NEW YORK (AP) — Although many small businesses struggle to find staffers to fill their open positions, many
That’s one of the findings of a study by researchers at Babson College in Wellesley, Massachusetts. The study, based on surveys of approximately 3,000 people in the U.S. during 2018, found that 87% of entrepreneurs with young companies expect to employ workers during the next five years, and 38% expect to have six or more workers. Seventeen percent said they expected to have 20 or more workers in five years.
Those expectations reflect the confidence and optimism of owners of businesses that are in the early stages of growth, the study said. “They trust that they can recruit, hire, and develop employees to help them successfully grow their business,” it said.
The jobs entrepreneurs are contemplating may be most abundant in companies that provide finance, real estate and business services, as well as retail and wholesale businesses. Those industries combined account for more than half the new companies the Babson researchers studied.
The study, which examined a range of aspects of entrepreneurship, also looked at business ownership as a means to earn a living — in other words, how many people start companies because they couldn’t find other work. Less than 9% of
Trump Signs PPP Loan Extension, Labor Sec. Says ‘No’ To More Unemployment Benefits
Small business owners now have until August 8 to apply for a loan through the Paycheck Protection Program (PPP). This is thanks to a bill signed by President Trump on Saturday.
The deadline to apply was June 30. However, more than $134 billion in funding still available according to the Small Business Administration. With this, President Trump extended the deadline so more businesses could benefit from the program.
The bill signed by President Trump also separated the authorized limits for loan commitments from other lending programs offered by the Small Business Administration.
According to the SBA, the PPP had awarded more than 4.7 million forgivable loans for more than $518 billion as of June 27.
Officials in the Trump administration said on Thursday that they will begin releasing information on the companies that have received more than $150,000 from the program. This is in an effort to address complaints about large, well-funded companies. These large companies receive PPP loans while many small or independently-owned businesses struggled to receive funding.
According to the US Treasury, approximately 5,300 borrowers have received almost 2.5 million loans worth $228 billion. That is roughly 44 percent of total PPP spending.
The SBA made an effort to address another complaint by small businesses. It has lowered the percentage of the loan balance that must be used to keep employees on the payroll. Previously, if more than 25% of the loan balance was used for purposes other than keeping employees on the payroll, the loan would have to be repaid. That threshold has been reduced to 60% of the loan balance used on employee salaries to make the loan forgivable.
The Program’s Significance
President Trump credits the Paycheck Protection Program with keeping an estimated 50 million Americans employed when they would otherwise have lost their jobs, preventing the unemployment rate from worsening as the country faced an economic shutdown.
The extension of the Paycheck Protection Program had unanimous bipartisan support. However, the July 31 deadline to extend the enhanced unemployment benefits will be hotly contested.
The latest high-ranking cabinet member to come out against extending the benefits is Labor Secretary Eugene Scalia.
During an interview on Fox News Sunday, Scalia said PPP loans serve as an “essential” part of the recovery. However, he doesn’t believe that $600-a-week enhanced unemployment benefits are needed beyond their July 31.
“It was a really important thing to do as we were shutting our economy down. Americans across the country were basically being told, and we needed to take measures, but they were basically being told, you can’t go to work right now and so we needed that substantial unemployment benefit. There are some states where you can get on an annual basis $75,000 a year right now on unemployment. As we reopen the economy, I don’t think we need a benefit like that.” he said.
Scalia added, “During the so-called Great Recession 10, 12 years ago when we had a downturn, The added federal unemployment benefit was $25 a week. What we did in the CARES Act was $600 a week.”
Trump Says SBA Has Saved 50 Million Jobs, Issued $4.6 Billion in Loans
U.S. President Donald Trump attended a roundtable with small business leaders yesterday. There, he reported that the Small Business Administration had processed over 4.6 million loans to small businesses. He also said that this saved an estimated 50 million American jobs.
“Small business is no longer small business, it’s big business,” he said. Then, the president expressed sympathy for the 41% of black-owned businesses and 22% of all small businesses that were forced to close this year due to the coronavirus pandemic.
In discussing the Payroll Protection Program, Trump said he approved over $670 billion for PPP loans. He also mentioned that said he is working with Democrats about doing “something further.”
