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Is there a labor shortage? What the May jobs report tells us

Is there a labor shortage? What the May jobs report tells us

A help wanted sign is displayed outside of a business before Memorial Day near the boardwalk in Wildwood, New Jersey.

Spencer Platt | Getty Images News | Getty Images

The weaker-than-expected April jobs report fueled speculation of U.S. labor shortages and led some state officials to declare an early end to enhanced unemployment benefits.  

Yet forecasters hoping for clarity from the May tally may be left scratching their heads.

It’s hard to draw conclusions about sustained weakness or labor-supply issues from the data published Friday, according to economists. The May report offers something of a mixed bag and somewhat contradictory data points, they said.

“It’s a Rorschach test,” according to Nick Bunker, an economist at job site Indeed. “It’s a bunch of ink on a piece of paper, and everyone is seeing different images.”

May jobs report

On the other hand, job growth accelerated in May — new payrolls doubled from April. And the last few recessions were characterized by long job recoveries, economists said.

May’s job gains are also roughly equivalent to the average over the past three months — suggesting they were in line with what expectations should perhaps have been, Bunker said.

“I think it’s a story of expectation versus reality,” he said. “What’s a good pace of growth is sort of in the eye of the beholder.”

Labor force participation

Rising wages

Perhaps the most pronounced evidence of a labor shortage in the May jobs report is wage growth, especially in the labor and hospitality sector, according to Daniel Zhao, a senior economist at Glassdoor, a job and recruiting site.

Rising wages suggest businesses struggling to hire may be paying more to attract workers.

Unfortunately, the [May] report isn’t going to end this debate about labor shortages. Both sides have ammo to use to bolster their arguments.

Daniel Zhao

senior economist at Glassdoor

Hourly pay jumped nearly 9% over the past year, to $15.87, for non-managerial workers in the sector, which includes restaurants, hotels and bars, for example. (Earnings grew by $0.19 an hour from April.)

That growth is significant since leisure and hospitality seems to be where hiring challenges are being most widely reported, Zhao said.

However, the bump may not be solely — or even mostly — attributable to businesses raising pay.

Critics of the labor-shortage argument point to other data points, such as average hours worked remaining relatively flat. (Businesses tend to boost hours for existing workers if they can’t onboard other staff.)

“Unfortunately, the [May] report isn’t going to end this debate about labor shortages,” Zhao said. “Both sides have ammo to use to bolster their arguments.”

What’s causing supply constraints?

To the extent that there are labor shortages, hiring challenges are likely to be temporary, according to economists.

Twenty-five states are ending enhanced federal unemployment benefits earlier than their official Sept. 6 expiration to try to encourage reentry to the labor force.

The earliest that the states, all led by Republican governors, are doing so is June 12.

“The most vocal source of speculation [for labor shortages] is that the supplement to weekly unemployment benefits is enticing a lot of people to stay home,” said Erica Groshen, a labor economist at Cornell University and a former commissioner of the Bureau of Labor Statistics during the Obama administration. “I think that’s far too simplistic.”

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Stocks making the biggest moves in the premarket: G-III Apparel, U.S. Concrete, QTS Realty Trust & more

Stocks making the biggest moves in the premarket: G-III Apparel, U.S. Concrete, QTS Realty Trust & more

Take a look at some of the biggest movers in the premarket:

Amazon.com (AMZN) – CEO Jeff Bezos announced that he and his brother Mark will join an auction winner aboard the first human spaceflight by Bezos’ Blue Origin on July 20. Bezos is set to step down as Amazon CEO on July 5 in favor of Andy Jassy.

U.S. Concrete (USCR) – The concrete supplier agreed to be bought by construction materials maker Vulcan Materials (VMC) for $74 per share in cash, or about $1.29 billion. That’s a nearly 30% premium over U.S. Concrete’s Friday closing price of $57.14. U.S. Concrete shares soared 27.7% in premarket action.

