NEW YORK (TheStreet) -- Paychex (PAYX) - Get Report CEO Martin Mucci explained the outsourcing solutions company's somewhat weak July survey results on small business job growth, which were released Tuesday morning, with CNBC's Brian Sullivan on "Squawk Box."

Small business job growth was down by 0.12% to 100.68 in July after increasing 0.21% to 100.81 in June, according to the Paychex IHS Small Business Jobs Index

"It was just a small drop in July after a pretty good increase in June, so we've been a bit choppy this year on the overall index but year to date we're up 0.3% so I think it's still positive. It's cautious but it's still positive," Mucci said.

The East coast is the country's strongest leader in small job growth, Mucci noted.

"New York State, New Jersey and the cities Boston, New York (City), Washington, Baltimore, they're coming back from lows. In the Southeast, that's where you're seeing the best sustainable growth," he explained, adding single home construction is a large contributor to this East coast growth.

However, areas in which minimum wage increased, job growth slowed, Mucci stated.

"The index seems to be about half a percent lower where minimum wages have gone up," he continued.

Overall, the country saw a 4% wage increase. "I think that's saying we're getting to that full employment number. You're seeing firms having to pay more to get the employees that they need," Mucci said.