Teens Are Answering the Call
It’s a job bonanza for teenagers, complete with accommodating bosses, schedule flexibility and higher pay.
Good morning!
Today’s highlights: How Tractor Supply became one of America’s hottest retailers. The tech companies that make remote work possible want their workers back in the office. And why the U.S. is losing immigrant entrepreneurs to other countries.
HUMAN RESOURCES
It’s not just you. Employees are gaining leverage over employers: “The change is broader than the pandemic-related signing bonuses at fast-food places. Up and down the wage scale, companies are becoming more willing to pay a little more, to train workers, to take chances on people without traditional qualifications, and to show greater flexibility in where and how people work. The erosion of employer power began during the low-unemployment years leading up to the pandemic and, given demographic trends, could persist for years. March had a record number of open positions, according to federal data that goes back to 2000, and workers were voluntarily leaving their jobs at a rate that matches a historical high.”
“Burning Glass Technologies, a firm that analyzes millions of job listings a day, found that the share of postings that say ‘no experience necessary’ is up two-thirds over 2019 levels, while the share of those promising a starting bonus has doubled.”
“The jobs report issued on Friday showed that average hourly earnings for nonmanagerial workers were 1.3 percent higher in May than two months earlier. Other than in a brief period of statistical distortions early in the pandemic, that is the strongest two-month gain since 1983.”
“‘A lot of companies, after the recessions in 2001 and 2008, dismantled their onboarding and training infrastructure and said that’s a cost we can’t afford. But it turns out, you actually do need to develop your own workers and can’t just depend on hiring.’” READ MORE
With adult workers hard to find, employers are turning to teenagers: “In May, the share of 16- to 19-year-olds who work rose to 33.2 percent, the highest rate since 2008, according to figures released by the Bureau of Labor Statistics on Friday. That teenage-employment rate is still far off the near-50 percent levels of the 1970s, when summer and part-time jobs were more common rites of passage into adulthood. But it marks a sharp rebound from the record-low 20 percent employment rate among teens in April 2020 ...”
“Itai Ben Eli, who runs Doris Metropolitan steakhouses in Houston and New Orleans, was planning to open a new bakery in Houston called Badolina in May this year. He had to delay it until June because he couldn’t find enough workers. Out of 45 scheduled interviews, two showed up, he said.”
“Over the past couple of weeks, Mr. Ben Eli says he has gotten an influx of new resumes, and more applicants are showing up to interview—all of them teenagers. So far, he has hired eight to help launch the bakery.”
“Alonzo Soliz, 41, runs two Tropical Smoothie Cafe locations in Cedar Park, Texas, north of Austin, and employs 50 people between them. Four of every five of the employees are teenagers.”
“To hire them, Mr. Soliz said he raised wages to about $12 an hour, from between $9 and $10. ‘They can jump next door for a dollar or two dollars more,’ he says. ‘Some of the larger restaurants in Texas can afford to start at $15 an hour.’” READ MORE
OPPORTUNITIES
Chicks, goats, and other hobby livestock made Tractor Supply one of the hottest retailers of 2020: “Tractor Supply, a 2,100-store retailer based near Nashville, is riding a backyard poultry craze. Last year it sold 11 million birds, including chickens, ducks, and turkeys—half of them to first-time customers who plan to raise them primarily for their eggs. ‘Everybody’s doing it,’ says Lawton, so Tractor Supply is doubling down. ‘We want to dominate poultry,’ the CEO says.”
“Tractor Supply has generated a remarkable run of success, including at least 26 straight years of sales growth, out of a quirky but growing market niche.”
“Professional farmers originally made up 90 percent of Tractor Supply’s clientele; today that figure is 10 percent.”
“Its stores are almost all located in mid-size or small towns—communities that are often too small to support a Home Depot, Petco, or Walmart.” READ MORE
REOPENING
The tech companies that make remote work possible want their workers back in the office: “Big tech companies were some of the earliest to shut down and lead the way for remote work at the start of the pandemic. Now many are evaluating the future, some choosing at least limited returns to expensive tech campuses, in which the largest companies have invested billions. As they announce their plans, it’s becoming clear: Many of the same companies behind the technology that has made remote work possible for the past 15 months are not willing to buy into a fully remote workplace for themselves.”
“Now, many tech companies are inviting (or requiring) their employees to come back to the office a few days a week, most commonly three.”
“Some including Google and Apple are adding on stretches of remote-work time, so people can take two or more weeks of working vacation from wherever they choose.”
“Apple spent $5 billion on its four-year-old spaceship campus in Cupertino, Calif. Google is working on a planned 595,000-square-foot building in Mountain View and an 80-acre campus in San Jose. Facebook expanded its campus recently with new Frank Gehry buildings in Menlo Park.” READ MORE
Dine-in cinema chain Alamo Drafthouse is battling back from bankruptcy: “The past few months have been tense times for Alamo. But after furloughing around 80 percent of the chain’s workers at once, and having survived the financial crucible of bankruptcy by selling itself to deep-pocketed backers, the company is poised to make good on its grandest ambitions to date. Such expansion, though, comes with a subtle but undeniable shift in corporate culture. Established in Austin in 1997 as a second-run movie house by [Tim] League and his wife, Karrie, before branching out across 10 states with innovations such as highly participatory ‘Rowdy’ screenings, booze-y milkshakes, special guest appearances by beloved filmmakers, scavenger hunts, and dinners matched to food-themed films, the theater chain (which took on Altamont Capital Partners as an investor in 2018) effectively clung to its reputation as cinema’s last mom-and-pop business. Until now.”
