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Business FRIDAY, MARCH 21, 2014

Small business unfazed by paid sick time NEW YORK: As more cities mandate paid sick days for workers, the reaction from many small businesses is a big, so what? New York City and two New Jersey cities, Jersey City and Newark, are the latest to require employers to give workers paid time off when they’re ill or to care for sick relatives. San Francisco, Seattle, Washington, DC, Portland, Ore. and Connecticut already had sick leave laws. Similar legislation elsewhere has been a bust because of opposition from business groups and some public officials. In Philadelphia, for instance, Mayor Michael Nutter has vetoed sick leave bills twice saying they threaten jobs and make the city less attractive to new business. The Greater Philadelphia Chamber of Commerce also lobbied against the laws because of worries that businesses would flee. And the National Federation of Independent Business says when you add government-mandated sick leave to the minimum wage increases that are happening in some states, it equals rising labor costs for small businesses. But preliminary research shows the laws

have little, if any, downside for profits. And many small businesses say they don’t find complying with the laws a burden. Many already gave employees paid sick time before the laws were passed. And having paid sick time makes employees happy. “If you’re sick and can’t make it into work, it gives you security,” says Leonardo Lima, who works for an electronics repair shop in New York. He was getting paid sick leave before the law was passed. Research in Connecticut, whose sick leave law went into effect in 2012, shows a minimal financial effect. A report released this month by the Center for Economic and Policy Research and the City University of New York’s Murphy Institute said many of the Connecticut businesses already had paid sick leave. Nearly 47 percent of 251 companies surveyed said the law hadn’t affected costs. Only 6.5 percent said costs rose 5 percent or more. And 60 percent said keeping records was somewhat or very easy. The think tank’s research tends to support paid time off for workers, including family and medical leave. — AP

Startup scene flourishes in US capital WASHINGTON: In a large warehouse-type office, software coders work on apps, as “angel” investors and mentors help budding entrepreneurs figure out strategy for their startups. This technology “incubator” called 1776 in downtown Washington has some 200 startup firms, and many more seeking to get in to the collaborative workspace which provides desks, connectivity, technical assistance and importantly, connections for those with a dream or a mobile app. A few years ago, the notion of Silicon Valley on the Potomac might have evoked ridicule. But the capital city in recent years has become home to thousands of entrepreneurs and a tech ecosystem supporting them. “The ingredients we need for startups are right in our backyard,” says Donna Harris, co-founder of 1776, which opened last April and quickly filled up. With 15,000 square feet (1,400 square meters) in the downtown K Street corridor, 1776 accepts about half those applying for membership in the tech incubator. “It’s not just capital that people need. They need connections,” Harris said. By some measures, the District of Columbia has a startup scene which is bursting at the seams. A survey last year by Fast Company magazine found the district had a higher number of venture-funded startups per capita than any of the 50 US states. PriceWaterhouseCoopers ranked the city in the top 10 for business investment in the fourth quarter, with more than half of the $300 million going into software and IT services. Startup scene ‘vibrant’ “The startup scene in DC is vibrant, it’s growing,” says Christopher Etesse, chief executive of FlatWorld Knowledge, a startup for digital textbooks and online educational services, which has grown to 32 people in the 1776 offices and is now preparing to move into its own offices. Etesse says Washington “has some of the best universities and deep technical talent,” and notes that “we’re able to attract that talent but we don’t have as much competition as New York City or Silicon Valley.” Mrim Boutla relocated to Washington from Indiana and moved into the 1776 for her e-learning and job placement startup saying the city “has both the nonprofit, the profit and government sectors that can interact and intersect in social innovation.” She said the shared workspace puts her in contact with “a great fellowship of changemakers” and “helps me stay energized in the lonely journey of being an entrepreneur.” — AFP

NEW YORK: In this file photo, activists hold signs during a rally at New York’s City Hall to call for immediate action on paid sick days legislation in light of the continued spread of the flu. — AP

