The Missing Economy 

Today’s Highlights: PPP loan deadlines extended. A legal opinion on mandating employee vaccinations. And do we need structural changes to encourage entrepreneurship?

The recent spike in business registrations, says Right to Start CEO Victor Hwang, “seems more out of desperation than anything else.”


The structural issues that were discouraging entrepreneurship before the pandemic will still be there after the pandemic: “What we are discussing, [Right to Start CEO Victor] Hwang said, is less the failure in one sector or class of business than something larger: the slow withering of an entire ecosystem. It is the question, he said, of ‘the missing economy.’ The humble entrepreneurial startup, moving below the radar — the ones that will never be unicorns, and don’t want to — is, Hwang said, ‘the dynamism of the whole economy. If you think of the economy like the human body, it’s like the stem cells: the regenerative process. It’s what creates new and better things on a constant and renewing basis.’”

  • “This is why Hwang talks about the Right to Start: because right now, it’s a right most people don’t have.”

  • “Without your own capital, your mom’s garage, or a high credit limit, the choice to keep working for a boss, rather than setting out on your own, isn’t really a choice.” READ MORE


The Senate passed a bill 92-7 extending the deadlines for business owners to apply for PPP loans: “The bill had already passed the House, so it now goes to President Joe Biden’s desk to be signed into law. Congress started the loan program last year to help businesses survive the COVID-19 pandemic. The deadline for applications would be extended to May 31 under the bill, and the federal government would have until June 30 to process the applications.” READ MORE


Has the pandemic solved the restaurant industry’s business model problem? “Covid lockdowns helped to break the taboo against delivering great food to people’s homes. Chefs now know that fine victuals, like fine vintages, can travel. In turn, discerning eaters know that they can prepare an exquisite repast in their own kitchen, with not much more than the bog-standard oven, microwave and stovetop. The world’s finest eateries now routinely offer gourmet home kits, with prices sometimes running to four figures. And just like that, fine-dining restaurants may have reached a solution to their greatest quandary: How to wring more revenue from the genius of their chefs. After all, a three-Michelin-starred restaurant can only  accommodate so many comers without losing quality and exclusivity — and the right to charge top dollar for a meal.”

  • “Traditional brand extensions, from cookbooks to private catering, can top off the bread and butter with spoonfuls of jam. But there’s no getting away from the fragility of the business model.”

  • “As David Chang, the chef and entrepreneur behind the Momofuku chain, told me last fall, the restaurant business makes ‘more money for everyone else except restaurateurs — whether you’re a credit-card processor, or Google, or Yelp, or a reservation system, or a purveyor of beef, or a lawyer, or an accountant.’” READ MORE


A  lawyer addresses whether companies should mandate vaccinations: “With the Covid-19 vaccine rollout steadily gathering steam, and an overwhelming desire to get back to business, companies face a difficult choice: should they force employees to get vaccinated? And if not, how can they encourage workers to roll up their sleeves? Bloomberg Businessweek spoke to Kevin Troutman, a Houston-based lawyer who co-chairs the national healthcare practice of the law firm Fisher Phillips.

  • What are the risks to requiring your employees to get vaccinated? “Well, if you’re able to work through the people who say they need an accommodation because of disability or religion, then the risks are you’re going to have 20 to 40 percent of your workforce just very upset, very distracted and not as productive as they would be. Do you want to have to fire them? You probably could legally, but as a practical matter, do you want to fire that many employees?

  • Is that worse for your company than having 20 or 40 percent of your employees not vaccinated? “I think each company has to decide. It depends a little bit on what you do, and how much interaction do you have with the public. One place it would make a lot of sense to mandate vaccines would be health care, where you’ve got some responsibility for the health and safety not just of yourself and your employees but of people who are placed in your care. But even in the healthcare industry, I’m not seeing a huge rush to mandate vaccines. They’re making it available. But they’re not mandating it, whereas they have required flu shots.” READ MORE


Are authorities taking the threats against Asian-American entrepreneurs seriously? Amid heightened fears, business owners have begun hiring their own security, buying guns and cutting their hours of operation as well as advertising, among other costly safety measures that limit their profits — and profile — at a time when businesses are already struggling, according to Asian American chambers of commerce and other business organizations.”

