The holidays are usually a great time to pick up some extra cash with seasonal work. But, this year it seems like workers aren’t that interested in the jobs and small business owners are worried.
Findings from a new report from an Incfile survey revealed about 34% of respondents said that it is harder to find help this year compared to years prior.
The report covered data across a myriad of business-related topics and delved into scenarios founders said were most important to them. The biggest concern founders was boosting sales this holiday season, with 39% sharing it’s their main cause of stress. Namely, securing goods within budget (22%) and hiring good help (24%).
These findings are surprising as inflation has driven the cost of nearly everything way up, with the current US rate sitting at around 9%. According to the Labor Department there are about 10.7 million open jobs, which is a slight uptick from last year’s 10.4 million. Of those, the seasonal positions are slow to be filled. “I’ve never seen a market like this,” said Matt Lavery, UPS’s global director of sourcing and recruiting in a 2021 interview with The Christian Science Monitor. Nearly a year later, the employment situation is nearly the same despite ballooning inflation. “Normally when you’re talking about people coming off unemployment benefits, you see surges in candidates. We’re not seeing those.” Economists blame the lag on the residual effects of the Great Resignation that’s spanned the last two years whereby workers were quitting their jobs at staggering rates for roles they found more fitting. The workforce movement has since forced employers to sweeten their benefits packages for employees to keep them within the company, including work-life balance measures.
According to Incfile, 80% of employers are also giving back to their employees, offering time off to spend with their families this holiday season.
“The holiday season is one of the busiest and most exciting times of year for small business owners,” said Dustin Ray, Chief Growth Officer & Co-CEO, Incfile. “It’s encouraging to hear, as the holiday season gets underway, that 87% of small business owners feel supported by their community. It’s been a difficult couple of years, and to have a strong sense of community is a key pillar for small business owners to realize success.”
It’s a lose-lose situation. While some streamers are losing money by paying to get content on their platforms, others are losing money by distributing it on their own platforms. The result? Price hikes.
Streaming services just keep creeping up in price. Netflix, Hulu, Disney Plus, ESPN Plus, and Apple TV Plus all announced price hikes this year, which means we’re forced to have to pay more money to keep up with the shows that are actually relevant, like Andor or Stranger Things.
The truth is, this trend isn’t going to stop anytime soon. Streaming services need to raise their prices or embrace advertising if they want to meet investors’ expectations. They’re just going to have to risk losing subscribers who don’t want to pay these jacked-up prices along the way.
Back in 2011, a standard Netflix subscription cost just $7.99 per month — $1 more than the ad-supported plan Netflix launched last week. The company introduced its $11.99 per month 4K premium subscription in 2013, and from there, things just got more expensive, with Netflix making $1 or $2 price increases across all its plans over the course of the next several years.
In 2017, Netflix’s most expensive plan jumped from $11.99 to $13.99, and its standard plan went from $9.99 to $10.99. At the time, the company attributed the hike to the addition of new exclusive content and features. But this obviously wasn’t the end of Netflix’s price increases: it went up once again in 2019, bringing the premium price to $15.99, the standard plan to $13.99, and raising the basic option for the first time to $8.99. Netflix raised the standard and premium plans by another $2 in 2020 and then cranked up the prices again earlier this year.
Netflix doesn’t cash in on licensing content out to other platforms
As streaming services dump more money into building a library of content, they aren’t benefiting so much from adding new subscribers as the streaming landscape continues to mature, and most people have locked themselves into the services of their choice. According to data analytics group Kantar, as of December 2021, 85 percent of households in the US were subscribed to a streaming service. This number only increased by 2 percent year over year, leaving little room for growth.
“Streaming TV is in its adolescence now,” Eric Schmitt, a research director and analyst at Gartner, tells The Verge. “The early days of the land grab are ending. We’re coming into a phase where the service providers need to demonstrate that they’ve got viable businesses to their investors.”