Mine strike hits the micro, macro in S African economy Losses set to mount after strike ends RUSTENBURG: As South Africa’s biggest post-apartheid mine strike marks its eighth week yesterday, it is already denting growth and export earnings, and many of those affected are having to sell their most prized possessions to make ends meet. In an informal bar near the platinum belt city of Rustenburg, striking miner Oupa Majodina holds up his cell phone to show a photo of his pride and joy: his cattle. “I own 11, but I will have to sell some of them. What can I do? I need the cash,” he said glumly. No talks are scheduled between the two sides to the strike, the Association of Mineworkers and Construction Union (AMCU) and the world’s top platinum producers, Anglo American Platinum , Impala Platinum and Lonmin, and they remain poles apart on the issue of wages. That means the misery will only spread, making an even bigger headache for President Jacob Zuma and the ruling African National Congress on the run-in to May 7 general elections. The strike has hit about 40 percent of global production of the precious metal, which is used for catalytic converters in vehicles and is a key source of hard currency for South Africa. The companies have lost revenues of 9.2 billion rand ($850 million) and counting, according to an industry website that updates the losses like a Doomsday clock. “You will need to take that 9 billion rand out of the current account because it is almost all from exports,” said Mike Schussler, who runs economics consultancy economists.co.za. This current account deficit is already a key weakness in South Africa’s economy, putting its rand currency under pressure. It grew in 2013 to 5.8 percent of gross domestic product, its widest since 2008. A wave of violent, wildcat strikes that erupted periodically in 2012, rooted in a turf war between AMCU and the

National Union of Mineworkers, cost platinum and gold producers over 16 billion rand that year, when the current account gap was 5.2 percent of GDP. With no resolution in sight, the cost of the present strike may exceed that, and the losses will continue to mount after it is over, as operations will take a long time to get back to full production. Job losses and shaft closures look highly likely. Terrible timing For the current account, the losses will be magnified as South Africa’s government embarks on a spending binge for big ticket items such as over 1,000 trains that will be imported from foreign companies like General Electric. “There will be huge pressure on the current account from the government’s infrastructure program. So this strike could hardly come at a worse time,” said Schussler. The impact on growth will also be significant. Africa’s largest economy is seen expanding at a sluggish pace of only around 2.5 percent per year, according to the latest Reuters poll of economists. “Roughly speaking, if you look at our GDP, which is 3.6 trillion rand, then that 9 billion rand is about a quarter of a percent off economic growth already,” said Schussler. Perhaps half a percent had been lost already, he added, if the 4 billion rand in lost employee wages and the effect on companies that supply and service the mines are added. “This means growth of 2 percent or lower,” Schussler said. Even operations not on strike, such as Aquarius Platinum’s, have not been able to capitalize on their rivals’ misfortunes as the strike has not had much impact on price. Spot platinum prices are little changed since the strikes began on Jan. 23 as traders bet that the availability of

above-ground stocks will cushion endusers from the impact. Cattle and caravans The lost wages have been felt immediately in the communities along the platinum belt northwest of Johannesburg. Patrick Tlou, 48, the owner of the Phomolong Tavern, where Majodina and a few other men were sitting in a circle on plastic chairs, said his trade was suffering. “Business is very down. It’s because of the strike. Many of my customers have gone home,” he said. Home for most miners is the villages they hail from in places such as Eastern Cape province, hundreds of miles away. This is where Majodina keeps his cattle. After sending money home for years to his family, he will now have to draw on his cows and kin to see him through the strike. “On April 1, I will go to the local Shoprite store and get 300 rand that my mother will send me out of her pension cheque. But normally I send money home,” he said. As for his cattle, it’s a buyer’s market as desperation sets in among miners, many of whom own livestock back in their rural homesteads. “If I say I want 6,000 rand for this animal, someone will say I only have 4,000 rand, and I will have to take it.” Elsewhere in Rustenburg, Ig Bronkhorst, owner of Campworld, which sells caravans and camping gear, said his business was also badly affected, though his typical client would be in a higher income bracket than the striking AMCU members, who are at the bottom of the mine wage scale. “My business is down at least 30 percent since the strike started. It goes wider than the guys working on the mine. It is also the contractors and the suppliers for the mines, and many of them are my customers,” he said. “People are bringing back caravans to sell because they need money,” he said. — Reuters

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