G-III Apparel (GIII) – The apparel maker reported quarterly earnings of 53 cents per share, compared to a 15 cents a share consensus estimate. Revenue also came in above Wall Street forecasts. G-III issued an upbeat full-year outlook as well, noting growth in sales of its sportswear and wear-to-work attire. Its shares rallied 5.8% in premarket trading.

Blackstone (BX), Carlyle Group (CG) – The two private-equity firms, along with Hellman & Friedman, agreed to buy medical supplies company Medline Industries for about $34 billion including debt, according to people familiar with the matter who spoke to The Wall Street Journal. That would be the largest leveraged buyout deal since the 2008 financial crisis. Separately, the Journal reports that Blackstone will announce a deal to buy data center operator QTS Realty Trust (QTS) for $6.7 billion. QTS shares leaped 19.8% in the premarket.

“Meme” stocks – These stocks will remain in the spotlight, after wide swings last week for the likes of AMC Entertainment (AMC), Bed Bath & Beyond (BBBY), GameStop (GME), BlackBerry (BB) and Koss Corp (KOSS). The biggest premarket moves came from BlackBerry, up 1.4% and Koss, down 2.7%.

Lordstown Motors (RIDE) – Lordstown Motors received a delinquency notice from Nasdaq due to a late filing for its quarterly report. The electric vehicle company said it does intend to file its form 10-Q as soon as possible.

Biogen (BIIB) – The drugmaker’s shares gained 2.2% in the premarket ahead of an expected ruling by the Food and Drug Administration on Biogen’s experimental Alzheimer’s treatment aducanumab. The drug would be the first major drug approved for Alzheimer’s, but some experts say there’s not enough evidence the treatment provides meaningful benefit.

Tesla (TSLA) – Tesla has canceled production of its planned Tesla Model S Plaid+, a high-end version of the Model S with a projected range of 520 miles. The Tesla Model S Plaid – with a projected range of 390 miles – is set to be released next week.

Microsoft (MSFT) – Microsoft won approval from U.S. antitrust regulators for its $16 billion deal to buy artificial intelligence company Nuance Communications (NUAN). Microsoft said reviews are still taking place in other jurisdictions, but that it expected to close the deal by the end of 2021.

KKR (KKR) – KKR will buy airport services company Atlantic Aviation from current owner Macquarie Infrastructure (MIC) for nearly $4.5 billion, seeking to benefit from growing demand for private jet services. KKR added 1.5% in premarket action.

Visa (V) – Visa was upgraded to “overweight” from “neutral” at Piper Sandler, which said it expected the payments network operator to benefit more from the vaccine-driven U.S. recovery than rival Mastercard (MA). Visa added 1.1% in the premarket.

Peloton (PTON) – The fitness equipment maker was rated “buy” in new coverage at Loop Capital, which notes a 40% drop from January highs and an expectation that the financial impact of the company’s treadmill recalls is likely overstated. Peloton rose 1.2% in premarket trading.

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Punjab government extends Covid curbs till June 15; orders graded relaxations from tomorrow

Punjab government extends Covid curbs till June 15; orders graded relaxations from tomorrow

The Punjab government today extended the lockdown in the state till June 15. However, some restrictions have been eased. Shops are now allowed to remain open till 6 pm, private offices are allowed to function at 50 per cent capacity.

Night curfew to remain in force from 7pm-6am on weekdays but regular curfew will continue on Sundays, read the circular from the chief minister’s office.

The second wave of the pandemic has now seen a steady drop for four consecutive weeks across the country. Several states and Union territories (UTs) have announced relaxations in curbs, which, in most places, come into effect from today.

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5 things to know before the stock market opens Monday

5 things to know before the stock market opens Monday

Here are the most important news, trends and analysis that investors need to start their trading day:

1. Dow, S&P 500 stand less than 1% from record closing highs

A trader at the New York Stock Exchange, June 4, 2021.

Source: NYSE

2. Jeff Bezos to fly on first Blue Origin passenger spaceflight in July

Jeff Bezos drives a Rivian R1T electric truck around Blue Origin’s launch facility in Texas.

