The Labor Situation Isn't All Bad
Yes, there’s a mismatch between the millions looking for work and the millions of openings, but over time it could mean a healthier job market.
Good morning!
Here are today’s highlights:
There’s tiny bit of unconfirmed EIDL news.
During the pandemic, some CEOs cut their pay 30 percent (women), while others gave themselves raises (men).
And it’s not just Miami. Climate change is coming for Chicago, too.
MARKETING
The future of ecommerce is starting to look a lot more like the past of QVC: “Live-streamed shopping events — part entertainment, part ad blitz — have become the latest frontier in online shopping. Retailers and brands as varied as Walmart, Amazon, Gucci and L’Oréal are experimenting with new streaming formats to sell a growing array of beauty products, clothing, electronics and home furnishings. The events take place on such platforms as Facebook, Instagram and TikTok, but they’re increasingly on retailers’ own websites.”
“Nordstrom recently created its own live-stream channel, where the lineup of virtual events includes makeup lessons, wine tastings and dance classes. Amazon hosted more than 1,200 live-streams during its annual Prime Day sale in June.”
“‘It’s a version of the Home Shopping Network, souped up for the modern age,’ said Ken Fenyo, president of advisory and research at Coresight. ‘Live-streams marry video, interactivity and content — along with a little bit of the thrill of shopping in person.’”
“‘This really is the year of experimentation,’ Fenyo said. ‘We see a lot of brands — certainly small ones, but also a growing number of large brands — really starting to invest in live-streams. They’re asking: What kind of items should I feature? Who should I get to host it? A celebrity influencer? Or maybe one of my employees? It’s beginning to catch on.’” READ MORE
FINANCE
Ami Kassar reports some unconfirmed rumors of EIDL progress: “First of all, it seems like the program has been moved inside the SBA to the same department that administered the PPP. This news is promising. Secondly, there is word that the SBA is going to pause the requirement that they have to wait for the IRS to do a 4506T tax verification before issuing a loan. The IRS is a New York City parking lot right now, which will hopefully make a difference. All this being said, borrowers should remember that an APPROVAL does not necessarily mean FUNDING is imminent. I know of many borrowers who have been approved weeks ago but have received no word about FUNDING yet. Just remember, it ain’t over until the money clears the bank.” READ MORE
HUMAN RESOURCES
There’s a mismatch between the more than 9 million job openings and the more than 9 million unemployed—but over time that might be a good thing: “The slow matching process could have benefits, leaving workers in jobs they prefer and the economy more efficient. Several factors are behind the development: Many workers moved during the pandemic and aren’t where jobs are available; many have changed their preferences, for instance pursuing remote work, having discovered the benefits of life with no commute; the economy itself shifted, leading to jobs in industries such as warehousing that aren’t in places where workers live or suit the skills they have; extended unemployment benefits and relief checks, meantime, are giving workers time to be choosy in their search for the next job.”
“A recent ZipRecruiter survey found 70 percent of job seekers who last worked in the leisure and hospitality industry say they are now looking for work in a different industry. In addition, 55 percent of job applicants want remote jobs.”
“Another form of mismatch is geographic. Job openings and available workers are in different places, in part because people moved during the pandemic, and in part because business boomed in unexpected locales.” READ MORE
Restaurant workers continue to quit in large numbers: “There are plenty of reasons for restaurant workers to walk away from their jobs, Givan noted. They are expected to work unpredictable hours at a moment's notice, for example. That can make it challenging to plan for childcare or a second job, she said. Restaurant ‘workers are realizing that there are higher quality jobs available’ to them, she said. Anthony Klotz, an associate professor of management at Texas A&M's business school, has a different name for that feedback loop. ‘We refer to that as turnover contagion,’ he said. Turnover contagion doesn't only lead to burnt out employees, he said. It also makes frustrated workers think more about their options.”
“In May, the rate of quits per share of employment in the accommodation and food services sector, which includes restaurants, was 5.7 percent, according to seasonally adjusted data released this week by the Bureau of Labor Statistics.”
“That figure held steady from the month prior, and is higher than the quit rate across all sectors, which fell from 2.8 percent in April to 2.5 percent in May.”
“"Whenever your co-worker leaves, it causes you to think ... 'What is she going to do next? And am I missing out on that opportunity?’” READ MORE
STARTUPS
During the pandemic, some CEOs cut their own pay (women), while others gave themselves raises (men): “While female startup CEOs cut their pay by 30 percent during the height of the pandemic (down to $101,000 from $138,000 in 2019), male CEOs actually gave themselves a modest raise (up to $146,000 from $143,000 in 2019).”
