Welcome to the Small Business Weekly Rundown. Each week, we bring you stories and trends that impact small business owners and their workforce.
Small Business News Highlights:
- New jobless claims still clocking in at 900,000
- President Biden issues “Buy American” order
- Business owners grapple with prospect of raising the minimum wage
- Shipping rates soar due to ongoing container shortage
New jobless claims still clocking in at 900,000
“While the vaccine offers a light at the end of the tunnel, we’re still far away from a complete reopening of the economy that could drive rehiring and stem further layoffs.”
The Labor Department reported slightly better-than-expected data for new jobless claims last week, finding that 900,000 Americans filed for first-time unemployment benefits. This number reflects a slight dip of 26,000 for the previous week. Continuing claims also dropped by 127,000 to settle out at 5.05 million.
Economists warn that the economy is still losing ground, as retail sales dropped for the third straight month in a row, and many restaurants, bars, and stores are still under tight operating restrictions related to the recent surge in new coronavirus infections.
President Biden issues “Buy American” order
“This is going to be a nice little shot in the arm, to remember that we do have a lot of employees in this country that want to work, that want to make things. Let’s support them and buy the stuff that’s made here.”
Small business owners welcomed the news that President Joe Biden signed an Executive Order earlier this week directing government agencies to strengthen their commitment and requirements to buy from United States manufacturers and producers when possible.
Among other things, President Biden has committed to replacing government vehicles with American-made cars and awarding contracts to U.S. companies to replenish federal stockpiles that have been depleted by the COVID-19 pandemic.
Business owners grapple with prospect of raising the minimum wage
“Big business may be fine with a dramatic increase of the federal minimum wage and paid leave mandates as they’ve been thriving during the pandemic, but small businesses know these policies will make it even harder for them to compete against their larger competitors.”
SBOs are less pleased, however, with President Biden’s proposal to raise the federal minimum wage to $15 per hour.
The current federal minimum wage is $7.25 per hour and has not changed since 2009. While the push to raise the federal minimum wage is growing across the country, many small business owners note that they are currently barely surviving and that increasing wages significantly could be catastrophic.
Shipping rates soar due to ongoing container shortage
“I’ve been trying to look through 30 years of data and we have never seen freight rates skyrocket to this point that we have seen now.”
The cost of shipping a container of goods has increased by 80% since last November and has tripled overall over the past year due to significant changes in consumer spending habits related to the pandemic.
These changes have also created significant backlogs to traditional shipping routes, making it difficult for U.S. retailers to reliably stock goods from China, and raised the prices on many products from overseas.
The Latest from Workest
Ever wonder if your employees really know how much you value them or how much you’ve invested in them? It might be time to start handing out total compensation statements. Grace Ferguson explores the pros and cons of total compensation statements this week for Workest.
And if 401(k) contributions aren’t currently part of your company’s indirect compensation for employees, it’s worth looking into the tax benefits of starting an employee retirement program. See: Tax Credits and Deductions for Employers Offering a 401(k) Program.
Notice some changes to the Workest content you love? Here’s the backstory.
Finally, before we say goodbye for the week, here are 3 things you should know:
- Though employers and employees may disagree on specifics, all the data points to hybrid work models being the new workplace normal in the year to come.
- Big name companies like Walmart, Starbucks, and Amazon are lending their technological and logistical expertise to jumpstart the country’s vaccine program.
- President Biden issued an Executive Order to overturn Trump-era limits on diversity training.