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December 5, 2019 3:30 PM, EST

Share of Small Businesses Planning Higher Pay Nears Record

American flag at a manufacturing facility in Bowling Green, Ky.An American flag is displayed on the factory floor at the Holley Performance Products Inc. manufacturing facility in Bowling Green, Ky. (Luke Sharrett/Bloomberg News)

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As a tight labor market makes filling positions more difficult, 26% of U.S. small-business owners plan to increase pay in coming months, the most since a record in 1989, according to a National Federation of Independent Business report out Dec. 5.

The November survey showed finding qualified workers remains the biggest challenge for respondents. Of those trying to hire, 88% reported “few or no qualified applicants for the job.” Still, 21% of companies have plans to add to payrolls, the most since July.

Small business graph

But increasing wages has its consequences for business owners. Ten percent said labor costs were the biggest problem, 1 percentage point below the all-time high reached in September.

The group’s figures surface a day before the Labor Department’s jobs report, which is projected to show employers added 184,000 workers in November after 128,000 a month earlier.

NFIB’s survey reflects 500 responses of a random sample of 10,000 small-business owners.

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