- Shake Shack will return the $10 million it received from the Payroll Protection Program so that other small businesses have a chance at gaining financial assistance.
- The PPP ran out of funding after two weeks, leaving many small businesses empty-handed, many of which have less access to other company-saving means than chains like Shake Shack.
- Shake Shack is also just one of the many chain restaurants that got millions of dollars the PPP, which has led to frustrations about how PPP funding was distributed.
- Congress is working on getting more funding for the PPP, with a plan that could add another $310 billion, as well as $75 billion to help hospitals and $25 billion to expand testing nationwide.
Shake Shack Returns Loan
Shake Shack is returning the $10 million it received from the Payroll Protection Program so that businesses in higher need for financial assistance can get it.
The New York-based burger joint, which is publicly traded and has 275 locations worldwide, released a statement on Monday morning announcing their decision.
“We’re thankful for [the loan] and we’ve decided to immediately return the entire $10 million PPP loan we received last week to the SBA so that those restaurants who need it most can get it now,” CEO Randy Garutti wrote.
Chain restaurants and hotels with under 500 employees per location were eligible for the PPP loan. According to Garutti, very few, if any, chain restaurants employ more than that per location. He said that the PPP “came with no user manual and it was extremely confusing” but that his company ultimately decided to apply “to protect as many of our employees’ jobs as possible.”
Garutti released this statement along with Danny Meyer, the CEO of Union Square Hospitality Group, which founded Shake Shack. While Shake Shack has taken a financial hit as a result of the coronavirus, USHG is facing harder times. USHG is an independent restaurant group in New York, and it closed all of its restaurants in March. The group also laid off 2,000 employees.
Independent Businesses Get Left Out
USHG was able to get some loans approved, but not enough. Like many other small businesses in the country, the PPP ran out of funding before it could give them their much-needed boost. Still, on top of Shake Shack, other chains like Ruth’s Chris Steakhouse, Potbelly Sandwich Shop, Kura Sushi and more got a pretty penny from the loan.
“If this act were written for small businesses, how is it possible that so many independent restaurants whose employees needed just as much help were unable to receive funding?” the statement by Garutti and Meyer continued. “We now know that the first phase of the PPP was underfunded, and many who need it most, haven’t gotten any assistance.”
While both Shake Shack and USHG are based in the Big Apple, small businesses around the country are feeling the impacts of this. April Richardson, the owner of local D.C bakery DC Sweet Potato Cake told CNN she applied for the PPP and got nothing. Richardson was hoping for far less than the millions places like Shake Shack received, with the report noting that a potential $23,000 would have gone a long way for her bakery.
Since she did not get it, she had to ask three of her employees to file for unemployment.
“It’s a reminder to small businesses that our voices are dampened,” she told CNN. “What are we doing this for? Why are we in business just to be told we’re not good enough because we’re not big enough?”
The Future of the PPP
Because the funding ran out so quickly and was spread to chains who seemingly do not need it as much as hyperlocal businesses, Garutti and Meyer laid out suggestions for how Congress should amend the PPP going forward. They advised legislators to spread funding more efficiently and assign restaurants to banks so that locations without pre-existing bank relationships are not left out. They also urged them to remove the clause that states that businesses rehire employees by June.
“That timeline is unlikely achievable for full service restaurants,” they wrote, specifically referencing spots based in New York, which has become the epicenter of the U.S. outbreak.
There are plans in motion to add more funding to the PPP. Treasury Secretary Steven Mnuchin is hopeful that Congress can get something agreed on as soon as Monday, with a vote by Wednesday. This deal would send another $310 billion to the PPP. Another $75 billion would help hospitals and another $25 billion would expand testing nationwide.
It is unclear how negotiations will go, as Democrats have been pushing for more hospital funding, while Republicans want that funding to be allocated in an entirely separate piece of legislation.
See what others are saying: (CNN) (Wall Street Journal) (NPR)
Kim Kardashian to Pay $1.26 Million to SEC Over Unlawful Crypto Promotion
According to the agency, stars and influencers must disclose how much money they earned for crypto advertising.
Kardashian Pays Up
The U.S. Securities and Exchange Commission announced Monday that it has charged reality TV star Kim Kardashian for “unlawfully touting crypto security.”