On top of that, services like Netflix don’t cash in on licensing content out to other platforms. Netflix’s original content is exclusive to its service and it pays to get the rights to other studios’ content on its platform. That’s why the service took action after it reported losing subscribers for the first time in over a decade in April and then lost millions more in the months that followed. The company has since rolled out an ad-supported tier and is planning to crack down on password sharing next year in a bid to diversify its source of revenue and squeeze existing subscribers. It also put a $17 billion cap on content spending set to last through 2023 and perhaps the new few years. Apple TV Plus is stuck in a similar situation as Netflix, as it only generates money from attracting subscribers — not by licensing out the content it spends money to create. Apple raised prices across all of its services last month, including Apple TV Plus, citing “an increase in licensing costs.” While the company hasn’t yet turned to advertising to help mitigate some of these expenses, it’s almost guaranteed that it will.
“I think ad-supported is an inevitable state for almost every service,” Schmitt says, noting that there’s a portion of viewers who will tolerate ads in order to get a lower subscription price. There have been a couple of rumors floating around about the possibility of Apple TV Plus incorporating ads, with a recent report from DigiDay indicating that Apple has been in talks with media agencies to bring commercials to the service. It’s also reportedly building an advertising network around its deal to stream Major League Soccer games, according to Bloomberg.
But even if a streaming service does generate some extra cash by licensing content to other platforms, this presents another problem that results in price hikes as well. Let’s take Disney, for example, which uses much of its own content to fill out Disney Plus and Hulu’s libraries.
Earlier this year, Disney took a $1 billion hit to end an unnamed licensing agreement early and get the content on its own platform. While Disney didn’t specify the content in question, some suspect it had to do with the company reacquiring the Marvel shows Netflix produced in the mid-2010s, like Jessica Jones and Daredevil, which now reside on Disney Plus. Ending lucrative agreements like this (and not setting them up in the first place) leaves Disney no choice but to hike prices to make up for this loss.
“I think ad-supported is an inevitable state for almost every service,” Schmitt says, noting that there’s a portion of viewers who will tolerate ads in order to get a lower subscription price. There have been a couple of rumors floating around about the possibility of Apple TV Plus incorporating ads, with a recent report from DigiDay indicating that Apple has been in talks with media agencies to bring commercials to the service. It’s also reportedly building an advertising network around its deal to stream Major League Soccer games, according to Bloomberg.
But even if a streaming service does generate some extra cash by licensing content to other platforms, this presents another problem that results in price hikes as well. Let’s take Disney, for example, which uses much of its own content to fill out Disney Plus and Hulu’s libraries.
Earlier this year, Disney took a $1 billion hit to end an unnamed licensing agreement early and get the content on its own platform. While Disney didn’t specify the content in question, some suspect it had to do with the company reacquiring the Marvel shows Netflix produced in the mid-2010s, like Jessica Jones and Daredevil, which now reside on Disney Plus. Ending lucrative agreements like this (and not setting them up in the first place) leaves Disney no choice but to hike prices to make up for this loss.
“The price of streaming services is reflective of the economic realities and costs that it takes to produce and distribute the content,” Schmitt says. “And I think the market is catching up with the fundamental physics of those costs.”
Paramount still makes money by licensing a boatload of its content to other services
Although Disney Plus added 9 million subscribers in the US over the past several months, it still lost $1.5 billion in direct-to-consumer revenue due to an “increase in programming and production costs” as well as a lack of straight-to-streaming cinematic releases. To further shore up its losses, Disney has also chosen to adopt the ad-supported model and will roll out the new $7.99 per month tier on December 8th.
While many are increasing prices because they can’t afford not to, it seems like some other services are just hopping on the price increase bandwagon because everyone else is doing it. Paramount’s chief financial officer Naveen Chopra basically admitted this in an earnings call earlier this month. “I think it’s fair to say that pricing is moving higher across the industry — you see that with a number of competing services,” Chopra said. “We think that means we have room to increase price.” Paramount Plus hasn’t increased its price in the US just yet, and that’s probably at least in part because it still makes money by licensing a boatload of its content to other services.
The platform exclusively houses content like most of the Star Trek franchise and an iCarly reboot, but a lot of Paramount’s content is on other platforms, including South Park, which is onHBO Max, and the massive hit Yellowstone, which lives on NBC Peacock. This might generate income in the short term, but it doesn’t help the streamer build out an attractive library like Netflix. It does seem like Paramount’s working on fixing the predicament it has put itself in, though, as it drove up subscribersby exclusively adding Halo and Yellowstone spinoff 1883. The service isalso releasing another Yellowstone prequel, 1923, in December.
