City small business owners call for end of $600 federal unemployment benefit - Crain's New York Business

City small business owners call for end of $600 federal unemployment benefit - Crain's New York Business


City small business owners call for end of $600 federal unemployment benefit - Crain's New York Business

Posted: 21 Jul 2020 08:39 AM PDT

As the clock ticks down on the expiration of $600-a-week federal unemployment benefit, small business owners are welcoming the end of a program that they say has hindered their ability to hire and retain employees.

Susannah Koteen, owner of Lido's in Harlem, estimated around 50% of her staff has not returned to work because of the total income provided in weekly unemployment payments.

"It's been a little hard to get people to come back to work," she said. "Why would you come to work when you can make the same number staying home?"

Together with a maximum regular state unemployment of payment of $504, some weekly income packages in New York that include the federal unemployment benefit can reach $1,104 a week.

Helana Natt, executive director of the Greater New York Chamber of Commerce, estimates that 1/3rd of the hundreds of businesses she speaks with on a weekly basis have experienced trouble hiring workers back. She is adamant that workers will not return to their jobs if the supplemental unemployment benefit is extended even further into the year.

"They cannot extend the $600 if they want to start stimulating the economy. That's the bottom line," she said. "That $600 was a stimulus, it's not unemployment, and I think people are confusing the two together."

For James Mallios, owner of two restaurants in Manhattan and Long Island, the lack of response he saw in June in applications to open job opportunities at his restaurants has stayed with him. He said applications rose in July once people realized the assistance would run out.

"Somehow, we need an alternative to the $65,000-a-year job for not going to work," he said. "We need one that helps people who are in difficult financial situations but doesn't revert back to that June time when we couldn't get anyone. That would be bad."

But even if the small business community is certain that an extension would prove ruinous to their workforce operations, some economic experts believe that doing away with it would also hurt the city's economy.

A fifth of eligible city workers are currently unemployed. James Parrott, an economist at the New School's Center for New York City Affairs, estimated that 1.3 million New York City residents are receiving pandemic unemployment assistance, which he calculated translates into a total income benefit of $800 million a week.

"That's a lot of consumer spending that is likely to go away if they don't extend the $600 weekly supplement," he said. "The overall level of consumer spending in New York would take a nosedive from the already depressed level it exists in now."  

The decline in consumer spending could have catastrophic consequences across the small businesses landscape.

Already, businesses in Brooklyn are feeling the effects of an uncertain economic climate. A new study by the Brooklyn Chamber of Commerce found that half of 233 Brooklyn small businesses across various industries said they will struggle to remain open over the next three months. Nearly a third—28%—of those businesses said they did not pay rent in July.

"A lot of small businesses still have significant risk of closing altogether because they cannot operate at such a reduced rate of capacity," Parrott said. "The only solution is massive federal economic assistance."  

Some small business owners feel caught in the middle, unable to lure back workers with a competitive wage and uncertain if their companies would survive if they could.

Roni Mazumdar, owner of three Manhattan restaurants, recognizes that even if people are "forced" to return to work by the cancelation of federal benefits, social distancing restrictions mandated by local governments still prevent the same amount of economic activity from taking place and consumer spending is invariably reduced on the year due to fears associated with the coronavirus.

"For us to take that away but for me not be able to offer the job, how does that work?" he said. "I cannot give enough hours to my employees for them to sustain themselves, but neither is there enough of a customer base."

"That's the irony of it all," he added.

Amazon Calls Itself Small Business Pal With Bezos Set to Testify - Washington Post

Posted: 21 Jul 2020 05:53 AM PDT

Small- and medium-sized U.S.-based sellers averaged more than $160,000 in product sales on Amazon in the year ended May 31, up from about $100,000 during the prior period, the company said in a report released Tuesday. These merchants sold 3.4 billion products during the period, up from 2.7 billion a year earlier.

A periodic disclosure detailing Amazon's small-business offerings from seller support to cloud-computing software, the report didn't offer specific explanations for U.S. merchants' rapid sales gains. But a spokesman said sellers continue to broaden their product offerings and take advantage of tools Amazon built to help reach customers. Amazon, like many online retailers, also was inundated with orders earlier this year from people sheltering at home as the coronavirus pandemic spread.

