NFIB Weekly News
Leading the News
NFIB’s Harned Argues For The Necessity Of The Safe To Work Act
Law360 (9/18, Campbell, Subscription Publication) reported on the current state of COVID-19 liability for employers as the Safe to Work Act, along with other pandemic relief legislation, remains stalled in Congress. The article quotes NFIB Legal Center Executive Director Karen Harned as saying the Safe to Work Act is necessary for businesses, because while liability suits are still fairly uncommon, “Coronavirus suits may follow a similar trajectory as asbestos litigation, which has stayed consistent despite expectations that it would taper off years ago,” adding “just because there’s not a flood right now doesn’t mean there won’t be one later, or that it won’t be a steady stream for years to come.” The article noted that the Safe to Work Act “would simultaneously empower workers to seek damages when they contract the novel coronavirus on the job while shielding all but the most reckless employers from legal liability,” though it would not preclude “enforcement actions by the U.S. Department of Labor.”
Small Business Optimism Rises in August Business Climate
The NFIB Small Business Optimism Index (9/8) was slightly above its historical average thanks to an increase of 1.4 points in August, rising to 100.2. NFIB’s Chief Economist Bill Dunkelberg was quoted as saying, “We are seeing areas of improvement in the small business economy, as job openings and plans to hire are increasing, but many small businesses are still struggling and are uncertain about what the future will hold.” The NFIB’s Uncertainty Index also rose “in August, to 90, the second-highest reading since March 2017.”
NFIB Report: 21% Of Small Businesses Planning To Create New Jobs
NFIB’s Research Center released its August jobs report, which indicates that 21% of small businesses plan to create new jobs in the next three months. Bloomberg (9/3, Golle) highlights the report, writing, “The National Federation of Independent Business said Thursday that a net 21% of small firms in August were planning to create new jobs, up 3 percentage points from the prior month and the fourth straight increase. Some 33%, the most since March, said they had open positions they were unable to immediately fill.” NFIB’s Chief Economist Bill Dunkelberg was quoted saying, “The small business labor market is recovering and moving in the right direction. ... However, there is still uncertainty and many small businesses are counting on additional financial assistance.” This story also appeared in The Washington Post (9/3, Golle).
Fed, Treasury Pressed To Expand Aid To Small- And Mid-Size Businesses
The AP (8/29, Gordon) reported, “With the economy still in the pandemic’s grip, the Federal Reserve is facing a decision on whether to stretch an emergency lending program in a way that could bring more risk for the government and taxpayers,” and “lawmakers are pressing the central bank to deliver more aid to struggling small and mid-sized businesses.” The Treasury Department “is guaranteeing the Fed’s lending programs – hundreds of billions each – to corporations, smaller businesses and state and local governments.” A “bipartisan group of over 100 U.S. House members pushing the changes, led by Reps. Taylor and Al Lawson, D-Fla., have asked Mnuchin and Powell to set up a Treasury-backed lending program for struggling companies that issue debt tied to their commercial mortgages, which is bought by investors.”
Almost Half Of PPP Borrowers Anticipate Needing Additional Support
Forbes (8/14, Frankel) reported, “Since the Paycheck Protection Program (PPP) stopped taking applications on Aug. 8, small businesses struggling in the wake of the COVID-19 pandemic are left with few options for additional financial assistance.” However, “Nearly half of PPP loan borrowers anticipate requiring additional financial support over the next year, according to a National Federation of Independent Business (NFIB) Research Center survey.”
Small Business Optimism Drops In July
The NFIB Small Business Optimism Index (8/10) fell 1.8 points to 98.8 in July, a level near the historical average for the survey. Owners are tempering their expectations for economic conditions in the future, as the COVID-19 pandemic is expected to continue. NFIB Chief Economist Bill Dunkelberg is quoted saying, “This summer has been challenging for many small business owners who are working hard to keep their doors open and remain in business. ... There is still plenty of work to be done to get businesses back to pre-crisis numbers.”
Yelp Data Shows 60% Of Pandemic Closures Permanent
The Hill (9/16, Coleman) said a Yelp report shows that around 60% of business closures that have taken place since the beginning of the pandemic are permanent. In total, 163,735 business have closed between March 31, shortly before most US shutdowns, and August 31. “The restaurant industry has taken a particularly hard hit during the pandemic, with 32,109 restaurants on Yelp closing and 19,590 of those – 61 percent – being permanent. The bars and nightlife industry has seen 6,451 closures, 54 percent of those are permanent.” In all, the states with the highest unemployment rates saw the highest closure and permanent closure rates.