Blue Origin

3. Elon Musk says Tesla officially canceled the Model S Plaid Plus

4. AMC shares muted after skyrocketing in a wild trading week

Pedestrians pass in front of an AMC theater in New York.

Scott Mlyn | CNBC

Emily Blunt, Millicent Simmonds and Noah Jupe star in “A Quiet Place Part II.”


The movie theater business, decimated by the Covid pandemic, showed more signs of getting back toward normal. “A Quiet Place Part II,” after a stellar opening weekend, fell 59% to $19.5 million. However, the Paramount sequel has so far made $88.6 million in the U.S. and Canada. “The Conjuring: The Devil Made Me Do It” from Warner Bros. topped the weekend box office, debuting with a $24 million haul.

5. G-7 reaches global tax reform deal; Yellen talks Biden agenda, rates

Britain’s Chancellor of the Exchequer Rishi Sunak (center), U.S. Treasury Secretary Janet Yellen (right) attend the first day of the G-7 Finance Ministers Meeting at Lancaster House in London on June 4, 2021.

Stefam Rousseau | AFP | Getty Images

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Covishield produces more antibodies than Covaxin, finds study

Covishield produces more antibodies than Covaxin, finds study

The Covishield vaccine produces more antibodies than Covaxin though both generate a “good immune response”, says a pan-India study of healthcare workers who had received both doses of the preventives. The yet-to-be-published study, posted on the preprint repository MedRxiv on June 4, covered 515 healthcare workers (HCW) — 305 men and 210 women — from 22 cities in 13 states.

Covishield, from the Oxford-AstraZeneca stable, is manufactured by the Serum Institute of India in Pune. Covaxin is the indigenously manufactured vaccine by Hyderabad-based Bharat Biotech in collaboration with ICMR and National Institute of Virology (NIV).

The blood samples of those participating in the study were tested for the quantity of antibodies produced and levels of specific antibodies that are directed to the spike protein of the virus, which is regarded as a proxy for protection.

“Both vaccines elicited good immune response after two doses, although seropositivity rates and antibody levels were significantly higher in Covishield compared to Covaxin,” Awadhesh Kumar Singh, lead author of the study and consultant endocrinologist, G D Hospital and Diabetes Institute, Kolkata, said in a tweet.

Seropositivity was observed in a higher number of people vaccinated with Covishield as compared to those immunised with Covaxin.

“Among the 515 HCW, 95 per cent showed seropositivity after two doses of both vaccines. Of the 425 Covishield and 90 Covaxin recipients, 98.1 per cent and 80 per cent respectively, showed seropositivity,” said the study authors.

Seropositivity refers to the production of antibodies in an individual.

The study was conducted by researchers from various institutes, including Ahmedabad’s Vijayratna Diabetes Centre, Kolkata’s G D Hospital and Diabetes Institute, Dhanbad’s Diabetes and Heart Research Centre and the Rajasthan Hospital and Mahatma Gandhi Medical College and Hospital in Jaipur.

The rise in anti-spike antibodies was also “significantly higher in Covishield vs Covaxin recipient” at 127 absorbance units per milliliter (AU/mL) and 53 AU/mL respectively, the authors noted.

AU is the unit of measuring antibody levels.

Apart from finding higher seropositivity among Covishield recipients, the study found that seropositivity rate was “significantly more” in participants with an age of 60 or less compared to those above 60.

While factors such as gender, body mass index (BMI) and other comorbidities didn’t make any difference, the seropositivity rate or antibodies in people with type 2 diabetes was found to be significantly lower.

The researchers also compared the post-vaccination immune responses of all participants with those who had a history of COVID- 19, and those who didn’t.

It found that participants who had recovered from COVID-19 at least six weeks before the first dose of both vaccines, and later took both shots, were 100 per cent seropositive, and had higher antibody levels compared to others.

“The past history of SARS-CoV-2 infection elicited a significantly greater median antibody titre, compared to SARS-CoV-2 naive cohorts, irrespective of the type of vaccine received,” the researchers noted.

