Business Update – June 23 2021
What’s the perfect number of hours to work each day? Research shows that five hours seems to be the maximum that people can focus and be creative. The constraint of a shorter workday can also increase productivity as people are forced to find ways to get their work done in less time. While a shorter workday gives people more time for other pursuits, it also has several downsides. People have less time to interact and develop relationships with co-workers. Getting more work done in less time can be stressful. Some jobs, such as caretaking or manufacturing, are not so easily performed in shorter workdays, which may lead to new kinds of inequality in the workplace. But in the wake of the pandemic, many people want increased flexibility in how they structure their workdays, and many employers are more open to new schedules that help people work to their strengths and maintain well-being.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Administration of the Paycheck Protection Program and COVID-related loans and grants were the responsibility of the Small Business Association. However, due in part to the extraordinary demands for funds, the SBA fell short of helping all small business owners who needed funds. Since March 2020, the SBA issued close to $211 billion in loans, three times as much as in the previous 68 years. The agency fell short because it did not have the leadership or systems in place to quickly respond to a national crisis of the magnitude of the pandemic. The overwhelming demands on the SBA meant that many small business owners were left waiting in the dark about their applications while the agency struggled to respond to a deluge of applications. The speed and lack of timely safeguards also made it possible for many applicants to exploit those loopholes to receive funds they were not entitled to.
Restaurant Revitalization Fund
When the Restaurant Revitalization Fund was created by Congress, the first 21 days of the program were supposed to prioritize underserved groups such as women, veterans or members of certain cultural and racial groups. However, because demand for funds was far in excess of the allocation from Congress, restaurant owners outside of those priority groups sued because they had no opportunity to apply. Judges in Texas and Tennessee have agreed with those legal challenges, so nearly 3,000 restaurants that were promised funds have been told their approval has been revoked. They will only receive funds after all other applications have been reviewed, which makes it unlikely that they will receive anything at all. A bill has been introduced that would add additional funds to the program, but its prospects are not clear.
Monthly Child Tax Credit Payments
Starting next month, parents can begin receiving monthly payments of up to $300 per child as an advance against their child tax credit. However, some parents may want to opt out of receiving monthly payments. Because this is an advance on a tax credit, families who tend to owe money to the IRS when they file their tax returns may be hit with a surprise tax bill. Other families prefer to have a large lump sum when they file their tax returns rather than smaller amounts throughout the year. For higher-income families, receiving an advance on their child tax credit may complicate their tax planning.
The IRS has set up a webpage dedicated to the advance child tax credit, which currently only allows non-filers to submit information so that they can receive payments. The IRS plans to provide additional tools to allow families to determine whether they are eligible and for how much, and to check on the status of their advance payments and to opt out of receiving payments, but those tools are not yet available.
Offering the option for remote work was supposed to help keep employees engaged – and more importantly – loyal to their employer. However, research from Korn Ferry indicates that the largest group taking part in 2021’s “Great Resignation” is those working remotely. Many remote workers are quitting when employers are asking them to return to the office, but many are quitting even with the option to remain remote. Some are leaving due to problems with managers unaccustomed to supervising remote teams while others are taking more control of their careers to find workplaces that are better aligned to their values. Offering remote work opens up a wider audience for recruiting, but it can also be harder to align those workers with a company’s culture.
REOPENING THE OFFICE
According to Gallup’s latest survey of workers around the world, U.S. workers are among the most stressed in the world. Women were especially stressed in the U.S., due in part to the expectation that they will be primary caregivers to children and to their predominance in low-paying service jobs which were disrupted in the pandemic. Younger workers expect their workplaces to provide more than just a paycheck, which means that employers will need to help improve employee well-being if they want a resilient and loyal workforce.
Only 18% of employees want to return to work as it was before the pandemic, which means that most employees will not be thrilled about coming back to the office. An article in Harvard Business Review has pointers for transitioning your team back to the next normal for your business. First, being transparent about all changes as those changes are announced will help manage expectations. Involving the team in implementing any new work from home policies can help everyone buy into it and be willing to help out those who need more flexibility. Some team members may need emotional space to grieve or otherwise come to terms with the impact of the pandemic.
Weekly jobless claims jumped last week by 37,000 over the previous week’s level of 375,000, increasing for the first time since April, according to the Labor Department. New applications for Pandemic Unemployment Assistance (PUA) also climbed by nearly 47,000. The PUA program offers jobless benefits to contractors, gig workers and others who don’t qualify for traditional unemployment. However, some note that weekly numbers can be volatile due to inconsistent reporting and backlogs in state unemployment offices.
U.S. home prices are up a record 13.2% compared to last May, according to Zillow. Some cities, such as Austin, Phoenix, and Salt Lake City, saw prices rise by 20% or more. Low mortgage rates, low supply and increased demand are all contributing to a hot housing market, with many homes selling in under a week. Rents are also up 5.4% compared to last May.
- IRS resources for stimulus payments:
- The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
- Entrepreneur put together a listing of free tech resources for remote work
- The Consumer Financial Protection Bureau has warnings about COVID-related scams
- Fast Company has a listing of the best productivity apps for 2020
- The Louvre has digitized 482,000 artworks from its collection
- PC Magazine explains how to carry your vaccination card on your phone
- How to create a strong password
We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!