As prices continue to go up, I expect a lot of people will be like me — ready to say enough is enough
And while I would mention HBO Max, its parent company’s megamerger with Discovery has created a dumpster fire worth an article of its own. As The Verge’s managing editor Alex Cranz points out, Warner Bros. Discovery CEO David Zaslav is focused on “making as much money as cheaply as possible,” which means axingtons of content and cashing in on movies shown in theaters before later moving them to the service, eliminating the straight-to-streaming model. While Zaslav hasn’t mentioned a subscription price increase yet, he said during RBC’s Global TIMT Conference that “it’s going to be hard” to meet the company’s $12 billion earnings forecast if the current ad market doesn’t improve.
The way streaming services have things set up is a lose-lose situation. I committed to paying a base price for services like Netflix, only to get smacked with repeated price increases and questionable amounts of value added with low-effort originals and cheesy competition television shows. Luring folks in with a low intro price and then cranking things up was always the plan for many of these companies (Disney was especially open about it), but as prices continue to go up, I expect a lot of people will be like me — ready to say enough is enough. When the time comes, I’ll kick aside my Disney Plus or Funimation subscription (because even that’s gone up).
That’s how we got where we are now: paying $19.99 for a premium plan, $15.49 for the standard plan, or $9.99 for a basic subscription. But Netflix isn’t alone. Hulu raised the price of its ad-supported subscription for the first time last year, and younger services, like Disney Plus and Apple TV Plus (both of which launched in 2019), all raised their prices this year.
Three-time Grammy-winning multifaceted rapperLudacris has partnered with Google to bring forth his new single and interactive video “Buying All Black” featuring Flo Milli and 70 Black-owned businesses. The musical effort was released to promote the third annual “Black-owned Friday” nationwide campaign.
Luda raps: “Ok I’m buying all black, dropping all stacks/ B-U-Y B-L-A-C-K in all caps/ Out the traps to get the riches, the senseless still pay the tax/ Build a business, can I get a witness?/ This here, was built on our backs.”
The “Black-owned Friday” campaign was launched in 2020 as a spin-off of the traditional day-after-Thanksgiving shopping event. According to a press release obtained by VIBE, Black-owned Friday aims to “celebrate Black-owned businesses that were facing serious systemic challenges as the pandemic was accelerating.”
“As a business owner, I am so passionate about supporting Black entrepreneurs and really wanted to celebrate the impact they make on their communities,” the Karma’s Worldcreator stated. “We’re showing people how to search on Google for Black-owned businesses, and reinforcing that we all have a choice when we search for businesses to support and shop our values.” Google has innovatively created Black-owned business badges that help business owners self-identify as Black-owned on Google’s search engine. The anthem, “Buying All Black,” now hopes to gain the “Black-owned Friday” campaign’s new traction. Businesses can learn more about these resources on the Black-owned Friday website here.
Flo comes in later with: “Okay my hat watching my bag, I guess we buying all black/ This 4c, this ain’t tracks, so if you touch it you get smacked/ Buying all Black, I’m never thinking twice, you can do it too if you just pay the price.”
A voter-approved measure strips gig workers of basic protections enjoyed by employees in other businesses.
What happened in California? Despite the state’s liberal reputation, voters there last week approved Proposition 22, a ballot initiative exempting many gig companies from state workplace laws and stripping their workers of basic, essential protections.
Uber, Instacart, Lyft, DoorDash and other on-demand providers of ride-shares and food and grocery deliveries spent $200 million pushing the proposal, an astounding sum that workers and their allies couldn’t remotely hope to match. Not surprisingly, Californians were misled by an avalanche of claims about the proposal’s impact on workers. The measure, which takes effect next month, was approved with 58 percent of the vote.
Emboldened by the results in California, Uber and friends are apparently planning to take the show on the road. Potential targets could include Massachusetts or New Jersey, where state regulators have pursued them, or New York or Pennsylvania, where courts have rejected the argument by gig companies that workers run their own independent businesses. The rest of us need to understand what happened in California.
