COVID-19 Economic Impact on the Printing Industry
Sorenson advises completing the SBA Paycheck Protection Program loan application even though most banks are using an online application. That way, you will be prepared to move quickly should you decide to apply.
The loan amount is determined by multiplying your company’s average monthly payroll over the prior 12 months by 2.5. But what’s included in payroll? Sorenson answers in detail: salaries, wages, commission, and tips; vacation, medical, parental leave pay, and sick pay; payments for group healthcare benefits, including insurance premiums paid; and employer and employee contributions to retirement funds. (He even explains that contributions to post-tax Roth funds are treated differently from contributions to the more common pre-tax funds.) Concerning payroll taxes, state and local payroll taxes are included but federal FICA taxes are not.
And remember the advice of Cameron Albert-Deitch, author of “The Paycheck Protection Program: Chaos Begins,” in Inc: “Don't assume that because you've applied, your application will be processed or funded. A number of online financial firms, for example, are collecting applications. But many haven't yet been approved to make Paycheck Protection loans themselves. In the meantime, many companies are packaging up applications hoping to sell them to banks in bulk.”
Congress will allocate more money to the Paycheck Protection Program. They know the original $349 billion is not going to be nearly enough, given how rapidly the economy is contracting. Our job is to draw on resources such as the ones above to make sure we have timely, maximum access to funds, whatever the glitches.
Updated April 6, 2020 @ 9:25 AM
Recession? Or Depression?
This quarter GDP will decline at a 34.0% annual rate, according to Goldman Sachs, and the unemployment rate will reach 32.0%, according to an economist at the Federal Reserve Bank of St. Louis. Those are depression numbers. And as shocking as they are, initial claims for unemployment benefits suggest we could see them: During the two weeks ending March 28, claims jumped from 282,000 to 6.6 million, approximately 10 times the previous record high of 695,000.
Andrew D. Paparozzi joined PRINTING United Alliance as Chief Economist in 2018. He analyzes and reports on economic, technological, social and demographic trends that will define the printing industry’s future. His most important responsibility, however, is being an observer of the industry by listening to the issues and concerns of company owners, executives and managers.
Previously, he worked 31 years at the National Association for Printing Leadership. He has also taught mathematics, statistics and economics at various colleges.
Andrew holds a Bachelor’s degree in economics f rom Boston College and a Master’s degree in economics — with concentrations in econometrics and public finance — from Columbia University.