Kardashian has agreed to pay $1.26 million in penalties, disgorgement, and interest while cooperating with the SEC’s investigation. The media mogul did not admit to or deny the SEC’s findings as part of the settlement, but she did agree to not promote crypto assets for three years.
According to a statement from the SEC, federal regulators found that Kardashian “failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens.”
“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors,” SEC Chair Gary Gensler said in a statement.
The investigation stemmed from a post that Kardashian made on her Instagram story in the summer of 2021 promoting EthereumMax. In it, she asked her 330 million followers if they were interested in cryptocurrency while giving information about the coin. The post included a swipe-up link for users to get more information and potentially invest in it themselves.
While Kardashian did include a hashtag denoting the post as an ad, the SEC said that did not go far enough. In the group’s statement, Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, explained that anyone advertising crypto assets “must disclose the nature, source, and amount of compensation they received in exchange for the promotion.”
A “Reminder” For Crypto Promoters
As a result, the billionaire businesswoman is paying a $1 million penalty fee. On top of that, she has to pay $260,000 in disgorgement, accounting for the payment she received from Ethereum Max and interest.
Kardashian’s lawyer released a statement saying the star has “fully cooperated with the SEC from the very beginning.”
“She remains willing to do whatever she can to assist the SEC in this matter,” the statement continued. “She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
This is not the first time Kardashian’s EMAX post landed her in hot water. A U.K. watchdog previously condemned her for shilling the coin, and she was sued earlier this year over allegations that she artificially inflated the coin’s value.
Gensler said that he hopes the charges from the SEC will serve as “a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities.”
Misinformation Makes Up 20% of Top Search Results For Current Events on TikTok, New Research Finds
According to the report, the app “is consistently feeding millions of young users health misinformation, including some claims that could be dangerous to users’ health.”
Misinformation Thrives on TikTok
As TikTok becomes Gen Z’s favorite search engine, new research by journalism and tech group NewsGuard found that the video app frequently suggests misinformation to users searching for news-related topics.
NewsGuard used TikTok’s search bar to look up trending news subjects like the 2020 election, COVID-19, the invasion of Ukraine, the upcoming midterms, abortion, school shootings, and more. It analyzed 540 videos based on the top 20 results from 27 subject searches, finding false or misleading claims in 105 of those posts.
In other words, roughly 20% of the results contained misinformation.
Some of NewsGuard’s searches contained neutral phrases and words like “2022 election” or “mRNA vaccine,” while others were loaded with more controversial language like “January 6 FBI” or “Uvalde TX conspiracy.” In many cases, those controversial phrases were suggested by TikTok’s own search bar.
The researchers noted that, for example, during a search on climate change, “climate change debunked” showed up. While looking up COVID-19 vaccines, searches for “covid vaccine injury” or “covid vaccine exposed” were recommended.
Dangerous Results Regarding Health and More
The consequences of some of the false claims made in these videos can be severe. NewsGuard wrote in its report that the search engine “is consistently feeding millions of young users health misinformation, including some claims that could be dangerous to users’ health.”
Among the hoards of hazardous health claims were videos falsely suggesting that COVID-19 vaccines are toxic and cause permanent damage to organs. The report found that there are still several videos touting the anti-parasite hydroxychloroquine as a cure-all remedy, not just for COVID, but for any illness.
Searches regarding herbal abortions were particularly troublesome. While certain phrases like “mugwort abortion” were blocked, the researchers found several ways around this that lead to multiple videos touting debunked DIY abortion remedies that are not only proven to be ineffective, but can also pose serious health risks.
NewsGuard claimed that the social media app vowed to remove this content in July, but “two months later, herbal abortion content continues to be easily accessible on the platform.”
Other standard forms of conspiracy fodder also occupied space in top search results, including claims that the Uvalde school shooting was planned and that the 2020 presidential election was stolen.
TikTok’s Search Engine Vs. Google
As part of its research, NewsGuard compared TikTok’s search results and suggestions with Google and found that, by comparison, the latter “provided higher-quality and less-polarizing results, with far less misinformation.”
