'We just can’t do this anymore': Small business owners say federal unemployment handouts are crippling them



Small businesses across the country have reportedly fallen on hard times in recent months, but not for lack of business. Rather, they suggest that pandemic-related government handouts are keeping much-needed workers out of the labor force.

Business owners from Ohio, Florida, Wisconsin, and North Carolina told the Dispatch recently that pandemic-enhanced unemployment benefits are stymieing their hiring efforts. It seems, they argued, that people would rather collect money from the government while they can instead of working in lower-wage industries such as the restaurant business.

"I've been in business for 33 years ... this is the absolute worst it's ever been," Bill Anderson, who owns Dale's Diner in Waterville, Ohio, told the news outlet. He added that it's primarily back-of-the-house employees such as dishwashers, managers, cooks that he needs.

"Usually, we'll put ads in in different locations to get people and we'll get anywhere from 6 to 12 applications in the first week or whatever and we'll get to take our pick — we'll get to pick the best of that bunch. Within the last couple of months, we don't even get a call — we don't get anything," he added.

Unable to keep up with generous unemployment benefits, Anderson closed his restaurant earlier this month. A line cook at his restaurant typically earns wages of $11 an hour, which amounts to roughly $21,000 a year for a full-time worker, he said.

But current unemployment benefits — which include $300 weekly federal payments often stacked onto similar payments made by state governments — pay much more. The Dispatch reported that an unemployed worker in Ohio could easily make $33,000 or more to stay home.

Last month, federal benefits unemployment benefits were extended to run through September as a part of the Biden administration's $2.25 trillion coronavirus relief bill, which means that things won't be changing anytime soon, even as the country begins to open up again.

"We just can't do this anymore," Anderson told the outlet.

His sentiment was shared by Kevin Rudzki, owner of Juana's Pagodas, a popular beachfront restaurant in Florida panhandle currently short-staffed during the busy spring and summer season. Rudzki said his restaurant has two kitchens but, at the moment, there are only enough workers to operate one of them.

"We're not even seeing applications, we're not even seeing people trying, except ones that are playing the game of filling out the paperwork, so that they can say they tried," he said.

"Normally, I have people lined up to work. I have never advertised for a job — ever. People just show up," he continued. "My competitors are running ads on radio stations, Facebook, etcetera — the same thing. There's no one."

Across the inlet, Paul Ruiz, owner of Where Y'at Seafood, is dealing with the same problem. He closed his restaurant on Tuesdays to give his staff a break, but that hasn't fixed the problem. Even now, he is short a line cook or two.

"You can't incentivize people not to work," argued Ruiz, a longtime Air Force veteran. "You need to have incentives to get people to work, not to stay home. You've got the hard workers who want to have a job, but the others need that motivation."

9 million small businesses — nearly one-third of all in US — fear they won’t survive 2021



Three in ten small businesses — or 9 million out of the estimated 30 million in the United States — fear they won't survive in the coming year without additional government assistance, according to a survey recently published by the Federal Reserve.

What are the details?

The Small Business Credit Survey, which was conducted last September and October and released last week, showcased the incredible burden the coronavirus pandemic has placed on America's small businesses, as 88% of the businesses surveyed reported that sales had not yet returned to pre-pandemic levels.

Nearly one-third of respondents reportedly told surveyors that without further financial help or a return to normal sales, their businesses would likely close for good.

Among minority-owned businesses, things were markedly worse. While in total, 57% of firms said their financial condition was "fair" or "poor," that figure shot up to 79% for Asian-owned firms, 77% for black-owned firms, and 66% for Hispanic-owned firms.

The percentage of small firms carrying debt also increased to 79% from 71% the year before, and those carrying a debt burden north of $100,000 increased from 31% to 44% in 2020.

Nearly all businesses surveyed said they expected to face at least one more pandemic-related challenge over the next year. However, the two challenges most firms expected were "weak demand for products/services" and "government-mandated restrictions or closures."

What else?

The bleak outlook among small business owners in the country expressed late last year was confirmed by another survey released this month, which tracks small business optimism.

The National Federation of Independent Business published its January survey on Tuesday. It found that small business confidence is at an eight-month low. Furthermore, the number of small business owners expecting better conditions through the middle of the year has hit its lowest level since 2013.

It's difficult to be optimistic about business, added Randy George, owner of the Red Hen Baking Company in Vermont, noting that his business hasn't been allowed to have indoor dining since last April.

"We do have a lot of people coming to the window and getting sandwiches to go, but, it's a window," George said.

Commenting on the survey, Bill Dunkelberg, head of the NFIB, told Marketplace that the news is not just bad for small businesses, but could end up dragging down the entire economy.

When businesses expect sales to decline, "that's going to feed back into their capital spending plans, and their inventory investment plans, and their hiring plans," he said.

(H/T: CBS News)

Facing financial crisis, NYC Mayor de Blasio to furlough himself and 495 members of his staff for a week



New York City Mayor Bill de Blasio (D) announced Wednesday that all members of his mayoral staff — including himself — will be subject to a mandatory one-week furlough due to the city's massive revenue shortfall amid coronavirus lockdowns.

The policy, which forces city employees to essentially take an unpaid vacation sometime between October and March, will affect 495 people, including de Blasio himself and first lady Chirlane McCray, the New York Times reported.

The forced furlough comes as de Blasio has so far failed to petition New York state for longterm borrowing or the federal government for a stimulus bailout.

It is a largely symbolic move as it is expected to yield $860,000 in savings — a mere drop in the bucket compared to the city's $9 billion, two-year revenue shortfall.

In recent weeks, the embattled mayor has threatened laying off 22,000 city workers unless the city receive a bailout of some kind. But so far, state and federal officials have balked at his warnings.

President Donald Trump, for one, has voiced opposition to granting federal bailouts to Democratic states and cities, which he argued suffered from significant fiscal mismanagement long before the virus.

On Wednesday, de Blasio took on a more somber tone in making the announcement.

"This is a step you never want to see for good, hardworking people, the folks who work here throughout this crisis," the mayor said. "So it is with pain that I say they and their families will lose a week's pay."

"We have to make tough choices to move this city forward and keep our budget balanced," he added.

During the news conference, de Blasio made sure to call on constituents yet again to push their federal and state representatives to act on behalf of the city.

"We'll keep fighting for those bigger changes," he said.

Speaking with the Times, Citizens Budget Commission President Andrew Rein argued that, now six months into the pandemic, the mayor should have already produced a plan to tackle the debt.

"It would be great if this helps dislodge that inertia," Rein said. "It's hard to say if it will."

In contrast, Bill Neidhardt, a spokesman for the mayor, hailed the move as "a significant gesture that reasserts City Hall recognizes the sacrifices that will have to be made across the board if we don't get a stimulus or borrowing."

Fox News reported that with a mayoral salary of $258,541 per year, de Blasio is set to lose just short of $5,000 during his weeklong furlough.

www.forbes.com

Dow falls 150 points after Senate Republicans unveil coronavirus relief bill

Stocks were under pressure amid debate over the latest coronavirus aid proposal.