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Unemployment still above 8%, Small Biz Tax Cut Act could help

Although unemployment numbers show signs of improving, in order to fall below the 8.0 percent barrier, more than just a weak spring of hiring could be necessary, but in an election year, it is unlikely the nation will see much action on the Hill.

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Unemployment making slight improvements

As a measure of the pace of layoffs, the number of people applying for unemployment benefits slid slightly last week by 1,000, according to the U.S. Labor Department who also reports that the four week average experienced its first decline since late March, marking a drop of 5,250 applications which many believe is a less volatile indicator than the weekly numbers.

When applications for unemployment benefits stay below 375,000 consistently, the implication is that job growth is strong enough to lower the unemployment rate, which has dropped a full percentage since August, but unemployment for April sits at 8.1 percent, still unable to break the 8.0 percent barrier.

This winter saw improvements in hiring, and the weak April has some worried that the gains from previous months may be lost as hiring remains weak this spring.

The Small Business Tax Cut Act

Representative Joe Bonner (R-AL) opined1, “Even as President Obama continues to push questionable government spending as the cure for an anemic job market, the House of Representatives has prescribed a robust treatment targeted to stimulate the country’s principal employers, small businesses. On April 19, the House passed the Small Business Tax Cut Act – the latest in more than two dozen bills also passed by the House since January 2011 to spur job growth.”

Rep. Bonner added, “Small businesses are the heart and soul of America’s economy — they are everywhere and form the backbone of our local communities. Collectively, they represent 99.9 percent of the country’s 28 million businesses and employ half of all private sector employees. Small businesses with less than 500 workers created 65 percent of all new jobs in America during the last 17 years.”

Concluding, Rep. Bonner said, “The Republican House’s latest effort to restore small business confidence is the passage of a 20 percent tax cut for businesses with fewer than 500 employees. The Small Business Tax Cut Act, which I supported, allows employers of less than 500 workers to take a tax deduction equal to 20 percent of their active business income.”

Job openings at four year high

Business Week reports2that the number of open job positions in America grew by 172,000 in April to 3.74 million, the most since July 2008, and that small companies were more optimistic on their outlook. BW notes that “more vacancies are a sign American companies were planning to expand at the end of the first quarter, undaunted by the jump in fuel costs or concerns that global economic growth will slow.”

Economist Lou Crandall told BW that the pickup is a “positive” development after a report last week showed payrolls in April grew at the slowest pace in six months.

“Businesses were becoming a bit more willing to commit to new hires,” Crandall told BW. “The progress is incremental at best and the levels are still very low.”

1 Rep. Bonner’s statement
2 Business Week report

Marti Trewe reports on business and technology news, chasing his passion for helping entrepreneurs and small businesses to stay well informed in the fast paced 140-character world. Marti rarely sleeps and thrives on reader news tips, especially about startups and big moves in leadership.

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Business News

Better.com CEO fires nearly 900 folks over Zoom, right before the holidays

(NEWS) Better.com CEO, Vishal Garg is no stranger to controversy, but now he emotionlessly laid off 900 employees, effective immediately, via Zoom.

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Better.com CEO Garg

The ironically named website, Better.com, is a mortgage originator with a 4 Billion dollar valuation. Better.com CEO, Vishal Garg is no stranger to controversy not only for alleged fraudulent activities at two previous business ventures and for allegedly misappropriating tens of millions of dollars, but also for the mistreatment of his employees. His now-infamous email, which was leaked by Forbes where he berated his staff, calling them “Dumb Dolphins” and claimed they were “embarrassing him”. One of his “most loyal lieutenants” had to be placed on administrative leave for, surprise-surprise, bullying.

Once again, Garg is making headlines for the mistreatment of his employees. He emotionlessly laid off 900 employees, effective immediately, via a Zoom call. Garg cites “stealing from co-workers and customers by only working two hours per week the as a reason for the mass lay off, claiming that some of his staff only worked two hours per week. What is important to remember, however, is that much of his staff are comprised of underwriters, who are capped at a certain number of files per day, and once they have completed those files, they cannot work again until the next day. This obviously means that “productivity” would look very different for underwriters as opposed to other members of staff.

He also laid off the entire diversity, equity, and inclusion recruiting team, showing what values are actually important to him, and apparently, it is not diversity and inclusion. He claims that Human Resources will be in touch with the recently laid off staff about severance, however, it is unclear what their severance packages will look like. To make matters worse this mass firing occurred just weeks before Christmas. Better.com recently became publicly traded and is prepping to end the year with more than a one BILLION dollar balance sheet.

