-ranked industry and its 1.43 percent decline over the past year coincides with the general manufacturing cutbacks tied to the increase in the value of the dollar and retrenchment in oil and gas.
    The index analyzes same-store, year-over-year worker count changes to identify and track small business employment trends using real small business payroll data from the Paychex client base. The index is based on aggregated data from approximately 350,000 small businesses with fewer than 50 workers across the United States, one of the largest sample sizes of any small business index or report in the country, and provides timely, accurate insight into national, regional, state, metro, and industry employment activity.
    Todd Maisch, president and CEO of the Illinois Chamber of Commerce was surprised by the state’s ranking.
    “We are still trying to get back to the point where we have as many jobs as we did before the recession,” Maisch said. “The state’s unemployment level remains higher than the national level, so we hope that there is good news around the corner. But I would just tell you when I talk to small and medium sized businesses in particular, job growth is not the first thing on their minds. They’re still managing in a very lean environment. They’ve recovered financially but many of them have decided they can achieve the same kind of success in their businesses without adding to the payroll.”
    For the past five months Gov. Bruce Rauner has been deadlocked with the legislature over the budget. Since taking office, Rauner has been promoting his “turnaround agenda,” a list of changes he thinks would make Illinois more business friendly and competitive. To date, he has had no luck in convincing the legislature that any of it should be adopted, however.
    The Illinois Chamber supports the governor’s agenda and puts workers compensation reform at the top of its list. And, the chief item on that subject is “causality,” Maisch said. Under Illinois law, if even one half of one percent of a worker’s injury can be attributed to the workplace, the employer is subject to the entire cost. That, says Maisch, makes Illinois an outlier among the nation’s worker comp industry.
    “We largely agree with the governor’s agenda and we’re supporting it,” Maisch said of the Illinois Chamber. “We think the most important thing that could be done is a strong workers compensation reform bill. That impacts so many businesses’ bottom lines and is very important in itself. But, it also would finally send a signal to employers that we really can change for the better. It would improve the psyche and the reputation of Illinois as a place that can cope with its problems and turn them around.”