Small businesses have already cut millions of jobs because the coronavirus crisis forced them to close and they could no longer pay salaries. But an important piece of the $2 billion coronavirus relief bill signed last week—a $350 million “paycheck protection program”—will use government funds to help pay salaries so more people can stay on payrolls, and others can be hired back.
Small businesses fill out a simple application and then can get loans that will be fully forgiven if they’re used to keep employees on payroll or quickly rehire those who have just been laid off. It covers up to eight weeks of payroll costs, including benefits. A smaller part of the loans can also be used to cover the interest on mortgages, rent, and utilities.
According to Elise Gould, an economist at the nonprofit think tank Economic Policy Institute, the program is especially good because it keeps money flowing to employees so they can pay their own bills. On top of that, keeping people employed will only speed recovery once the pandemic comes to a close.
The program is similar to one in Denmark, where the government will partially cover the salaries of workers who would have otherwise been fired, for three months. That the US enacted a program so comparable to Denmark’s is a testament to the progressiveness of this stimulus plan. For those of us at the Optimist Daily, the hope is that we can learn from this in order to create a system where people can get their basic necessities, even (or rather especially) when their job is at risk.
