Business Update - Weekly Digest (August 18, 2021)
COVID-19 relief programs have helped keep millions of Americans afloat during the pandemic but have also been a spectacular bonanza for an array of international scam artists, including Russian mobsters, Chinese hackers, and Nigerian scammers. An estimated $87 million to $400 billion in unemployment benefits may have been lost to fraud; at least half of that is thought to have been stolen by foreign criminals. Many took advantage of weak systems of unemployment verification in many states, which were further loosened to get financial support out quickly. Besides looting millions—or billions —of federal funds, identity thieves prevent innocent people from receiving the support they’re entitled to. While the vast majority of the stolen cash is gone for good, the FBI has so far recovered $100 million, while the Secret Service has clawed back $1.3 billion.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Shuttered Venue Operator Grant (SVOG)
Last week, the SBA announced that the SVOG program will be closing to new applications at 11:59 pm PT on Friday, August 20, 2021. This program provides grants for live venue operators, promoters, arts organizations, and other businesses that were closed due to the COVID-19 pandemic. Grants equal to 45% of gross earned revenue, up to a maximum of $10 million are still available. So far, this program has awarded $8.4 billion in grants, and has received applications requesting a total of $12.3 billion, nearly $4 billion less than the total of $16.25 billion allocated by Congress. Later this month, the SBA will be opening for supplemental awards of 50% the original award amount. Certain applicants, who were initially rejected, are also being invited to apply for a reconsideration of their awards.
Monthly Child Tax Credit Payments
As a reminder, if you want to opt out of future payments, you must use the IRS portal for the advance Child Tax Credit 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.
REOPENING THE OFFICE
Tech companies may be delaying a return to the office in the face of the Delta variant, but according to recent surveys of American employees, more than half of respondents are already back in the office. According to the most recent survey, only 8 percent of employers had adopted a permanent work from home policy, and 19 percent were still planning on bringing everyone back in September. However, policies vary by education level: as education level increases, fewer report working in person. But even among the most highly educated, most employees project returning to in-person work in August or September.
Workplaces that offer employees the option to work from home or in person may be setting themselves up for two tiers of workers: those who are remote and those who come to the office. Managing two different groups of workers on a go-forward basis is challenging, so those who come to the office and who are more visible may receive more attention, better opportunities, and more promotions. Awareness of this tendency may help to ensure all workers are treated in an equitable manner.
Workplaces are being forced to be creative in the bonuses and perks they offer to entice new employees. More restaurants are offering 401(k)s to their workers than before the pandemic, while even big companies such as Walmart, Target, and Facebook are offering tuition reimbursement or child-care benefits. Wages and signing bonuses are also common, especially in food services and retail.
ECONOMY
Inflation appears to be moderating, as the consumer price index rose less in July than in June, but it does not appear that we will return to the low inflation of the pre-pandemic days. Used car prices, which were a big driver of inflation recently, are beginning to moderate, but prices of other services such as lodging are increasing as people begin traveling again.
Meanwhile, job openings in June shot to a record high of 10.1 million as hiring also increased to near-record levels. However, the level of people voluntarily leaving their jobs (the quits rate) also increased in June to 3.9 million people, well above pre-pandemic levels. The quits rate is seen as a barometer of job market confidence. However, worries remain that a resurgence in infections could discourage unemployed people from returning to work.