Breakthrough infections, defined as SARS-CoV-2 infection over two weeks after the second dose, were reported in 4.9 per cent of cases following both vaccines, according to the study authors.

Such infections were noted in 5.5 per cent of people in Covishield, and 2.2 per cent of Covaxin recipients, they said.

Covaxin is an inactivated vaccine that contains the dead virus. Preliminary data of the Phase 3 trials shows that Covaxin has an efficacy rate of 81 per cent. The duration between the two doses is 28 days.

Covishield is based on the viral vector platform and is made from a weakened version of a common cold virus from chimpanzees. The two doses of Covishield are administered 12 weeks apart. It has an efficacy of over 70 per cent.

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Jeff Bezos will fly on the first passenger spaceflight of his company Blue Origin in July

Jeff Bezos will fly on the first passenger spaceflight of his company Blue Origin in July

Jeff Bezos takes a look at the New Shepard rocket booster on the landing pad after a successful NS-15 flight and landing in April 2021.

Blue Origin

Jeff Bezos will fly on the first passenger flight of his space company Blue Origin, which the company plans to launch on July 20, the billionaire announced on Monday.

“I want to go on this flight because it’s the thing I’ve wanted to do all my life,” Bezos said in a video posted to his Instagram.

Bezos’ brother will join him, as well as the winner of a public auction being held for one of the seats. Bidding on the auction stood at $2.8 million before Bezos announced he would fly.

Blue Origin’s space tourism system New Shepard, a rocket that carries a capsule to the edge of space, has flown more than a dozen successful test flights without passengers on board, including one in April at the company’s facility in the Texas desert.

New Shepard is designed to carry as many as six people at a time on a ride past the edge of space, with the capsules on previous test flights reaching an altitude of more than 340,000 feet (or more than 100 kilometers). The capsule has massive windows to give passengers a view, spending a few minutes in zero gravity before returning to Earth.

Jeff Bezos opens the hatch of the New Shepard capsule after a test flight in April 2021.

Blue Origin

The rocket launches vertically, with the booster detaching and returning to land at a concrete pad nearby. The capsule’s return is slowed by a set of parachutes, before softly landing in the desert.

July 20 will mark the 52nd anniversary of the Apollo 11 moon landing.

This story is developing. Please check back for updates.

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‘The beginning of a long road’: Global tax reform will take sweat and tears to implement, experts say

'The beginning of a long road': Global tax reform will take sweat and tears to implement, experts say

Britain’s Chancellor of the Exchequer Rishi Sunak (R) welcomes US Treasury Secretary Janet Yellen to the G7 Finance Ministers Meeting at Lancaster House, central London on June 4, 2021.

STEVE REIGATE | AFP | Getty Images

Group of Seven (G-7) finance ministers might be congratulating themselves on their deal to agree to a 15% minimum global corporate tax rate, but they’re already facing criticism that it doesn’t go far enough and will take much more time, coordination and cooperation to conclude.

G-7 ministers hailed the deal, agreed in principle, as a milestone in global cooperation on corporation tax after years of discord over the matter, particularly over the taxation of large multinationals, especially tech giants.

As it stands, the agreement only involves the G-7 members Canada, France, Germany, Italy, Japan, the U.K., U.S. and the EU and faces much deeper and likely protracted negotiations.

U.K. Finance Minister Rishi Sunak, who hosted his fellow G-7 ministers for talks in London, said on Saturday that the ministers had “reached a historic agreement to reform the global tax system, to make it fit for the global digital age — and crucially to make sure that it’s fair so that the right companies pay the right tax in the right places.”

U.S. Treasury Secretary Janet Yellen said a global minimum rate would end “the race-to-the-bottom in corporate taxation.”

The agreement will be discussed further at a Group of Twenty (G-20) meeting next month and comes just days before a meeting of G-7 leaders in the U.K. that begins on Friday.