“We knew that there was this trend of a lot of CEOs trying to cut their own pay to help the company, but we didn't realize that it had fallen disproportionately on women,’ Kruze's VP of financial planning and analysis Healy Jones told VC newsletter Pipeline Protocol.”
“As things have opened up again the pay gap between male and female startup CEOs has started to close—the average female CEO's salary is back up by $30,000—but women CEOs are still getting paid less than their male peers compared with before the pandemic.”
“In 2019 female startup CEOs earned 0.96 cents for every dollar a male CEO earned. Now they make 0.89 cents.” READ MORE
BUSINESS MODELS
Automakers are moving aggressively toward subscription models: “In the past, the ordeal of deciding which features you could afford and which you could live without may have been painful and time-consuming, mainly because you would be stuck with whatever suite of options you chose until the time came to buy another car. Those days are quickly fading as cars morph from vehicles to get around town to artificial intelligence-enabled, smartphone-like connected devices packed with software for work and play. In the near future, cars won’t only be able to constantly update and adapt to situations months and years after the time of purchase, they will be able to use AI to anticipate the needs of drivers and passengers and tailor their offerings accordingly. This also has the potential to create a new business model for automakers, with car owners paying on-demand fees or monthly subscriptions to get access to new features.”
“These could include additional horsepower from the electric motor that you might only need on a road trip through mountainous terrain. Or a subscription for heating the steering wheel and seats during the winter.”
“Tesla offers subscriptions for what it calls ‘Premium Connectivity,’ which covers things like video streaming and live traffic visualization. Chief Executive Elon Musk has raised the possibility that Tesla could offer its advanced driver-assistance package as a subscription but has not launched that yet.”
“With access to a person’s digital calendar, the car’s AI assistant could begin to anticipate routines—Friday afternoon soccer practice or the Monday morning staff meeting—even deciding on its own to wake you early enough to avoid heavy traffic.” READ MORE
REOPENING
This just might solve the problem of getting more people vaccinated: “Some men are coming into doctors’ offices saying erectile dysfunction has occurred following a Covid-19 infection, said Dr. Ryan Berglund, a urologist at the Cleveland Clinic. At the moment, there’s primarily anecdotal evidence, and ‘we don’t know the scale of the problem at this point.’ Berglund stressed that it had not been proved that COVID-19 causes erectile dysfunction.” READ MORE
CLIMATE CHANGE
Water is an existential problem for Chicago, too: “Climate change has started pushing Lake Michigan’s water levels toward uncharted territory as patterns of rain, snowfall and evaporation are transformed by the warming world. The lake’s high-water cycles are threatening to get higher; the lows lower. Already, the swings between the two show signs of happening faster than any time in recorded history. A series of ferocious storms in recent years has made it clear that the threat this poses to a metro area of 9.5 million people is not abstract. ‘There are buildings just teetering on the edge of the lake. A few years ago, they had a beach. Now the water is lapping at their foundations,’ Josh Ellis, a former vice president of Chicago’s 87-year-old, nonprofit Metropolitan Planning Council, said this year. ‘This is an existential problem for those neighborhoods and, ultimately, for the city.’”
“In just seven years, Lake Michigan had swung more than six feet. It was an ominous sign that the inland sea, yoked for centuries to its historic shoreline, is starting to buck.”
“In fact, the speed and uncertainty of the changes underscore how Chicago, in some crucial ways, is perhaps more immediately exposed to the dangers of global warming than cities on the ocean.”
“If the lake were to drop just a couple of feet below its all-time low, or surge a couple of feet above its record high, the consequences for the city could be dire.” 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 by noon. You can subscribe wherever you get podcasts or you can LISTEN HERE
THE 21 HATS PODCAST
Episode 67: Why Did Your Business Succeed? This week, we talk about how much of success is making the right decisions. How much is being in the right place at the right time? And how much is just luck? “I think that's the thing nobody wants to talk about,” Paul Downs tells us, “because it implies that there's a lot to success that is out of the control of the entrepreneur, and we're much more attracted as human beings to stories of people who have agency and are like, ‘Oh, there's a problem. I did this, and I won.’ That's what we like to hear.” So yeah, there’s always luck involved. But there are always forks in the road, and someone has to decide which way to go. This week we hear how a few of those decisions played out.
You can subscribe to The 21 Hats Podcast wherever you get podcasts.
