Business Update – October 20 2021
The pandemic may change business travel as we know it forever. The Global Business Travel Association reported a nearly 90% drop in business travel last spring, as businesses were forced to conduct business via Zoom. While travel is increasing compared to a year ago, it is still sharply down from pre-pandemic levels. Post-pandemic, virtual business meetings may continue to be the norm. Travelers who are willing to venture out may be able to reap substantial savings.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Monthly Child Tax Credit Payments
Four months in, and the IRS is still having problems with the advance Child Tax Credit payments. Some families are reporting delayed payments, payments in the wrong amounts, or extra checks sent by mail. Some families have had all these issues. The unpredictable nature of payment amounts and timing makes it difficult for the families who need the funds most to make financial plans.
As a reminder, if you want to opt out of future payments, you must opt out by the deadline for the next month’s payment. Check out the IRS FAQs where you’ll find everything you need to know about opting out in Section J.
As a means to fund the Biden administration’s ambitious infrastructure and social policy bill, one proposal is to require banks to report data to the IRS for accounts with total annual deposits or withdrawals worth more than $600. The intention behind this proposal is to identify accounts with large discrepancies between bank activity and income reported to the IRS to crack down on taxpayers who are not paying their full tax obligation. If enacted, this proposal could bring in as much as $460 billion in additional revenue over a decade. Outcry from banks and their customers is pressuring the administration to scale back the proposal and raise the reporting threshold to $10,000. Many are concerned about the invasion of privacy and the merit of providing additional data to the IRS, which already cannot keep up with its current obligations.
THE GREAT REASSESSMENT
Why are millions of younger workers leaving their jobs? Many of the theories arise from conjecture about what Millennial and Gen-Z workers want, resulting in a set of myths about the ways that younger workers think about work, burnout and exhaustion. However, simply listening to these younger workers can dispel these myths. One myth is that younger workers are more prone to burnout. However, research indicates that younger workers are simply more willing to admit to or talk about mental health issues at work. Simply opening a dialogue about mental health issues and helping employees of all ages access assistance can help retain key employees.
Besides mental health issues, workers in sectors from manufacturing to healthcare have been increasingly going on strike to protest long work hours, poor pay, unpredictable schedules, and poor benefits. Even with millions still unemployed, many are staying out of the workforce due to health concerns and lack of childcare, giving workers leverage with employers that they have not had in years.
It’s not just younger people who are leaving their jobs in record numbers, but mid-career employees with five to 15 years of experience are also leaving at a fast clip. Retention efforts that apply the same pre-pandemic strategies that used to work well as a one-size-fits-all approach aren’t working anymore. A tailored response that seeks to remedy the reasons why an individual is considering leaving can help reverse the tide of departures.
Since the pandemic began, 4.3 million fewer people are working, while employers struggle to fill 10 million job openings and satisfy consumer demand. Women, workers without college degrees, and workers in low-paying jobs are leaving in the highest numbers. Some economists fear that this may become a long-term trend that won’t reverse for several years, if ever. The usual pattern after a recession is that consumers are reluctant to spend, employers are slow to hire, and unemployed workers are eager to find jobs. Instead, that has reversed: consumers are eager to spend, employers can’t find enough workers, and the unemployed are reluctant to return to work. Employers are variously responding by increasing wages, employing labor-saving technology, requesting that workers to work overtime, or curtailing business hours.
REOPENING THE OFFICE AND REMOTE WORK OPTIONS
Now that some people are returning to the office, hybrid workplaces are encountering technical hiccups as they try to ensure equal participation between remote and in-person workers during meetings. With in-person meeting attendees masked, it can be difficult for remote participants to tell who is speaking or to easily join in the conversation.
Nearly 40% of U.S. households faced serious financial challenges during the pandemic, according to a recent survey. Of those who earn less than $50,000 a year, nearly 60% report serious financial challenges, and 30% have depleted all their savings. However, the survey also found that people and businesses that were already doing well before the pandemic have had fewer problems, with 49% reporting no change, 32% reporting that their situation was worse, and 20% reporting improvements in their financial situation.
Pandemic-related shortages in labor and materials are causing the highest rate of inflation seen in the U.S. in over a decade. The consumer-price index rose by 5.4% in September from its level a year before. Rising prices for food, energy, and housing are expected to keep inflation higher than normal though the first quarter of 2022.
For the first time since the pandemic began, initial jobless claims dropped below 300,000 to a total of 293,000 for the week ended October 9. Continuing claims also fell by 134,000 to 2.59 million, another low for the pandemic era. However, household employment is still more than five million less than the pre-pandemic level.
- IRS resources for stimulus payments:
- IRS information about the Advance Child Tax Credit 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
- 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!