While the finance ministers leading the world’s most advanced economies might have lauded the deal, many experts are not so impressed and say the 15% minimum tax rate is not ambitious enough, and tricky to implement.

The beginning of a long road

George Dibb, head of the Centre for Economic Justice at the London-based Institute for Public Policy Research (IPPR), told CNBC that “there are big questions around the level that we set this minimum tax at” but said it was still “a major step forward getting this global consensus.”

“We would like to see something a lot closer to 25%. The Biden administration came into these negotiations with an opening offer of 21% but I think the big fight at the G-7 over Friday and Saturday was over the wording, about whether it would say ‘15%’ or ‘at least 15%’ and because we have that wording now of ‘at least 15%’ the door is still open for negotiation,” he told Squawk Box Europe.

“This is the beginning of a long road … The challenge here on international taxation of large multinational companies is that it really is a collective action problem. You need not all countries but most countries and larger economies to move at the same time.”

Italy’s Economy and Finance Minister Daniele Franco, France’s Economy and Finance Minister Bruno Le Maire, Canada’s Finance Minister Chrystia Freeland, Britain’s Chancellor of the Exchequer Rishi Sunak, Managing Director of the IMF Kristalina Georgieva, Germany’s Finance Minister Olaf Scholz, US Treasury Secretary Janet Yellen take their places as they prepare to pose for a family photo on the second day of the G7 Finance Ministers Meeting, at Lancaster House in London on June 5, 2021.


Jim Reid, global head of Fundamental Credit Strategy and Thematic Research at Deutsche Bank, told CNBC that the agreement was a “turning point” but the outlook was unclear.

“The news over the weekend is not radical in itself, but it probably is a signal of things to come,” he told CNBC’s Street Signs.

“I suspect we have hit the bottom in (terms of) corporation tax but it’s still unclear how much it can move upwards in a world where we’re still relatively globalized and obviously to make it fully work we need more countries on board than just the G-7 agreement, but it’s probably a turning point.”

He noted that the focus would now shift to a meeting of G20 finance minister in July to see “if we can get wider agreement and … long-running talks between about 140 countries at the OECD.”

Organizations and charities that have long campaigned for global corporate tax rates to be higher largely panned the announcement on Saturday. Gabriela Bucher, executive director of Oxfam International, was among those stating that the deal didn’t go far enough.

“It’s about time that some of the world’s most powerful economies force multinational corporations, including tech and pharma giants, to pay their fair share of tax,” Bucher said. “However, fixing a global minimum corporate tax rate of just 15 percent is far too low. It will do little to end the damaging race to the bottom on corporate tax and curtail the widespread use of tax havens.” 
She added that it was “absurd for the G-7 to claim it is ‘overhauling’ a broken global tax system by setting up a global minimum corporate tax rate that is similar to the soft rates” charged by Ireland (which charges 12.5%), Switzerland (around 15%) and Singapore (around 17%).

“In a world beset by a pandemic, at a time of such desperate need, the G-7 looked at corporate balance sheets bursting at the seams with over-inflated profits ― and immediately looked away,” she said.

Years to conclude?

Gilles Moëc, group chief economist at AXA Investment Managers, noted on Monday that much deeper coordination, negotiation and time was necessary for any agreement to be concluded, and that could take several years.

“The G7 agreement will need to be confirmed at the G20 in July, and then negotiated even more broadly under the aegis of the OECD. The level — 15%, while Biden had opened with 21% — makes it possibly more digestible to the low-tax countries such as Ireland (its own tax rate is at 12.5%), which would make a generalized deal easier,” he said in a note.

“Still these countries will probably consider that once the principle of a minimum tax is agreed, then there is a significant likelihood the rate would gradually rise (the communique reads ‘at least 15%’), but it will take time and immense technical work before actual changes are implemented. The French Finance Minister Bruno le Maire mentioned ‘2 to 3 years’ on Sunday,” he added.

