Month: April 2020

Preparing for Loss of Business Claims following COVID-19

The rise of COVID-19, followed by national stay-at-home orders, has caused many employers to temporarily close, furlough or completely lay off employees, and perhaps unfortunately, close their doors completely.  Businesses, no matter how small or large, are feeling the effects.  And so is their bottom line.  In the coming years, employment attorneys may see an increase in the number of businesses seeking claims for business interruption insurance.  When such cases arise, it is crucial to get the correct documents from the business in order to determine exactly how much revenue was lost.

As a general rule when valuing the lost profits of a business, it is important to get as much detailed information as possible for the past three to five years.  Tax records for the business will provide general information about the businesses success and overall projections for the future.  Profits and losses from past years of the business will allow economists to determine the trajectory of the business prior to the interruption.  If a business was declining in profits or had negative profits prior to the interruption, it is unlikely the business would have stayed afloat even if the interruption had not occurred.  On the other hand, a business could have been experiencing steady increases in profits or had plans to expand that were abruptly halted.  Understanding the overall state of the business is important to value potential losses.

In addition, weekly revenue and expense records will provide a much clearer picture of the state of the business pre- and post-disruption.  With a restaurant for example, it would be important to know each week what the typical sales were from food and alcohol separately, as well as the typical expenses associated with items like food purchasing, staff, and electricity prior to any disruption.  Detailed records prior to the disruption will then be able to be compared to current and future revenue and expenses to determine what the business has lost.  

Keep in mind, the type of information that will be available for each type of business will be different, as will the metrics of success.  However, this information above will give an economist the relevant background to assess any damages to the business. 

Texas Job Market Sees Increased Demand for Medical, Supply Chain Workers Amid Coronavirus

The 2020 coronavirus outbreak has sparked severe shocks to the United States labor market. Social distancing policies, designed to slow the spread of the disease, are leading to large layoffs in specific industries, like bars and restaurants. Many more employees in other sectors face the prospect of unemployment or temporary furloughs. Despite this economic strain, employers, particularly those in Medical and Supply Chain services, are expanding to meet new demand. These sectors continue to post job opportunities long after policymakers mandated the closure of non-essential services or issued “shelter-in-place” orders.

Evidence from Texas over the past half-month reveals both predictable and unexpected trends in new job opportunities. It may come as a surprise that, even in this “lockdown economy,” there is still help wanted.

Beginning on March 18th, Texas began implementing statewide social distancing policies, though some areas began issuing such orders days earlier. Cities and counties across the state gradually adopted “shelter-in-place” orders in March.  By March 31st, a statewide order asked residents to stay home, except if they participated in “essential services and activities.”

But within the past two weeks, Texas employers posted over 66,000 new job openings.

Daily job postings are one indicator of up-to-date labor market demand, available from a variety of sources (most notably online).  The Texas Workforce Commission (“TWC”) is the state agency responsible for managing and providing workforce development services to employers and potential employees in Texas.  One service the TWC provides is access to databases of up-to-date job postings for different occupations and employers within the state. These job postings can come from the TWC itself, or from third party sites like Monster or Indeed. This information is extraordinarily valuable to data scientists.

The top 10 in demand occupations cover a variety of occupations, but are heavily concentrated in the healthcare, supply chain, and IT sectors.

Given the stresses to the healthcare system, its little surprise that hospitals are looking for more front-line staff. Registered Nurses were the highest in demand occupation, with over 3,000 new job listings since March 23rd.

 

Retail supply chains are also expanding employment.  Sales Representatives for Wholesalers and Manufacturers, with over 2,300 new listings, was the second highest in demand occupation. Other logistical occupations saw large numbers of new openings, particularly for Truck Drivers, with over 1,200 new job postings since March 23rd.

Anecdotally, supermarkets and retail chains have been hiring more employees to meet increased demand for groceries and other supplies. Evidence from jobs posted since March 23rd would support this finding, with large increases in new listings for Customer Service Representatives (over 1,700), Supervisors of Retail Sales Workers (over 1,600), and Retail Salespersons (also over 1,600).

Finally, with the increase in service sector employees working from home, it should not be surprise that IT workers are also in high demand. Application Developers (over 2,100 new listings) and employees for general Computer Occupations (with 1,800 new listings) have both seen large increases in openings since March 23rd.

EmployStats will be closely monitoring daily job postings as the coronavirus outbreak continues.