Despite rebounding from the initial hit COVID-19 delivered back in March, permanent layoffs and job losses are threatening the economic recovery.
Permanent job losses rose by 345,000 in September, bringing the total of those who have been let go for good to 3.8 million—the highest in 7 years. Although the U.S continues to add jobs and temporary layoffs have fallen to 4.6 million, those indicators have masked the true economic damage that the coronavirus has caused to the U.S. economy. At the current rate of recovery, the U.S would not return to pre-COVID levels of employment until the end of 2021. According to Federal Reserve Bank of Atlanta President Raphael Bostic, the data spells out a pretty clear picture.
“Widespread permanent job loss could become a material risk to the recovery,” Bostic said Monday speaking to the Securities Industry and Financial Markets Association. “The data on this is clear: Permanently laid-off workers find it far more difficult to rejoin the labor force. This would make recovery more difficult to sustain.”
Bostic also emphasized that job losses so far have hit women and minorities especially hard in services occupations. As permanent losses continue to mount, those groups will likely see increased inequality and suffer more than others in the long term.
“An unnecessarily slow labor market rebound could just drive historic wedges deeper, continuing to exacerbate the geographic, racial, gender, and income disparities in our economy,” Bostic said. “The people who are often least equipped to weather a prolonged bout of unemployment are bearing the brunt of this health crisis and economic downturn.”
Although Bostic agrees with the Fed’s current interest rate policy of near-zero, he is acutely aware that the bank does have limits. Adjusting some of its lending facilities towards groups that have been more adversely affected by the pandemic is an option. But the details of those adjustments and when they would be enacted are unknown.
“Fiscal policymakers clearly have a significant role to play in ensuring that the economic disruptions don’t become deeply rooted, that the wedge does not continue to widen these disparities,” Bostic said.
With daily coronavirus cases at all-time highs and winter setting in across the country, it will be a balancing act to keep the virus in check and businesses open. Failure to do so could result in a continued rise in permanent job losses and an even slower economic recovery. With the right guidelines in place, however, there is still a chance for businesses to function safely and keep the economy thriving—even in a new normal.
After losing 13 employees to drugs, this restaurant hires recovering addicts
(BUSINESS) After losing 13 people to addiction-related deaths, DV8 Kitchen is a restaurant and bakery staffed 100% by recovering substance users.
The United States has been fighting a drug epidemic for decades. According to the CDC, the number of drug overdoses has significantly increased since 1999. From 2018 to 2019, even though heroin-involved death rates decreased by 6%, opioid-involved deaths increased by 6%, and synthetic opioid-involved deaths increased by 15%. Although the government keeps throwing money toward drug addiction and recovery, the problem doesn’t seem to be going away. After losing 13 people to addiction-related deaths, a Lexington, Kentucky restaurant decided to focus on giving employees a second chance. DV8 Kitchen is a restaurant and bakery staffed 100% by recovering substance users.
Second chance employment
According to its website, “DV8 Kitchen was developed and operates as a second chance employment opportunity for people who are trying to redirect their lives. People in the early stages of substance abuse recovery often find it difficult to find employers willing to take a chance on them.” It’s working. The company opened a second location to give more people a chance to thrive. Other restaurants and employers can learn from them through training and modeling. DV8 Kitchen isn’t just changing recovering substance users, but they’re changing the restaurant industry by teaching those working in it how to combat addiction.
How big is the problem?
A recent report from the Substance Abuse and Mental Health Services Administration (SAMHSA) reveals that 20.4 million people aged 12 and older experienced substance use disorders in 2019. Another 2.1 million people in the U.S. suffered from an opioid use disorder related to prescription opioids. Employment is an important part of recovery. Studies show that individuals who are employed are less likely to have parole violations and criminal activity. There are higher rates of abstinence from substance abuse when a person is employed. Recovering addicts often face many hurdles in finding employment, from criminal history to scheduling conflicts with treatment, and poor work history. Being employed significantly contributes to a positive quality of life and helps individuals transition from addiction treatment back into the community.