To treat your employees so callously, and with no regard is totally unacceptable, and the common practice of treating your staff as commodities is becoming increasingly more intolerable. This behavior however is unfortunately not uncommon among CEOs, with an estimated 4%-12% of ALL CEOs exhibiting psychopathic traits, a statistic I was hesitant to believe prior to learning about Garg. And if you feel like you’ve been wrongfully terminated, check out our article to find the best next steps. 

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Business News

Toys R Us is coming back with a vengeance after a rough bankruptcy

(NEWS) Toys R Us is opening their newest store complete with a 2-story slide and ice cream parlor, as well as an exclusive partnership with Macy’s.

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Toys R Us

Millennials rejoice!

Toys R Us is back and better than ever. The toy giant filed for bankruptcy in 2017, which resulted in many nostalgic adults lamenting the loss of their favorite childhood toy store. Not only is Toys R US opening up a new 20,000 square foot location inside New Jersey’s Dream Mall, which will boast a two-story slide and an ice cream parlor, they are also partnering with Macy’s to have products available in 400 stores across the United States, as well as maintaining their presence abroad and online.

This store will be the first Toys R Us owned by WHP Global, who bought a controlling stake this year, but also the only store in the United States. Between big box retailers and one-click ordering with practically instantaneous shipping, many brick-and-mortar retailers just can’t compete. If that wasn’t challenging enough, many businesses face ever-shifting consumer demands, a dragging economy, and a global pandemic, making maintaining brick and mortar stores and businesses, even large ones, incredibly difficult.

Due to the Coronavirus pandemic, many businesses including JC Penney, J. Crew, and Neiman Marcus have faced the same fate and had to declare bankruptcy. However, bankruptcy is rarely the end for many companies. For companies, bankruptcy can mean many things, from reorganization to liquidation, and in some cases other companies get an opportunity to purchase these businesses, meaning consumers may see their favorite businesses return. Other companies choose to completely eliminate their brick and mortar stores entirely and return solely online.

Many stores and businesses are shifting their offerings, creating limited-edition offerings, and going to great lengths to stay in hopes to compete and stay relevant. For example, PetSmart is targeting pet parents this holiday season by offering matching, customizable pet and human sweaters, and holiday pet portraits. In keeping with the “ugly” holiday sweater craze, Microsoft created and sold out a minesweeper “ugly” sweater. Proactiv, which is a famous skincare brand known for its acne healing effects, is rebranding as Alcheeme and is expanding its product lines to offer solutions to many common skincare issues, including eczema, rosacea. And the Container Store is partnering with vendors such as Circuit, The Home Edit, and Blueland. Their Chief Merchandising Officer, John Gehre, said “Sustainability and the support of small businesses are not only priorities for our company, but our customers, too.”

Businesses are attempting to keep up with the needs and interests of the consumer in many creative and well-researched ways during one of the most difficult times for businesses in history

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Business News

Tis the season for employment scams – here’s what to look out for

(BUSINESS NEWS) Desperate times call for desperate measures. Seasonal employment scams are back on the menu and here’s how you can avoid them.

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A serious man considers a clipboard in potential employment scams.

With the sheer amount of desperation surrounding the holidays, employment scams typically have a resurgence during this season. Thanks to the Better Business Bureau, there are some clear warning signs that can help you spot and avoid seasonal scams this year.

The typical crux of any employment scam revolves around a prospective employee’s willingness to pay for something upfront, be it training or some other kind of quasi-justifiable item (e.g., a uniform). However, other iterations of the scam actually involve an “employer” overpaying for something at the onset—albeit with a fake check—and then asking the recipient to wire “back” the extra money.

Either way, these scams can leave you jobless and with less money than you initially had, so here are some things for which you should watch out.

Firstly, employers shouldn’t ever charge you before hiring you. Some industries do require employees to make small purchases on their own dime (i.e., the aforementioned uniform), but payroll will usually deduct the cost of these materials from the employee’s first paycheck—not require payment upfront.

As a general rule, it’s probably best to avoid companies that charge you at all. Aramark, for example, is known for requiring employees to buy company clothes—and they’re no peach to work with. But desperate times may warrant an exception in this regard.

It’s also to your benefit to avoid postings that boast an “interview-free” experience. Put simply, no one is hiring sans an interview unless it’s nepotism or a scam. If you aren’t related to the poster, that doesn’t leave much up for interpretation. Similarly, advertising a large sum of money for disproportionately low amounts of work is a pretty big warning sign.

Finally, watch out for jobs that ask for a work sample before hiring. While this is common for internships, most entry-level positions and beyond aren’t going to require you to complete a project for free before determining whether or not you’re good for the job. At best, this is a tactic to get free work from you; at worst, your application information can be stolen.

It’s sad to think that people would stoop to the level of scamming others amidst the dumpster fire of a year it’s been, but if you avoid these red flags, you should be able to keep yourself safe during this holiday season.

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