DENVER (KDVR) — Denver led the nation in small-business wage growth over the last year, though inflation has still outpaced those wage gains, resulting in an overall pay cut.

In the last year, Denver’s wages for small-business employees have increased 5.81%, according to the latest release from small business researcher Paychex.

Small businesses, which have fewer than 50 employees, represent the overwhelming majority of Colorado’s economy. According to the Colorado Office of Economic Development and International Trade, 99.5% of Colorado’s businesses meet the definition of a small business and all together employ 1.1 million Coloradans.

Inflation is at historic highs, nearing 8% nationally in the most recent 12-month stretch, meaning even the 5.81% wage increase means Coloradans are still making roughly $1,600 less in real dollars than they were a year ago.

Still, the 5.81% hourly earnings increase tops the other major U.S. metros. Tampa, Dallas and Miami come next with 5.77%, 5.58% and 5.32% increases, respectively. All major U.S. metros have seen wages rise by at least 3% in the last year.

Paychex reports that Denver’s small businesses now pay an average hourly wage of $34.40 — about $71,552 in gross pay per year.

Only a handful of cities — Boston, Seattle, Washington, D.C., San Francisco and Houston — have higher hourly earnings.