Fed To Keep Near-Zero Interest Rates Until Inflation Target Exceeded “For Some Time” Small Business Marketing
Reuters (9/16, Saphir) reported that last Wednesday, the Federal Reserve’s Federal Open Market Committee decided to keep interest rates near zero and “made a bold, new promise: to keep them there until inflation is on track to ‘moderately exceed’ the US central bank’s 2% inflation target ‘for some time.’” This guidance “marks a monetary policy shift, first announced by the Fed last month, that is aimed to offset years of weak inflation and allow the economy to keep adding jobs for as long as possible.” In a news conference after the announcement, Fed Chair Powell said, “Effectively what we are saying is that rates will remain highly accommodative until the economy is far along in its recovery. ... That should be a very powerful statement in supporting economic activity.” Bloomberg (9/16, Saraiva, Condon) said the statement “reflects the central bank’s new long-term policy framework in which officials will allow inflation to overshoot their 2% target after periods of under-performance.” Powell said, “This very strong, very powerful guidance shows both our confidence and our determination. ... We’re strongly committed to achieving our goals and the overshoot.”
Some Believe End Of PPP Will Lead To Closures, Bankruptcies
The Tampa Bay (FL) Business Journal (9/18, Subscription Publication) reported that optimism for another round of funding for the Paycheck Protection Program “is drying up after reports out of Washington indicate that another round of PPP funding — or any other small-business stimulus legislation — is unlikely to be passed this year.” According to an NFIB survey, 47 percent of PPP recipients anticipated needing additional help in the next 12 months, and 21 percent believed their businesses will have to close within six months if help is not forthcoming.
Pandemic Could Push US Into Double-Dip Recession If Congress Doesn’t Pass New Stimulus: Experts
USA Today (9/20, Davidson) reported the US economy “is at a crossroads, with some analysts saying a failure by Congress to pass another stimulus package, even as the COVID-19 pandemic continues to spread, would tip the nation back into recession.” Lawmakers “remain deadlocked over a measure to provide another round of $1,200 checks to most households and more aid to struggling small businesses and unemployed Americans.” Mark Zandi, chief economist of Moody’s Analytics, said: “If they don’t” approve another stimulus, “they’re taking a huge risk.”
More Than 1M People Behind On Mortgages Despite COVID Forbearance Measures
The Wall Street Journal (9/17, A1, Ackerman, Subscription Publication) reported mortgage-data firm Black Knight said 1.06 million homeowners are past due on their mortgages by at least 30 days, having fallen through the Congressional safety net allowing forbearance of federally guaranteed mortgages.
New Unemployment Claims Fell Again Last Week, But Remain High
The AP (9/17, Wiseman) reported the Labor Department announced last Thursday that “the number of Americans applying for unemployment benefits fell last week to 860,000.” The AP said that is “a historically high number of people that illustrates the broad economic damage still taking place nine months after the first case of COVID-19 was detected in the U.S.” According to the Labor Department, jobless claims “fell by 33,000 form the previous week and that 12.6 million are collecting traditional unemployment benefits, compared with just 1.7 million a year ago.” The AP added, “Employers added 10.6 million jobs from May through August, but that’s still less than half the jobs lost in March and April.”
Facebook Unveils Business Suite App For SMBs
ZDNet (9/17, Gagliordi) reported Facebook “is rolling out a new app for small business owners that lets them manage their business pages or profiles across Facebook and Instagram.” Facebook Business Suite “will enable businesses to post to Facebook and Instagram at the same time, and manage and receive messages, notifications and alerts in one place.” The interface “will also provide access to engagement metrics with a Facebook and Instagram insights tab.”
Treasury-Funded Small Business Relief Grants Helping Tribes Withstand COVID-19’s Economic Impact Wages and Benefits
Char-Koosta News (9/16) reported, “In response to the devastating economic impact of COVID-19, the Confederated Salish and Kootenai Tribes of the Flathead Reservation are designating over $1 million in financial assistance to CSKT-member-owned small businesses.” The Treasury Department funded the CSKT Small Business Relief Grants that “are part of the Tribal Council’s Economic Recovery and Revitalization plan to help businesses adapt to the challenges of the global health pandemic.” The CSKT Economic Development Office “will launch the grant application website portal in the coming days.”
NJBIZ Discussion Features Pandemic-Related Advice For Small Businesses
NJBIZ (NJ) (9/14, Lindner) reported on “NJBIZ Conversations: Startups And Early Stage Investing discussion,” which featured insight and advice regarding “how small businesses can cope with the pandemic.” Many small business owners initially believed that “the shutdown would only last a few weeks; then maybe for three months.” According to NJBIZ, “Funding was one way small businesses were able to weather the economic climate.” SmallBusinessLikeAPro.com founder Andrew Frazier, who was among the participants of last Monday’s discussion, “said that money from the Cares Act was a godsend for some of these small businesses and many would not have survived without it.” NJBIZ adds, “According to Frazier one of the best programs available – one that many businesses would not have been able to get in other circumstances – was the Economic Industry Disaster Loan (EIDL).” In addition, there were many “alternative products coming out – and small business owners indeed found themselves relying on the new Small Business Administration programs.”