What was at stake with Proposition 22 was whether workers for app-based driver and delivery companies would be considered employees under California statutes, which like workplace laws nationwide, cover only employees, or whether they should be classified as independent contractors. Proponents argued that requiring gig companies to follow current laws would badly damage their on-demand business model and result in longer wait times, higher prices and the loss of countless jobs. These were the same bleak prognostications gig companies made about the minimum wage for drivers that New York City enacted two years ago — predictions that did not come to pass.
What they didn’t say was that it was a terrible deal for workers. Allowing companies to write their own exemption from California law is also a cautionary tale for our fragile democracy.
Now, workers for these gig companies in California will not have a right, as employees do under state law, to paid sick days, overtime pay, unemployment insurance or a workplace covered by occupational safety and health laws.
How did these companies persuade California voters to approve this snatching of rights from thousands of vulnerable people? They used a deluge of money to convince voters that the proposal served workers’ interests by preserving their flexibility, ensuring a guaranteed level of pay and providing them with “portable” benefits.
Their claims were deceptive.
There’s no law prohibiting flexible or part-time hours for employees. Millions of employees already work part-time or flexible hours. Indeed, these particular industries (ride-share and food delivery) would be unlikely to hire only full-time employees because of the ebb and flow of customer demand.
Under Proposition 22, gig companies will have to pay their contractors 120 percent of the state or local minimum wage. In addition, companies must pay 30 cents per mile for gas and other vehicle-related expenses, adjusted annually for inflation.
But here’s the catch: Workers will be paid only for “engaged time,” defined as the time between receiving a request and dropping off the passenger. This is far less than what’s required under laws for employees, who must be compensated for all work time. About a third of drivers’ work time wouldn’t fall within this definition of “engaged time,” according to a study funded by the companies themselves. Workers will not be paid for time spent getting gas, waiting for a ride request or cleaning and sanitizing their cars.
Plus, 30 cents per mile doesn’t cover all vehicle-related expenses; by comparison, the Internal Revenue Service’s optional standard deductible rate for the costs of operating a car for business is 57.5 cents per mile. And as independent contractors, drivers won’t have a right to overtime pay for long workweeks, as is required for employees. In light of all this, a study by three research groups at the University of California, Berkeley, found that Uber and Lyft drivers would be guaranteed only an estimated $5.64 per hour. This no doubt would have surprised 40 percent of those in a survey of early voters who said they had supported Proposition 22 to ensure workers earned livable wages.
Finally there is the issue of benefits. Gig companies have used snazzy “portable” benefits language, but Proposition 22 gives workers crumbs compared to what it takes away. Companies must provide a “health care subsidy” to people working at least 15 hours of “engaged time.” At 30 weekly hours, the subsidy would average about $1.22 per hour, or just over $36.00 a week, according to one analysis, a paltry sum compared with what workers would receive as employees who are paid for all of their work time — not just two-thirds of it.
And of course, rights are meaningful only if they are enforceable. If a company pays less than what’s required, shaves hours or doesn’t pay the health care subsidy, Proposition 22 is silent about what mechanism workers can use to enforce those pay and subsidy rights.
The kicker? Unlike most laws, which require only a majority vote of the State Legislature to revise, Proposition 22 requires the vote of seven-eighths of the Legislature to make any changes.
These are the truths that can be buried by well-funded advertising campaigns of large corporations collaborating to write their own rules. And this, in the end, is what’s most dangerous about Proposition 22. Companies shouldn’t be able to do this. Surely, lots of other industries would like to avoid paying unemployment insurance taxes, sick days or overtime. Surely, food manufacturers would like an exemption from safety requirements and inspections, and chemical companies would save a bundle if they got an exemption from environmental laws.
But that’s not how our system is supposed to work.
California has always been a bellwether. This time, let’s not follow its lead.
Lyft’s stock
market debut has set up its founders, employees, early backers and even
those who scored shares in the initial public offering Thursday night
for quite a windfall.
But not everyone who invested in the company is reaping the spoils.
Shares of the ride-hailing company
rose nearly 9 percent on Friday. At over $26 billion, Lyft’s market
value is almost double what private investors valued it at less than a
year ago.