“For example, searching ‘covid vaccine’ on Google prompted ‘walk-in covid vaccine,’ ‘which covid vaccine is best,’ and ‘types of covid vaccines,’” NewsGuard wrote. “None of these terms was suggested by TikTok.”
This is significant because recent reports show that young Internet users have increasingly turned to TikTok as a search engine over Google. While this might elicit safe results for pasta recipes and DIY tutorials, for people searching for current affairs, there could be significant consequences.
NewsGuard said that it flagged six videos containing misinformation to TikTok, and the social media app ended up taking those posts down. In a statement to Mashable, the company pledged to fight against misinformation on its platform.
“Our Community Guidelines make clear that we do not allow harmful misinformation, including medical misinformation, and we will remove it from the platform,” the statement said. “We partner with credible voices to elevate authoritative content on topics related to public health, and partner with independent fact-checkers who help us to assess the accuracy of content.”
Over 70 TikTok Creators Boycott Amazon as Workers Protest Conditions and Pay
As the company fends off pressure on both fronts, the Amazon Labor Union continues to back election petitions around the country including one filed Tuesday in upstate New York.
Gen Z Goes to War With Amazon
More than 70 big TikTok creators have pledged not to work with Amazon until it gives in to union workers’ demands, including calls for higher pay, safer working conditions, and increased paid time off.
Twenty-year-old TikToker Elise Joshi, who serves as deputy executive director for the advocacy group organizing the boycott, Gen Z for Change, posted an open letter on Twitter Tuesday.
“Dear Amazon.com,” it reads, “We are a coalition of over 70 TikTok creators with a combined following of 51 million people. Today, August 16th, 2022, we are joining together in solidarity with Amazon workers and union organizers through our People Over Prime Pledge.”
Amazon has refused to recognize the Amazon Labor Union (ALU) since workers voted to unionize at a Staten Island warehouse in April, and it has resisted collective bargaining negotiations.
Although the ALU is not involved in the boycott, its co-founder and interim President Chris Smalls expressed support for it in a statement to The Washington Post, saying, “It’s a good fight to take on because Amazon definitely is afraid of how we used TikTok during our campaigns.”
While the ALU posts videos on TikTok to drum up popular support for the labor movement, Amazon has sought to win large influencers over to its side. In 2017, it launched the Amazon Influencer Program, which offered influencers the opportunity to earn revenue by recommending products in personalized Amazon storefronts.
Last May, the company flew over a dozen Instagram, YouTube, and TikTok stars to a luxurious resort in Mexico.
Emily Rayna Shaw, a TikTok creator with 5.4 million followers who has partnered with Amazon in the past, is participating in the boycott.
“I think their method of offering influencers life-changing payouts to make them feel as if they need to work with them while also refusing to pay their workers behind the scenes is extremely wrong,” she told The Post.
“As an influencer, it’s important to choose the right companies to work with,” said Jackie James, a 19-year-old TikTok creator with 3.4 million followers, who told the outlet she will cease doing deals with Amazon until it changes its ways.
The ALU is demanding that Amazon bump its minimum wage to $30 per hour and stop its union-busting activities.
Slogging Through the ‘Suffocating’ Heat
Amazon is also facing challenges from workers themselves, with some walking out this week at its largest air hub in California, where company-branded planes transport packages to warehouses across the country.
They are asking for the base pay rate to be raised from $17 per hour to $22 per hour.
A group organizing the work stoppage under the name Inland Empire Amazon Workers United said in a statement that over 150 workers participated, but Amazon countered that the true number was only 74.
The Warehouse Worker Resource Center counted 900 workers who signed a petition demanding pay raises.
Inland Empire Amazon Workers United has complained about the “suffocating” heat in the facility, saying that temperatures at the San Bernardino airport reached 95 degrees Fahrenheit or higher for 24 days last month.
Amazon spokesperson Paul Flaningan, however, claimed to CNBC that the temperature never surpassed 77 degrees and said the company respects its workers’ right to voice their opinions.
On Tuesday, the ALU backed another warehouse’s decision to file a petition for a union election in upstate New York, roughly 10 miles outside Albany.
The National Labor Relations Board requires signatures from 30% of employees to trigger an election.