Help those in recovery
Rob Perez, one of the founders of DV8 Kitchen, a 501c3 organization, says, “if every American business decides to hire one person that only wanted a job, but really needed it, we could make a massive difference in this country.”
$100m reimagined convenience store startup to open 25 stores in 2022
(BUSINESS) Foxtrot is looking to redefine the convenience store as we know it. This startup is looking to make it a whole new experience.
Move over 7-11, there’s a new player in town! There’s always room for competition, even in the world of convenience stores. Yes, you read that right, Quick Trip has some serious competition from a newcomer, Foxtrot.
Foxtrot is a curated, modern convenience store offering a brisk 30-minute delivery and 5-minute pick-up. It was created by Mike LaVitola and Taylor Bloom in 2014. These stores will undoubtedly be popular in walkable areas, but also with their online ordering convenience. This modern version of a convenience store offers the combination of an upscale corner store with a digital-first e-commerce platform. Sounds pretty glorious, right?
However, the original convenience store is safe as long as people are traveling and need to stop for gas or a restroom break. If you’re from Texas, then you know and love, Buc-ee’s, the Texas-born chain. Buc-ee’s have been creating their own in-store products garnering a cult following among their customers. Still, Buc-ee’s doesn’t have an online ordering or delivery option unless it’s offered through a third party.
Foxtrot has raised $160 million in Series C funding and they are expecting to open 25 locations in many cities in 2022. There are a few different levels of funding. If a company makes it to Series C funding, they are already successful and looking to expand or develop new products per Investopedia.
According to Retail Dive, “About half of the new stores will be in Chicago, Dallas and Washington, where all of the 16 stores Foxtrot currently operates are located, LaVitola said. The tech-focused retailer is also planning to begin operations in Boston and Austin, and intends to open four or five new stores in each of those cities during the next year and a half, he said.”
Foxtrot is testing out technology equipment that would allow customers to leave the store without stopping to checkout at the counter. They plan isn’t to go entirely self-service, but as the creator LaVitola stated, “the more hours we can allocate towards sampling and storytelling and interacting with customers and less [on] tasks that don’t add on to value, like checkout, that’s great.”
Foxtrot is redefining convenience by including carefully curated products. They aim to offer local popular products as well core pantry items. They aim to make the commonly unpleasant experience of convenience stores enjoyable. Let’s hope they succeed.
What small business owners can learn from Starbucks’ new D&I strategy
(BUSINESS) Diversity and inclusion have been at the forefront of Starbucks’ mission, but now they’re shifting strategy. What can we learn from it?
Starbucks was one of many companies that promised to focus on diversity and inclusion efforts after the death of George Floyd by Minneapolis police in 2020. What sets Starbucks apart from other companies were its specific goals.
How It Started
They began with hiring targets and have now added goals in corporate and manufacturing roles. Starbucks’ plans and goals revolve around transparency for accountability. They released the annual numbers for 2021 as a way to help hold themselves accountable. The data they’ve released so far show that they’ve met nearly a third of their 2025 goals according to Retail Brew. Because of this information, we can see why they are choosing to move in the direction of manufacturing and corporate jobs. In 2021, POC’s fell to 12.5% of director-level employees from 14.3% in 2020 in manufacturing.
How It’s Going
Per Starbucks’ website stories and news, “[I]t will increase its annual spend with diverse suppliers to $1.5 billion by 2030. As part of this commitment, Starbucks will partner with other organizations to develop and grow supplier diversity excellence globally.” To put that into perspective, they spent nearly $800 million with diverse suppliers in 2021. With these moves, by 2030, it will increase by almost double.
As part of their accountability and progress, they plan to partner up with Arizona State University to give out free toolkits to entrepreneurs on fundamentals for running successful diverse-owned businesses. Another goal they’ve listed is to boost paid media representation by allocating 15 percent of the advertising budget to minority-owned and targeted media companies to reach diverse audiences.
At the heart of all this information on their goals and future plans, data transparency and accountability are what’s forcing them to look at the numbers to make specific goals. They are doing more than just throwing money at the problem, they are analyzing how they can do better and where the money will make a difference. Something that, as entrepreneurs, we should all do.
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