Amazon Launchpad Celebrates Five Years Of Helping Small Businesses, Startups
Homeworld Business (9/3, Kramer) reported, “Amazon Launchpad, a program dedicated to empowering startups and other innovative new brands to grow in Amazon’s store, is celebrating five years of launching new products.” Launchpad has helped “startups and small businesses launch tens of thousands of products across 30 categories in the U.S. alone, with nearly 400 U.S.-based startups and small businesses having surpassed $1 million in annual sales in Amazon’s store since the program launched in 2015 – and nearly 40 have surpassed $10 million in annual sales, according to the company.”
Amex Offers Longer Payment Terms For SMBs
Bloomberg (9/1, Surane) reported American Express is letting small businesses have more time to pay off certain purchases. Amex Vice President of Global Commercial Card Lending Brett Sussman said, “We’ve long heard from our card members who are small-business owners that increased payment flexibility is important to them.” This followed other bets by the card issuer that small businesses’ recovery will help drive profit, including its acquisition of digital SMB lender Kabbage in August.
SBA Programs Support Veteran Small Business Owners
The Lahaina (HI) News (8/27) reported the SBA Veterans Small Business Advisory Committee is holding “virtual public meetings next week via Microsoft Teams. The U.S. Small Business Administration’s Interagency Task Force on Veterans Small Business Development (IATF) will meet on Sept. 2, and the Advisory Committee on Veterans Business Affairs (ACVBA) will hold its virtual public meeting on Sept. 3.” SBA Office of Veterans Business Development Associate Administrator Larry Stubblefield said, “Now more than ever, it is critical for our veteran small business advisory committees to discuss challenges faced by the veteran small business community and how we can expand the resources available to them..”
Commission On Civil Rights Calls For End To Program That Permits Subminimum Wage For Workers With Disabilities
The Hill (9/17, Budryk) reported that last Thursday, the US Commission on Civil Rights “called for an end to a program that allows employers to pay disabled workers less than the minimum wage.” In a report Thursday, “the commission said both the Labor Department and the Justice Department have failed to regulate the program and let it fall short of meeting the needs of disabled people. Overall, the commission said, the program has been ‘inconsistent with the civil rights protections to which people with disabilities are entitled.’” The commission “called for Congress to phase out the program, noting that similar phaseouts have been implemented at the state level to keep disabled people from losing access to key services.”
WSJournal: Trump Policies Lifted Wages, Benefited Lower-Income Workers Before Pandemic
In an editorial, the Wall Street Journal (9/16, Subscription Publication) said Census Bureau data showed lower-income workers and minorities benefited from the Trump Administration’s economic policies before the coronavirus hit, and warns voters to consider what kind of economy they want once the pandemic is over.
Most Retailers Have Ended Pandemic-Related Wage Increases; Some Have Increased Wages Permanently
The Minneapolis Star Tribune (9/3, Ewolt) reported that with some exceptions, “most of the temporary pay bumps put into effect as the coronavirus pandemic started to hit the U.S. have expired.” A few retailers have raised hourly wages permanently, “but for the most part, as demand for grocery staples levels off, the hazard pay is going away as well.” One retailer that instituted a permanent wage increase is “Target, which had also added hazard pay in the spring,” and then “permanently raised [its] minimum wage to $15 an hour in July, when the temporary bump ended.”
US Economy Added 1.4 Million Jobs In August; Unemployment Fell Below 10%
The AP (9/4, Rugaber) reported the Labor Department announced on Friday that “unemployment dropped sharply in August from 10.2% to a still-high 8.4%, with about half the 22 million jobs lost to the coronavirus outbreak recovered so far.” According to the AP, “Employers added 1.4 million jobs last month, down from 1.7 million in July and the fewest since hiring resumed in May. And an increasingly large share of Americans reported that their jobs are gone for good, according to the Labor Department report.”
New Unemployment Claims Down Slightly To 1.006M
Reuters (8/27, Mutikani) reported on Thursday the Labor Department reported that “initial claims for state unemployment benefits fell 98,000 to a seasonally adjusted 1.006 million for the week ended Aug. 22.” That was in line with economists polled by Reuters who estimated 1.0 million claims.
WPost: Unemployed Americans “Furious” Congress Let $600 A Week Benefit Expire
The Washington Post (8/27, A1, Rosenberg, Long) reported that Congress “split town in August after letting the $600-a-week unemployment bonus that millions of people...have been relying on expire,” and “millions of desperate Americans, many of whom have never relied on emergency government assistance before, are flabbergasted and furious, believing they have been cut loose by a Washington political structure that doesn’t care about their predicament during the pandemic.” The Post “spoke to 20 people who have lost their livelihoods in recent months, and all said they felt immense pressure to stay afloat without the extra $600.” In addition, “every person interviewed said they were furious at Washington policymakers for letting such a critical benefit lapse amid the nation’s worst economic crisis in a century.”