Business

$15 minimum wage an anchor on struggling businesses

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President Joe Biden has proposed a nationwide $15 minimum wage as part of his so-called “American Rescue Plan.” Talk about bad timing: Raising labor prices on businesses that are struggling to stay afloat is like throwing them a load of bricks instead of a life preserver.

State and local governments raising their minimum wages is one thing, but to more than double the federal minimum, from $7.25 to $15 per hour?

Nearly 1 in every 5 restaurants permanently closed their doors in 2020 as 30 large retail and restaurant companies filed for bankruptcy.

Meanwhile, employment in food services (restaurants and bars) fell 19% in 2020 as retail clothing jobs dropped 24% and accommodations (hotels) jobs plummeted 32%.

Although very few people — only about 1% of all workers and 0.1% of single parents — make the $7.25 minimum wage, a good portion of restaurant, retail and hotel jobs pay less than $15 per hour.

No one would suggest raising the rent on households who are months behind on their payments, so how could raising labor prices help businesses?

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Schnatter report vindicates him, indicts Papa John’s, marketing firm

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A former FBI director and federal judge has released a 14-page investigative report into the conduct of Papa John’s International Inc. founder and former CEO John Schnatter.

Former FBI head Louis Freeh released the report on Schnatter’s personal and professional conduct Tuesday. The report, commissioned by Schnatter’s attorneys in summer 2019, is the outcome of a year-long investigation into two key events: the Papa John’s and National Football League controversy of 2017 and the release of a recording of Schnatter using a racial slur during a media training session in 2018.

According to a news release, the investigation addressed comments Schnatter made about the NFL in an earnings call in 2017, and determined that he was “falsely construed as critici[zing] the players’ protests” in print and social media, when in fact he was describing “a lack of leadership in failing to resolve the matter to both the players’ and owners’ satisfaction.”

The 2018 media training session was the primary focus of the investigation, the release continued, and Freeh concluded that Schnatter “stress[ed] his disdain for racism” in the meeting and “at no time … express[ed] any beliefs that could be described as bigoted or intolerant.”

Although Schnatter “quoted a third party’s alleged use of the n-word” in order to separate himself from another company founder regarding attitudes on race, he did not “use the word as a racial slur nor was it directed at any person or group,” Freeh continued.

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Florida unemployment rate holds steady, as Orlando tops metro areas for joblessness

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Florida’s unemployment rate was unchanged from October at 6.4%, but Orlando recorded the highest number of any metropolitan area in the state at 7.7%.

A report released Friday by the Department of Economic Opportunity shows the continuing powerful effect of the coronavirus pandemic on the state and particularly Central Florida’s tourism-dependent economy.

In all, about 651,000 Floridians were jobless in November, the report says.

In Central Florida, Orange County came in at 8.1% for November, Osceola at 9.7%, Lake at 6.5% and Seminole at 5.7%. Osceola and Orange had the first- and second-highest county rates in the state.

Metro Orlando’s rate topped that of Miami’s, which in previous months had posted the highest percentage of joblessness.

Adrienne Johnston, DEO’s chief of the Bureau of Labor Market Statistics, said seasonal retail hiring was slow this year.

“I think we’re seeing where people are shopping online a little bit more of the season. Businesses did not add as many employees to their payrolls,” Johnson said in a conference call.

The overall U.S. unemployment rate for November was 6.7%.

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Disney’s theme park division loses $2.4 billion

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The coronavirus cost Disney’s theme park division $2.4 billion as Disneyland remains closed, cruise ships are docked and Disney World is open at a limited capacity, the company disclosed Thursday in its quarterly earnings report.

But looking ahead, executives expect the next few months to be busy in Orlando since about 77% of the park reservations are booked for the next quarter, including an almost completely full Thanksgiving holiday.

Disney CEO Bob Chapek said the reopening is going well enough for Disney World to raise occupancy from 25% to 35%, adding he believes it is still possible to maintain 6 feet of social distancing among visitors with the higher number of people allowed inside.

For the company, it’s a hopeful sign as Disney theme parks try to rebound from the global pandemic.

“We’re very pleased by how we have become adapt at operating under these constraints,” Chapek said during Thursday’s earnings call. He said Disney has a proven track record of running theme parks with new strict safety rules several months into the pandemic reopening.

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Disney fires back at Elizabeth Warren’s letter blasting the company’s 28,000 layoffs

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Walt Disney Co. is fighting back after Sen. Elizabeth Warren wrote a scathing open letter this week that slammed the company for reinstating pay for senior executives who had taken salary cuts during the coronavirus pandemic and other financial decisions benefiting shareholders before the company revealed massive layoffs.

Darden Restaurants reduces corporate staff as sales remain down during pandemic

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Darden Restaurants revealed Thursday it has cut 11% of its corporate workforce at its Orlando headquarters and in other leadership positions as the owner of Olive Garden continues to endure slower sales during the coronavirus pandemic.

The Olive Garden on North Orlando Avenue in Winter Park, photographed Thursday March 19, 2020. Darden Restaurants, which owns Olive Garden and other restaurant chains, reported quarterly earnings Thursday morning.

The company, which also owns LongHorn Steakhouse and other chains, said Thursday that same-restaurant sales were down 29% for the quarter ending Aug. 30 compared with the same quarter last year, but reported net earnings of $37 million from continuing operations.

At the same time, Darden has brought back thousands of its furloughed hourly employees in the past few months.

Darden shared details on the early retirement incentive program and corporate restructuring that led to the smaller corporate workforce on an earnings call.

“This restructuring resulted in a net 11% reduction in our workforce in the restaurant support center and field operations leadership positions,” CFO Rick Cardenas said, adding the move is expected to save the company between $25 million and $30 million annually.

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Layoffs in Central Florida keep piling up

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In the spring, as the new coronavirus began to spread throughout Central Florida, companies began shedding employees and Congress rushed in to provide some short-term relief.

Not knowing how severe the outbreak would become and how long its grip on the tourism-dependent region would last, executives hoped things would go back to normal soon.

But the layoffs haven’t stopped, and the calls to Congress for more help for the jobless and for the hotels, theme parks and other businesses that employed them have gone unanswered. It’s further evidence of the stark message Florida’s chief economist, Amy Baker, delivered to lawmakers Thursday that Florida tourism will take potentially three years to recover from this crisis.

In August alone, thousands more people were laid off or placed on furlough in Central Florida, mostly from hotels, according to a review of the state’s database.

The Hilton Orlando on Destination Parkway extended furloughs for 605 employees. The Orlando World Center Marriott laid off 601, saying it doesn’t expect occupancy to pick up until 2021. Eight Universal hotels, many of which have closed, furloughed or laid off 2,130 people.

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