  • “To San Antonio restaurateur Mike Nguyen, the threat was clear. Alongside the racist graffiti covering the windows of his ramen shop —’Kung flu,’ ‘Commie,’ ‘Ramen noodle flu’ — were these words, spray-painted in red: ‘Hope u die.’”

  • “Since the March 14 incident, the threats to Nguyen’s life and business have escalated. Last week, someone wrote ‘hope it burns down’ on the Instagram account for his restaurant, Noodle Tree.An anonymous manphoned the restaurant, reciting Nguyen’s home address with a warning: ‘We’re coming for you.’” READ MORE



Unemployment claims just fell to a pandemic low: “But they're still higher than at any point during the Great Recession. A year ago, the United States essentially closed for business, sending tens of millions of workers to the unemployment lines. Many shops and other businesses quickly reopened, adding their laid-off workers back onto payrolls. Weekly first-time jobless claims fell from a peak of 6.6 million in April 2020 to about 1 million a week in September. But the numbers have remained stubbornly high since then. Last week, 684,000 people filed for unemployment claims on a seasonally adjusted basis — the first time that number fell below 700,000 during the pandemic. Still, context is key: The highest number of weekly jobless claims during the previous recession was 655,000.”

  • “So the excitement that the economy is finally improving would have been considered a dire omen during the worst part of the 2008 financial crisis.”

  • “In a healthy economy, when the unemployment rate is below 4 percent, jobless claims are typically a third of where they currently stand, according to PNC Senior Economist Bill Adams. Between 2017 and 2019, weekly unemployment claims averaged around 230,000. READ MORE

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When Amazon tried to deny that its employees are forced to pee in bottles, it didn’t go well: “It may not have been a sound public-relations strategy for a company known for its grueling working conditions and frequent allegations of labor violations to deny one of the more memorable claims to emerge from their warehouses. But Amazon went for it anyway this week, when one of its official accounts tweeted a denial of the reporting that its drivers and fulfillment center workers have been forced to pee in bottles in order to save time to fulfill quotas set by their managers. ‘You don’t really believe the peeing in bottles thing, do you?’ tweeted the company’s Amazon News account. ‘If that were true, nobody would work for us.’”

  • The Intercept’s Ken Klippenstein “published documents proving that employees peeing in bottles was so commonplace that the $1 trillion company ‘frequently referenced it during meetings and in formal policy documents and emails.’” READ MORE


Pacaso offers a new way to buy a second home: “Unlike a timeshare, Pasaco said its buyers own property, not time. Buyers considering second-home ownership tell Pacaso where they want to buy, how much they want to spend and the amount of time they expect to be in the house. Pacaso and its real estate agent partners help find the home and set up an LLC designed for co-ownership. The buyer purchases their desired share — half the home, for example, guarantees access to the home for half the year — and Pacaso briefly purchases the remainder of the home before reselling the remaining portion to vetted buyers. Pacaso manages the property, and owners can use Pacaso’s mobile app for scheduling stays.”

  • “Pacaso, based in California but with an equally distributed team and office in Cincinnati, announced $75 million in new capital at a valuation of $1 billion on Wednesday.”

  • “There are more than 100 million second homes around the world. Most sit vacant 10-11 months a year.”

  • “The pandemic has made second home ownership even more desirable. But because of cost and hassle, it’s a dream often reserved for the top 1 percent.” READ MORE


Episode 54: Should Small Businesses Have Boards? This week, Stephanie Stuckey tells Paul Downs and Jay Goltz about seeking the guidance and perspective that a board of advisers could bring to Stuckey’s. But does a business have to be a certain size to warrant having a board? How do you recruit board members? How should they be compensated? And is a peer group, like Vistage, a better alternative? Plus: Uncovering a $140,000 cyber crime. Coping with the nightmare of shipping furniture. And Jay tells us why, if you listen to either just the artists or just the accountants in your business, you’re likely to go broke.