Everyone’s Calling in Sick
Covid? RSV? Mental health issues? Jet-lagged after a vacation? There’s been a fundamental shift in the way American workers use sick days.
Here are today’s highlights:
Will A.I. decide whether you get your next bank loan?
The price of health insurance is surging, but employers are reluctant to pass the cost to employees.
Even labor unions are struggling to negotiate labor deals.
Delivery companies are targeting customers who behave almost as if they’re still on lockdown.
Ami Kassar debated whether to make a statement about Israel and Gaza: “Today, I write from my seat as the founder and CEO of MultiFunding. I have mulled this over and over: This is my issue, but does that make it the company’s issue? The answer, I think, is yes. Ultimately, what binds our team together at MultiFunding is we care about people. We care about each other, and we care about the customers and community we serve. We live our values every day: We try to treat everyone as we would want to be treated.”
“So when Hamas, a terrorist organization, crossed into Israel and killed innocent children, women, and seniors and took innocent hostages back into Gaza, their actions violated everything we believe in. When hate crimes follow in the United States against Arabs and Jews, we feel the pain.”
“And when hundreds of Palestinians die in a hospital in Gaza, we cry for them as well. And we wonder what we should do.” READ MORE
Banks are already using artificial intelligence to determine whether small businesses get loans: “While A.I. could be a major boon for lenders, which now have the ability to gather and process much more consumer information than the standard debt-to-income ratio, the federal government is considering what that means for borrowers, particularly those who find themselves turned down for a loan or credit line. Last month, the Consumer Financial Protection Bureau issued new guidance about legal requirements for lenders using artificial intelligence and other advanced algorithms. The agency said that if a borrower is denied credit, the lender must provide ‘specific and accurate reasons’ why that decision was made.”
“‘Artificial intelligence is expanding the data used for lending decisions, and also growing the list of potential reasons for why credit is denied,’ said CFPB director Rohit Chopra in a statement. ‘Creditors must be able to specifically explain their reasons for denial.’”
“Richard Gusmano, the founder and CEO of Business Credit Consultants, which helps small businesses obtain credit, says that the CFPB is trying to safeguard against machine learning becoming the sole decision maker determining which small businesses are approved for a loan and which ones are denied.”
“The best defense against having your loan application rejected by A.I. is to be even more scrupulous than usual with your documentation. ‘A lot of the information that banks are given or a lot of information that accountants put on the top form of the tax return is inaccurate,’ says Gusmano, who adds that this problem will be most acute for businesses working with a lender for the first time.” READ MORE
The cost of health insurance has taken its biggest leap in more than a decade: “The cost of employer health insurance rose this year at the fastest clip since 2011, according to an annual survey from KFF, a healthcare research nonprofit. The 7 percent jump in the cost of a family plan brought the average tab to nearly $24,000—more than the price for some small cars. Workers’ average payment of $6,575 for those plans was nearly $500 more than last year.”
“Inflation in the economy spiked in 2022. It hit health coverage this year because hospitals tend to renegotiate fees with insurers only every few years, so the increases they sought to cover their own costs are now in turn affecting premiums.”
“One piece of good news for workers is that employers aren’t pushing up deductibles, which are out-of-pocket sums that workers pay for care before coverage kicks in.”
“Employers are still reluctant to pile new costs on workers in a tight labor market, Claxton said. In addition, some companies may worry that the cost burden on employees is causing them to avoid needed care.” READ MORE
Americans are taking more sick days: “U.S. workers have long viewed an unwillingness to take sick days as a badge of honor. That’s a laurel workers care much less about these days. The number of sick days Americans take annually has soared since the pandemic, employee payroll data show. Covid-19 and a rise in illnesses such as RSV, which can require days away from work, are one reason. Managers and human-resources executives also attribute the jump to a bigger shift in the way many Americans relate to their jobs.”
“For one, more workers are using up sick time often for reasons such as mental health. And unlike older workers, who might have been loath to call in sick for fear of seeming weak or unreliable, younger workers feel more entitled to take full advantage of the benefits they’ve been given, executives and recruiters say. That confidence has only grown as record low unemployment persists.”
“So far this year, 30 percent of white-collar workers with access to paid leave have taken sick time, up from 21 percent in 2019, according to data from payroll and benefits software company Gusto. Employees between ages 25 and 34 are taking sick days most often.”
“A still-tight labor market means companies can’t be grouchy when employees call in sick, says Kerri Dye, who until recently managed several Starbucks locations in Sacramento. Dye says that she makes a point of encouraging workers to use sick days for less conventional reasons, such as recuperating after a travel-intensive vacation.”