Amazon's positioning as a friend of small business may help blunt criticism that the company abuses its market power. Bezos last year used his closely watched letter to shareholders to highlight the success of third-party sellers. And on Tuesday, global consumer chief Jeff Wilke talked up Amazon's support for small businesses. "Our success depends on their success," he said.

But critics say Amazon has used its trove of data on merchants to identify best-sellers and then gin up copycat products. The company says use of data from individual sellers isn't allowed, but the Wall Street Journal reported earlier this year that Amazon teams found a way around the prohibition. Some merchants also say Amazon uses its clout as the world's largest e-commerce company to charge ever-rising fees to list and advertise on the site.

In addition to the scrutiny from Congress, Amazon faces probes by the U.S. Federal Trade Commission, the European Commission and the state of California, which are all said to be examining the digital marketplace.

©2020 Bloomberg L.P.

GOP Will Back More Stimulus Checks and Small-Business Loans, McConnell Says - Washington Post

Posted: 21 Jul 2020 08:35 AM PDT

"The American economy needs another shot of adrenaline," McConnell said, also noting that infections are "climbing in hot spots around the country."

The White House and Congress have only a few weeks to come up with another stimulus before lawmakers take a scheduled August break and the $2.9 trillion in economic relief passed earlier this year begins to dry up.

Mnuchin and House Speaker Nancy Pelosi, the two key parties in the talks, both said they aim to wrap up negotiations by the end of next week. It's an ambitious goal given that Democrats and Republicans remain far apart on how big the package should be and there are differences within the GOP over what to include.

President Donald Trump, who met Monday with McConnell and House GOP leader Kevin McCarthy, wants a payroll tax holiday included in the plan. But that's gotten a cool reception from Senate Republicans. The White House also has balked at including money to distribute an eventual vaccine and funding to help states with testing and tracing, both of which have support in Congress.

Mnuchin and Meadows plan to talk over the outlines of the Republican plan during the regular weekly luncheon Tuesday with GOP senators. They also are scheduled to meet with Pelosi and Senate Democratic leader Chuck Schumer later in the day.

Meadows said before heading into the lunch that talks were still in early stages. But he indicated the administration was flexible on the terms of a deal, including the roughly $1 trillion cap that the White House and congressional Republicans have set as a goal. Democrats have proposed a $3.5 trillion package of relief measures.

"Everyone looks at a $1 trillion stimulus plan as the goal," Meadows said. "But that's going to be up to the senators and House."

McConnell said there will be second round of the Paycheck Protection Program for small businesses, but "targeted" to businesses most affected by the pandemic. He also said there will be funding to reimburse businesses for the costs of "safe workplaces," including personal protective equipment, testing, cleaning and remodeling "to protect workers and entice customers."

Republicans also want another round of direct payments "to help American families keep driving our national comeback," he said.

There also will be money for some child-care assistance and funding for a vaccine, McConnell said. The Republican plan also will have $105 billion to aid schools in safely reopening.

There were signs of possible compromise on extending the supplemental unemployment insurance that was part of the stimulus measure passed in March. It gave laid off workers $600 a week in additional benefits, but Republicans argued that it created a disincentive for returned to work in some areas of the country because unemployed individuals could get more than they earned at their jobs.

House Majority Leader Steny Hoyer, a Maryland Democrat, said there would be "some discussion" about how big the federal supplement should be in the next legislation, suggesting it could be lower than the $600 payments, which expire at the end of this week.

One of the biggest hurdles to an agreement may be aid to state and local governments. Democrats included $1 trillion in such aid in their proposal. Republicans said money left over from early stimulus should be spent first.

(Updates with remarks by lawmakers, Meadows beginning in fifth paragraph)

©2020 Bloomberg L.P.

Clark County small-business owners fear possible 'phase rollbacks' - The Columbian

Posted: 21 Jul 2020 06:05 AM PDT

March was a nightmare scenario for any restaurant when the pandemic struck and state restrictions limited business practices: Layoffs came. Tens of thousands of dollars worth of food and stale beer were thrown away. There was no profit for the foreseeable future.