“[League] insists that as long as Alamo stays cash-flow positive, the company’s new corporate owners have no intention of interfering with its day-to-day operations ...’” READ MORE
With many Americans eschewing vaccinations, companies are turning to testing: “Public-health officials increasingly expect pockets of America will remain largely unvaccinated. That has businesses and health officials counting on testing as a means for controlling the virus. Test developers including Abbott Laboratories, the University of Illinois and Mount Sinai Hospital in New York have been testing their own employees and students to prove that—short of herd immunity—frequent testing can allow for the safe return to work and school.”
“Developers are competing to bring test costs down and to convince businesses that testing can keep children in school and employees in offices.”
“‘To think about buying these tests and providing them free of charge to your employees is definitely a way to kind of augment your strategy of bringing everybody back and opening up,’ [Abbott Chief Executive Officer Robert Ford] said at a CNBC conference in May.”
“‘If you got 85 percent of people vaccinated, testing would become less and less relevant,’ said Bill Jackson, Shield T3’s principal officer. ‘But in some areas you’ll be in the 40-percent range, so all of a sudden you’ll have to do testing.’” READ MORE
STARTUPS
America is losing immigrant entrepreneurs to other countries: “Long a hotbed of entrepreneurialism and a beacon of hope for immigrants, America is now known for a convoluted, highly politicized immigration policy that puts roadblocks in the way of foreign-born founders. The result for years has been that immigrants who want to start businesses here contort themselves into one of the visa categories, such as E-2 (for investors from countries that have treaties with the U.S.) or O-1 (for individuals of extraordinary ability), or try to cobble together something out of a half-dozen other categories—none of which is really designed for them. Former President Donald Trump’s overt hostility toward immigrants isn’t echoed by the present administration, but neither President Joe Biden nor the new Congress has taken the necessary steps to make the U.S. a more welcoming place for highly skilled newcomers.”
“The basic problem is that America has no startup visa specifically for founders, despite more than a decade of efforts to get one established.”
“Some 3.2 million [foreign-born entrepreneurs] operate businesses in the United States, representing nearly 22 percent of all business owners versus just 14 percent of the broader population.”
“The primary problem is untangling any potential startup visa from the toxic gridlock of America’s immigration policies.” READ MORE
CYBERSECURITY
Commerce Secretary Gina Raimondo warned that ransomware is here to stay: “Raimondo argued that the good news in all this was that businesses can make relatively simple changes to protect themselves against such attacks. ‘Some very simple steps like two-factor authentication, having proper backups and backup technology, can be enormously helpful against a wide variety of these attacks. So it is clear that the private sector needs to be more vigilant, by the way, including small- and medium-sized companies,’ she said.” READ MORE
WEB DEVELOPMENT
More than 3,300 websites will be auctioned Thursday to pay back investors defrauded in a Ponzi scheme: “Confiscated by federal authorities, The Income Store’s more than 3,300 websites are set to be auctioned Thursday in a bid to recover at least some of the more than $77 million that investors lost in an alleged Ponzi scheme. The court-ordered online auction includes 200 operating websites and thousands of dormant domain names, ranging from The Income Store’s former website to the never-developed DonaldTrumpCollectables.com. The websites will be sold in a single lot, with the opening bid starting at $2.5 million. ‘The goal of this auction is to raise as much money as possible to pay back to all the shareholders that got the short end of the stick here,’ said Monte Cahn, founder and president of RightOfTheDot, a Florida-based digital assets auction company.”
“More than 480 investors filed claims against The Income Store, a website development business that was shut down amid allegations of securities fraud in December 2019.”
“The Income Store was launched in 2017 by Kenneth Courtright, 51, who ... is facing civil and criminal charges tied to allegations that investors were lured with annual returns of up to 20 percent if they paid a six-figure ‘upfront fee’ used to build and operate websites.” READ MORE
PROFILE
It’s been 50 years since Southwest first shook up the airline industry: “It was 1971, and Southwest had recently put its first official flight into the air. [Lamar Muse, president,] asked a group of ‘hostesses,’ as the flight attendants were then called, to pose for a snapshot he planned to send to Harding Lawrence, the CEO of Dallas-based airline Braniff International. Lawrence was a bitter rival. He’d spent the prior three years waging a legal war to prevent Southwest from ever getting off the ground. But the U.S. Supreme Court dismissed one final appeal by Braniff in December 1970, clearing the runway for Southwest. ‘Get ready,’ Muse said to his smiling hostesses, each of whom was clad in her in-flight uniform of tangerine knit top, slouchy white belt, white side-laced go-go boots, and fire-orange hot pants. ‘Now, everyone flip Mr. Lawrence the finger.’”
“To fill out the first group of 38 flight attendants, Southwest ran its first-ever ad in May 1971. Written by Trapp’s team, it was a help-wanted missive titled ‘An Open Letter to Raquel Welch.’”
“It read, in part, ‘Ms. Welch: You typify the girls we’re looking for: Warm, personable, and great-looking in hot pants. … If you know of any other girls like you (at least 20 years old, 20/50 vision, without glasses, between 5’2” and 5’7”, 100-135 pounds) … would you please ask them to send us a brief statement of qualifications and a recent photograph?’”
“In the context of the times—when selling the sex appeal of all-female crews of flight attendants was an industry norm—the ad might not have come off quite as sexist as it reads today. Regardless, it generated 1,200 applications.” READ MORE
THE MORNING REPORT WEEKLY WRAP-UP
Every Friday, Gregg Stebben of the Small Business & Entrepreneurship Council and I offer our takes on the week’s most important stories for business owners and entrepreneurs. We post a new episode Fridays at noon. You can subscribe wherever you get podcasts or you can LISTEN HERE
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