7.5 million Americans lost their extended unemployment benefits in the fall of 2021. The question remains, how will this impact the labor shortage plaguing the majority of small businesses? Fortunately, we don't have to wait to find out. Twenty-two states have ended their employment benefits early, and the numbers are in.
Let's start with the bad news, in these twenty-two states, consumer spending dropped. This is bad for local businesses and couldn't come at a worse time. A new research paper from Harvard University found that these twenty-two states experienced an average of 20% decrease in week-over-week consumer spending, compared to states that kept benefits in place.
Eliminated Benefits will mean millions of Americans will finally be available to work. Right?
You wouldn't be alone in this thought process. However, the data from this study shows that only 4.4% more workers in those early-out states gained employment compared to their colleagues in states that kept benefits in place. For every eight workers that lost benefits in the early out states, only one went on to gain employment.
What does this mean for my business?
Well, for starters, it means weathering the storm a little longer. Even though 7.5 million Americans lose a significant portion of income, we shouldn't expect a flood of applicants after September 6th. Potential employees re-entering the workforce are demanding more than ever before, and small businesses often find themselves unable to keep up.
It also means being prepared to weather a potential decrease in income due to consumer spending declines (approximately 20%).
What can be done?
Fortunately, Congress has released and/or renewed many programs to offset the catastrophic effects Covid-19 is having on small businesses.
All employers qualify for up to $26,000 per employee of emergency relief even if their business took advantage of the PPP program or other emergency relief programs.
In partnership with Gerald McAdoo, Growth Management Group has developed software to help businesses find out precisely what emergency relief they qualify for and quickly get the money into their hands, helping businesses all across America.
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ABOUT SNAPSHOT BUSINESS SERVICES
Snapshot Business Services helps Main Street business owners not leave money on the table by guiding them through tax savings and credit strategies. Find out if you’re eligible for tax savings by visiting our website and trying out one or all three of our tax savings tools. In as little as 15 minutes, you could find savings of up to six figures. (most of our business owners do).snapshotbusinessservices.com
ABOUT GERALD MCADOO:
Gerald is Director of Snapshot Business Services and has spent 15 years in Wealth Management, Commercial Realty, and Energy Consulting. His purpose is to help your business grow by increasing your cash flow. With a network of 500 team members in 40 states, he can provide the most up-to-date, current information on available programs across a wide array of industries that helps you find the money, and then we help you get the money.