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France fines Google $267 million for abusing ‘dominant position’ in online advertising

France fines Google 7 million for abusing ‘dominant position’ in online advertising

Sundar Pichai, chief executive officer at Google LLC, speaks during the Google Cloud Next ’19 event in San Francisco, California, U.S., on Tuesday, April 9, 2019.

Michael Short | Bloomberg | Getty Images

France’s competition watchdog has fined Google 220 million euros ($268 million) for abusing its market power in the online advertising industry.

The French Competition Authority said Monday Google had unfairly sent business to its own services, and discriminated against the competition. Google has agreed to end some of its self-preferencing practices, the watchdog said.

The investigation found that Google gave preferential treatment to its DFP advertising server, which allows publishers of sites and applications to sell their advertising space, and its SSP AdX listing platform, which organizes auction processes and allows publishers to sell their “impressions” or advertising inventory to advertisers. Google’s rivals and publishers suffered as a result, the regulator said.

Isabelle de Silva, president of the French Competition Authority, said in a statement that the decision is the first in the world “to look at the complex algorithmic auction processes by which online advertising ‘display’ operates.”

She added that the investigation revealed processes by which Google favored itself over its competitors on both advertising servers and supply-side platforms, which are pieces of software used by publishers to manage, sell and optimize ad space on their websites and mobile apps.

“These very serious practices have penalized competition in the emerging online advertising market, and have enabled Google not only to preserve but also to increase its dominant position,” said de Silva.

“This sanction and these commitments will make it possible to re-establish a level playing field for all actors, and the ability of publishers to make the most of their advertising spaces.”

The investigation comes after U.S.-based News Corp, French newspaper Le Figaro and the Belgian press group Rossel filed a complaint against Google.

Regulators across Europe are clamping down on the major U.S. tech giants amid concerns that they wield too much power on the bloc’s 700 million plus citizens.

Last week, Facebook was hit by two antitrust probes from regulators in the U.K. and Europe.

The European Commission has launched probes into Amazon, Google and Microsoft over the last few years, while the U.K.’s Competition and Markets Authority has also launched probes into Google and Apple since it became an independent regulator in its own right in January following Britain’s exit from the EU.

Google did not immediately respond to CNBC’s request for comment.

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Lokpal received 110 corruption complaints, four against MPs, in 2020-21

Lokpal received 110 corruption complaints, four against MPs, in 2020-21

As many as 110 complaints, including four against Members of Parliament, were received by anti-corruption ombudsman Lokpal during 2020-21, registering over 92 per cent decline from the number of plaints received in 2019-20, according to latest official data.

The Lokpal had received 1,427 corruption complaints in 2019-20, it said.

Of the total complaints received in the last fiscal, 57 were against Group A or Group B central government officials, 44 against chairpersons, members and employees of different boards/corporations/autonomous bodies wholly or partially financed by the Centre, and five were in the “others” category, it said.

President Ram Nath Kovind had on March 23, 2019 administered the oath of office to Justice Pinaki Chandra Ghose as the chairperson of Lokpal, the apex body to inquire and investigate into allegations of corruption against public functionaries, including the prime minister.

The Lokpal’s eight members–four judicial and the rest non-judicial–were administered the oath of office by Justice Ghose on March 27 that year. At present, the Lokpal has vacancy of two judicial members.

The Lokpal ordered preliminary inquiry into 30 complaints and closed 75 plaints after preliminary examination, the data said.

A total of 13 complaints were closed after considering preliminary inquiry report in 2020-21, it said.

As many as 14 complaints sent for preliminary inquiry against Group A and B officials were pending with the chief vigilance commissioner (CVC) and three with the Central Bureau of Investigation (CBI), said the Lokpal data.

An action taken report in one case was pending with the Delhi Development Authority (DDA), it said.

Of the 1,427 complaints received by the Lokpal during 2019-20, 613 were related to state government officials and four against Union ministers and Members of Parliament (MPs), according to the data.

It said 245 complaints were against central government officials, 200 against those in public sector undertakings, statutory bodies, judicial institutions and autonomous bodies at the central level, and 135 were against private persons and organisations.