But Lyft’s first-day gain is measured off the I.P.O. price (which was set on Thursday, when shares were divided up mostly among large funds). Ordinary investors who wanted in had to wait to buy the stock until it was available on public markets on Friday, and at a much higher price than the big funds paid.
And those who bought as soon as trading began are already sitting on losses of a little more than 11 percent.
It serves as an important reminder that amid all the hoopla around trading debuts, small investors wind up taking a lot of the risk. Most of the gains on the first day of trading for a stock are realized with the first trade.
Over the past decade, companies listing shares on American stock exchanges have increased 14 percent from their I.P.O. price, according to Dealogic. But nearly all of the rise has come at the opening trade.
That dynamic has
played out in many of the prominent I.P.O.s in recent years. Facebook
shares opened 10 percent higher on their first day of trading and then
proceeded to give back almost all those gains to finish essentially
unchanged for the day.
Etsy was an
extreme example of this. Its stock soared 94 percent on its first day of
trading, but investors who bought at the open actually lost 3 percent
by the close of trading.
And it’s not
just tech companies. Levi Strauss recently made its return to the
public markets, selling shares to investors at $17 a piece on March 20.
The stock opened the next day at $22.22, a 31 percent jump. For the rest
of trading that day, though, it climbed less than 1 percent.
Of
course, if Lyft keeps growing as fast as Wall Street hopes it will, or
works out how to turn a profit, then even the latecomers could wind up
with respectable returns. Facebook shares are up more than 300 percent
since their first day of trading, and after Etsy struggled for its first
three years as a public company, its shares have more than doubled
since they started trading.
Still,
not being able to buy at the I.P.O. price also greatly affects returns
over the next year. Investors who bought shares at the offering price
have averaged a 22 percent increase over the past decade. Returns for
those that bought at the open? Sixty percent less.
Money mistakes are a dime a dozen. Except, you know, they end up costing us a bit more than that.
Think More Critically About Your Resolutions
To prevent those costly financial blunders, we asked some financial advisors and professionals what clients tend to get wrong—and you should do differently going into 2019.
Don’t make News Year’s Resolutions. They don’t work.
Set
your goals now, or in early January (after the holiday). The goals need
to be realistic. This is key. If they are too hard or not remotely
achievable, most folks give up before they even start. When setting
goals, start small, then move up. For example, if you are contributing
three percent to your 401(k) plan, increase it to four percent. Then
plan six to nine months down the road to increase it to five percent.
Similarly, if your cash reserve fund is only one month’s living expenses, give yourself a period of time, say six months, to [get to] two months’ living expenses.
Small steps that are actually implemented have a much higher
chance of staying implemented. Then you can go from there and again,
slightly raise the goal.
The other thing people need to do is check in with their goals. This doesn’t mean following every movement in the stock market. This means reviewing your progress. This should be quarterly.
Pay Yourself First
The tumultuous markets sometimes cause people to quit contributing to their retirement plans, when we should do the opposite and continue to defer into our 401(k) or other retirement plans. If you are worried about volatility, you should still contribute, especially if you are many years away from retirement. Markets have historically gone through periods of decline and subsequently recovered.
Amazon.com informed some customers Wednesday that their names and email addresses had been “inadvertently disclosed” as a result of a “technical error” but declined to provide further details about the security incident.
The e-commerce giant confirmed it sent the messages, adding in a subsequent statement it had “fixed the issue.” It did not say how many of its users had been affected or where and how emails had been exposed. Amazon said only that its website and other systems had not been breached.
Amazon’s limited disclosure, days before the Black Friday and Cyber Monday holiday shopping frenzies, drew sharp criticism on social media. Among its own sellers, some took to the company’s forums to complain about Amazon’s tight-lipped handling of the matter. “Who knows what they’re not disclosing about this,” one user wrote. “Hopefully nothing …”
Others questioned Amazon after it told users there’s “no need for you to change your password or take any other action,” fearing the potential that hackers still might try to use their names and email addresses for nefarious purposes, including phishing scams.
In October, Amazon said it reportedly fired an employee who inappropriately shared customers’ emails with a third-party seller. The incident, which Amazon said it was working with law enforcement to investigate, similarly resulted in messages to customers indicating their email addresses had been exposed.
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