Business Update - Weekly Digest (September 01, 2021)
While businesses have been mandating vaccines for employees for some time now, they are now beginning to take a harder line. Some, like Delta, are charging unvaccinated employees an extra $200 per month for health insurance, and some are firing unvaccinated employees. Companies that require employees to be vaccinated face several risks. First, the divisive nature of the COVID vaccine may lead to workplace bullying or retaliation of unvaccinated employees by vaccinated co-workers. Second, some employees may leave if they are required to take the vaccine. This may also make it harder to find new employees in a tight job market. Employers also need to consider the possibility of workers’ compensation claims in case of a severe adverse reaction to a required vaccine.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Rental assistance
Only 11% of the $46.5 billion in rental assistance has so far gone out. While some states are moving quickly, others are moving slowly. The Treasury Department is easing some of the eligibility requirements including allowing tenants to self-assess their income and their risk of becoming homeless. State and local governments have been slow to set up programs to distribute the cash. Some states and localities are concerned about fraud so they have their own requirements which may take weeks for verification.
Shuttered Venue Operators Grant (SVOG)
The SBA is relaunching the SVOG program with a supplemental grant program to disburse the remaining $7.2 billion. Supplemental grants are available only to qualifying live entertainment and other related businesses that already received funding. Eligible organizations will receive invitations to apply for additional funding, up to 50% of their original award amount. The SBA plans to start disbursing funds in two weeks. The timeline for spending the funds has been extended from 12 to 18 months from receipt. Eligible expenses include payroll and rent.
REOPENING THE OFFICE AND REMOTE WORK OPTIONS
Will the future of work be a shorter workweek? Studies from around the world seem to indicate that fewer hours spent working may increase productivity or make no difference in the accomplishment of the most important work tasks. Employees benefit from reduced stress, less exhaustion, and better sleep. Healthier employees also tend to need less time off, which reduces employer costs.
While many millennial women prefer the flexibility of a remote work schedule, many fear they may miss out on advancement opportunities if their male colleagues spend more time in the office. This isn’t a new fear for women, it has been prevalent since the early 1970s when there were far more men in the workplace, in far better paying positions as well. Creating performance metrics and workplace practices that treat all employees as equals can benefit women who have caretaking responsibilities. Evaluating performance without measuring the time spent in the office levels the playing field, as does making sure to include remote workers in meetings.
ECONOMY
Supply chains face a new disruption as the Delta variant is disrupting manufacturing in parts of Asia with low vaccination rates. Strict containment policies in Vietnam, where only 3% of the population has been fully vaccinated, mean that entire factories are being shut down or strictly limited in headcount. Since Vietnam produces more than 30% of American shoe imports and is a large supplier of US apparel, companies are scrambling to find other suppliers.
Meanwhile, COVID-related closures at other ports in China combined with congestion at California ports may make it difficult for retailers to stock their shelves for the holiday shopping season. Shortages of truck drivers are further compounding the problem. Companies such as Hasbro, maker of toys and games, is increasing prices to compensate for rising costs for shipping and raw materials. The combination means that retailers may not have as many items to fill shelves, and that delivery times for online presents may stretch into four to six weeks.
In the U.S., despite sharply rising cases of the Delta variant, new jobless claims remained steady at 353,000 for the week ended August 21, while GDP grew at 6.6% for the second quarter. These reports show that the economy is growing.
Sales of new homes increased in July but increasing prices and a limited supply of new homes are making it hard for some first-time buyers. While the supply of new homes rose, most of that increase has yet to be built. Builders are taking longer to complete homes due to expensive raw materials and a shortage of workers. Prices for new homes are up 20% compared to the pre-pandemic levels. Sales of new homes are up in lower-cost states such as Arizona, Utah, Texas and Florida, and down in areas where housing prices are high.