Barlows Public House co-owner Brian Rummer recalls being thrown into the restaurant's piecemeal business model of takeout and delivery service only. Luckily for him, Phase 2 allowed him to use his restaurant's outdoor space and find a steady source of revenue.

But now, just weeks after Clark County was on the verge of a less restrictive Phase 3, COVID-19 cases are spiking, and restaurateurs like Rummer are worried about a new nightmare: a rollback to Phase 1 that could permanently close up to half of local restaurants and cause many closures in other industries.

"I think it would be catastrophic for small businesses, especially for the restaurant business, which was hit the hardest," Rummer said on Friday, before a weekend that clocked 92 cases and three deaths in the county.

But at Barlows on Friday, things were operating at a steady pace. Rummer said he and most business owners who have been able to remain open are likely going to fully recover as long as there aren't phase rollbacks. Anywhere from 30 to 50 percent of restaurants might close under rollbacks, according to industry trade press and echoed by Rummer and the Greater Vancouver Chamber of Commerce President John McDonagh.

"They'll keep it together as long as we keep progressing toward a fully open market," McDonagh said.

Gov. Jay Inslee on Thursday said during a press conference that phase rollbacks in Washington were a possibility in the future, which in Clark County would put a halt to indoor dining.

"These are not decisions at the moment," Inslee said. "If these trends continue, we would have to look at the things that are least problematic for people's daily survival, least essential for our economy, and most dangerous by bringing people together in social settings. Clearly, those would involve bars. Those would involve indoor dining at restaurants.

"The things that were the last things to come out of shutdown would be the first things we'd have to go back on," he said.

Business worries

Employee retention is another threat to businesses under rollbacks, Rummer said. After the layoffs at the beginning of the pandemic and the subsequent rehirings during Phase 2, Rummer, like many business owners, has been rebuilding his staff. Having to do that again would be hard, he said.

Meanwhile, business owners are soon expecting to deal with the end of the Payroll Protection Program. The federal program, with funds mostly earmarked for payroll, is set to end Aug. 8 if it isn't extended.

If Clark County goes back to Phase 1, cutbacks could impact some construction and manufacturing, as well as in-home services including nanny and house cleaning, and nonessential office-based businesses. Restaurants and breweries would have to switch over to takeout and delivery. Barbershops and salons would close again.

"It's going to drive businesses out of Vancouver, out of the state," Rummer said. "I think they're going to give up."

Scott Bailey, regional economist for Southwest Washington, said that restaurants, retail and professional services would be hardest hit under a phase rollback. Real estate would also take a dip, as agents wouldn't be able to show homes in person.

Some manufacturing would have to stop under a rollback, although it's not clear what specific jobs would be considered "non-essential" and have to be cut. Manufacturers would likely see economic harm from a decline in product demand under rollbacks too.

Everything would likely lead to more unemployment insurance claims, he said.

Construction

Tracy Doriot, owner of Vancouver-based Doriot Construction, said the homebuilding industry is in the middle of a critical time of year that requires all hands on deck.

"This moment is our optimum time to do foundations, landwork, all those things, which sees us through the winter," he said. "If we were put on a hard stop now, we would be in trouble."

The industry isn't particularly worried, he noted, because there's an assumption that any rollback would likely be targeted to address the biggest
COVID-19 hot spots rather than imposing an across-the-board shutdown.

"At this point, I'm not too worried as long as the governor's focus is on the sociological conditions that are promoting the outbreak," he said.

Building and Industry Association of Clark County spokeswoman Andrea Smith offered similar comments. The construction industry is not expecting to be hit by any rollbacks, she said, because its leaders worked with Inslee's office to develop extra safety protocols for workers.

Still, Doriot added, any rollbacks are cause for concern among builders, because the resulting economic damage can still hit the construction sector indirectly.

"We are extremely concerned about pretty much all sectors of the economy affecting us," he said. "Sadly, money fuels our industry, and if people aren't making a living, they can't buy homes."

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