A Meeting With Small Business Owners
In attendance for the meeting were several small business owners who received PPP loans. According to Trump, “their businesses are on the road to recovery and they’re doing really well. We have a lot of businesses that are doing really well.”
He said “very smart Wall Streeters” originally doubted him after saying the country would experience a “v-shaped” recovery. However, the President said that they all agree with him now. This comes as the country’s economic recovery continues to do even better than expected.
“We are talking about a v-shape, we’re almost an i-shape. “I” is straight up and down, I talked about a v-shape and a lot of people disagreed with me, not everybody, but a lot of very smart Wall Streeters were disagreeing, now they are pretty much coming on board, saying it looks like it could be a “v.” So a “v” is the thing we were shooting for and it looks like that’s what we got,” according to Trump.
The President added that small businesses across the nation are now safely reopening. Trump also mentioned that the economic and jobs numbers that were just reported are setting the country up for tremendous growth.
“Last month we added a record 2.5 million jobs, it’s the highest in the history of our country in one month. That’s the highest number of jobs, 2.5 million. The Dow rose about 26,000 points and we saw the largest surge in retail sales ever recorded. Next year is shaping up to be one of the greatest years in the history of our country from an economic standpoint, I truly believe that. I think we’re going to have a great 3rd quarter, we’re going to have a great 4th quarter, and next years going to be a phenomenal year.”
The President’s Confidence
The economic growth that blossomed under his presidency was paused due to the pandemic. However, he confidently added that it’s almost a given that if we did it once, we can do it again.
“After I was elected President our country added more than 7 million jobs, 12,000 factories and trillions of dollars of wealth. We created nearly 9,000 opportunity zones, and African-American, Asian-American and Hispanic-American unemployment and poverty reached all-time lows. We had the greatest employment numbers we ever had and we had to turn it off,” the president said. He also added that “We saved millions of people by doing it, we did the right thing, and now we’re turning it back on and the numbers are going up much much faster than anybody would have thought. It’s a great honor to see it. We built the strongest economy the world has ever seen before the virus and together we are doing it again.”
2.5 Million Jobs Added In May, Most Since 1939
2.5 million Americans went back to work in May. This reversed the trend of devastating job losses brought on by the coronavirus pandemic. With the surprising number of jobs gained last month, the unemployment rate fell from 14.7% down to 13.3%.
Almost half of the new jobs were in the leisure and hospitality industry, gaining 1.2 million new jobs after losing 7.5 million in April. 1.4 million jobs were also added at bars and restaurants as states began to relax social distancing measures and patrons slowly started venturing out to eat more.
The construction industry added 464,000 jobs, recovering about half of April’s losses. Education and health services gained 424,000 and retail jumped by 368,000 after losing 2.3 million jobs the previous month.
The report shocked many analysts, who were certain the report would reveal more bad news in the job market. According to Dow Jones, expectations were for 8.3 million jobs lost and a 19.5% unemployment rate.
Ethan Harris, head of global economics at Bank of America, says that this should be the turning point.
“May was this transition month. The layoffs were very high, but in the latter part of the month, rehiring started. This employment report is probably the peak of the disaster in the labor market,” said Harris.
He then added “You’re going to have millions of jobs added in coming months. Our assumption is that only about half of the jobs that were lost come back over the course of the next three to six months.”
A Positive Outlook?
There was some indication that May’s numbers wouldn’t be quite as bad as many expected. This happened when ADP’s private payrolls report, which surfaced on Wednesday, showed only 2.76 million jobs were lost last month.
Tony Bedikian, head of global markets at Citizens Bank, said “Barring a second surge of Covid-19, the overall U.S. economy may have turned a corner, as evidenced by the surprise job gains today, even though it still remains to be seen exactly what the new normal will look like.”
Scott Anderson, chief economist at Bank of the West, is paying close attention to see if jobs in manufacturing and construction accelerated or decelerated, if layoffs are starting at the state and local government levels, or if job losses have started to expand into new sectors.
Anderson does see a glimmer of hope as the stay-at-home orders are being slowly lifted across the country.
“It seems like folks are beginning to venture out. We’ll see if the gains continue. The openings are happening a little faster than expected. We do worry about a second wave. We’re not out of the woods. (The) third quarter looks a lot stronger than we thought a month ago.”
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