Unfilled job openings hit another record high at U.S. small firms in July, according to the National Federation of Independent Business. Proving once again that markets work, the percentage of company owners planning to raise compensation also set a new record in the latest NFIB survey due out later today.

NFIB Chief Economist William Dunkelberg reports:

Small businesses continue to struggle to find workers to fill open positions. Forty-nine percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up 3 points from June and a record high reading. Unfilled job openings have remained far above the 48-year historical average of 22 percent.

Overall, 61 percent reported hiring or trying to hire in July, down 2 points from June. The issue will be whether the supply of labor will cooperate. Owners' plans to fill open positions remain at high levels, with a seasonally adjusted net 27 percent planning to create new jobs in the next three months, down 1 point from June's record high reading.

Operating almost like a law of physics, a labor shortage naturally and reliably motivates employers to increase the incentive for employees and potential employees to show up for work. Mr. Dunkelberg reports:

Seasonally adjusted, a net 38 percent reported raising compensation, down 1 point from June's record high of 39 percent. A net 27 percent plan to raise compensation in the next three months, up 1 point from June and a 48-year record high reading. There is little an owner can do to attract needed employees other than offer higher compensation.