There were six complaints against state ministers and members of legislative assemblies and four against Union ministers, the data said.

Of the total complaints, 220 were requests/comments or suggestions, it said.

As many as 613 complaints were related to state government officials, public sector undertakings, statutory bodies, judicial institutions and autonomous bodies at state level, the data said.

Of the total complaints, 1,347 were disposed of, it said, adding that 1,152 complaints were beyond the Lokpal’s jurisdiction.

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LGBTQ small businesses confident about post-pandemic future but don’t have succession plans in place

LGBTQ small businesses confident about post-pandemic future but don't have succession plans in place

MoMo Productions | Stone | Getty Images

LGBTQ small business owners are confident about their post-pandemic recovery, but more than 78% don’t have a succession plan in place, according to a new CNBC + Acorns and NGLCC Small Business Owner Financial Health Survey.

Since many small businesses are handed down generation to generation, that’s really frightening, said Justin Nelson, co-founder of the National LGBT Chamber of Commerce.

“We have a number of same-sex couples that that may or may not have children, so there may not be a hereditary succession plan,” he said.

“They absolutely need to start thinking about a succession plan for their company and what happens when either they decide it’s time to retire or step back from a main management role.”

When it comes to saving for retirement, about 70% of LGBTQ small business owners are doing so in 401(k) plans, individual retirement accounts, SEP IRAs or similar plans. Meanwhile, 23% are currently not saving at all, they survey found.

The Formstack online poll was conducted May 12-21 among a national sample of 2,361 adults. The respondents were selected from the more than 1,600 certified LGBT Business Enterprises, as well as thousands of LGBT business owner members across the 50-plus local affiliates of the NGLCC.

For 46-year-old NiK Kacy, funding a retirement plan isn’t an option right now. Kacy, a transmasculine nonbinary queer Asian, quit their job at Google in 2013 to start a namesake footwear business that addresses the lack of options available to the LGBTQ community.

NiK Kacy, founder of NiK Kacy Footwear, has a 401(k) from a previous job but has not saved for retirement since starting their company.

Photo: Nicolette J-Pownall

“I would love a lot of the men’s shoes, but whenever I would try to go find something similar to wear for myself, I was told I was in the wrong section or they didn’t make my size,” said Kacy, who was assigned female at birth.

Fortunately, Kacy has a 401(k) plan from their time at Google. However, these days, any money coming in goes towards their business or living expenses, which are very tight.

With their business dropping 60% during the pandemic, they are wondering if it would be smarter to get a full-time job with benefits, and continue NiK Kacy Footwear on the side, with employees.

“I am wondering, what is going to happen to me when I get older?” Kacy said.

More from Invest in You:
Start-ups boomed during Covid. How some entrepreneurs found a niche
Shoe company Birdies soared during the pandemic and learned a hard lesson
Here’s how these small businesses pivoted to survive during the pandemic

That’s a very real concern for many small business owners, who may have to figure out the best vehicle to save in, since any 401(k) plans would be from former employers.

Yet, they should remember the old adage “pay yourself first,” said certified financial planner M. David Goldstein, CEO and chief investment officer of Washington, D.C.-based Kalorama Wealth Strategies, a financial planning firm focused on members of the gay and lesbian community.

“Once the business has sufficient excess cash flow, beyond your basic living needs, that should become part of the business and personal spending plan or budget,” he said.

Debt and credit concerns

The survey also found that 45% of LGBTQ small business owners don’t stick to a personal budget each month.

More than half are carrying personal debt to support their business, yet 45% say their business doesn’t currently carry debt.

Nearly 20% have $10,000 or more in credit card debt.

NGLCC’s Nelson sees a disconnect between what LGBTQ owners should be able to access and what they are actually able to acquire for their businesses.

Of those polled, 40% had an exceptional credit score (800-850) and 28% had a very good score (740-799).

“We tend to have this exceptional level of credit, yet there are still credit crunches for small businesses,” he said.

Covid impact

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