“‘You get such loyalty and buy-in from your team when you show them you care,’ she says.” READ MORE
With employees of the AFL-CIO in contentious negotiations with the big labor group, even labor unions are having labor problems: “The AFL-CIO is basically synonymous with the American labor movement. It's the 67-year-old umbrella organization for nearly 60 unions — including the American Federation of Teachers, American Postal Workers Union, and Writers Guild of America — representing about 12.5 million workers. Many of them, including the UAW's auto workers and Hollywood actors, are on strike right now. Labor unions are resurgent at the moment — and unions are flexing muscles not seen for a while. So, some observers were surprised the AFL-CIO hadn't worked this out yet.”
“The union says staffers haven't gotten a raise in nine years; and the best offer they've seen from the AFL-CIO is for 2.4 percent annual increases, well below inflation. Plus, they're fending off efforts to cut pension benefits.” READ MORE
In Massachusetts, the median Uber or Lyft driver makes $12.8 an hour: “The study, based on third-party data from one million ride-hail trips in the state from June 2022 to July 2023, found that nearly three of five drivers made less than $15 an hour — the state minimum wage for hourly employees — and that half of ride-hail earnings were taken up by expenses such as gas and vehicle maintenance. In Greater Boston, 53 percent of time that ride-hail drivers spent working was spent without a passenger in the car, and therefore unpaid, much of it moving between pickups or repositioning themselves to meet customer demand.”
“The report, which comes amid efforts by Service Employees International Union Local 32BJ to organize ride-hail drivers in Massachusetts, purports that poor working conditions, including ‘stark discrepancies between promised earnings and actual compensation, extensive work hours, and unaddressed work-related expenses,’ are ‘pervasive within the industry’ and have led to high turnover amongst drivers.”
“For years, SEIU has gone head to head with tech giants, who argue drivers are classified as independent contractors or freelancers, and benefit from the flexibility that status can bring. Some local drivers, by contrast, believe they should be employees of Uber or Lyft and thus eligible for more benefits and legal protections.” READ MORE
Gene Marks says more businesses are automating the bill-paying process: “In short, it’s removing humans from the process of receiving and paying vendor invoices, and there are a number of technology platforms using artificial intelligence like Ramp, Bill, Expensify, and AvidXchange that do this. Pricing and services are very different depending on the platform you choose. For example, Ramp — which recently raised $300 million and has been valued at close to $6 billion — offers many of its services for free, relying on credit card transactions for its revenues. Bill charges as much as $55 per user per month depending on the level of integration and customization required.”
“Using a technology called optical character recognition, the details from the invoice are extracted from the message or image, analyzed with AI and imported. Payment details are set up in advance so, depending on the vendor terms, a credit card, electronic check, or ACH payment can be scheduled.”
“As the applications get smarter with more transactions, each invoice is coded for accounting and then synchronized into a company’s accounting system like QuickBooks, Sage, or Xero.”
“Fraud is reduced because transactions are only coming from a known source and are less likely to be tampered with by a human. Less work is needed by the accounting staff, which means their hours can be directed toward more productive activities, or even eliminated.” READ MORE
As the pandemic receded, delivery companies confronted a slow down, so DoorDash targeted a group that behaves as if the lockdown never ended: “To woo this community of highly competitive shut ins, DoorDash has shown up to gaming conferences, streamed battles between popular gamers, and deployed ads with catch phrases such as ‘Stay in Your Game,’ a straightforward way to remind players that every minute saved in acquiring food is another minute spent blasting the enemy to pixels. The result: Video gamers are now DoorDash’s fastest-growing pool of customers and among its most frequent users, the company says.”
“More than 12 million people who said they spend at least an hour a day gaming ordered from the app in the three months through June. That figure has doubled from the first three months of 2021, when DoorDash initially began targeting gamers.”
“DoorDash started advertising in places where gamers congregate, such as the video-streaming platform Twitch and the chat app Discord. One TikTok ad shows a gamer ordering energy drinks and controller batteries so he ‘never runs out of juice.’”
“Gamers—who order 70 percent more often than regular DoorDash users—helped lift the company’s order frequency to a record high this year.” READ MORE
THE 21 HATS PODCAST
We Haven’t Signed a New Client in Eight Months: This week, we meet Jaci Russo, the co-founder and CEO of BrandRusso and the latest addition to the 21 Hats Podcast team. Jaci tells Jay Goltz and Laura Zander how she went from working for Barry Diller to starting her own marketing agency. Jaci also explains why she recently decided to introduce a four-day workweek and why she thinks her agency has now gone eight months and counting without signing up a new client—the longest such stretch in more than 20 years in business. “I find it interesting,” responds Jay. “You just said this is the first time you've ever had such a long period without new business. And, ‘Oh, we went to a four-day workweek.’ Hmm, how interesting.”
Plus: Laura talks about what happened when venture-backed competitors came for the knitting industry and how stressful it is to buy and operate another business in another state.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren