Jobs with the unemployment rate hitting 16% the highest on record Friday’s upcoming report will capture the full impact of the coronavirus lockdowns that began in mid-March.
Unemployment numbers continuing to rise, we see that every week with the benefits and the US economy are falling further into a recession, which could get worse.
The Paycheck Protection Program for many people works not as effective as expected, such as the 75/25 rule. 75% of the loan has to go to employees so that the employees get compensated, leaving only 25% of that loan to pay for things like rent and business expenses. Lots of businesses feel that that’s too tight and stringent.
In fact, a lot of restaurants are not going to be able to stay open. They’re going to go bankrupt probably. And people with businesses like design or retail, who were using the grant for stock, not staff. They were shocked about the fact that there’s no forgiveness because it makes no sense to them to use so much for staff unless they have something to sell.
However, the US Labor Secretary Eugene Scalia is very optimistic about the economy despite all of these fears.
“These reports reflect ten million Americans who are out of work right now, and that’s difficult, it’s painful, and the President has done all he can and continues to do all he can to try to address that. At the same time, we got to this point by a completely different route than in past economic downturns.
The public health measures are now gradually and thoughtfully being lifted, which give me the reason for confidence in a rebound. Some companies will not be able to get to that rebound. I think the President and the Congress have taken measures to try to keep those jobs in place.
If we consider the PPP, the United States Department of Labor tries to keep those businesses afloat but also keep workers tied to the business. So as we reopen and as we’re doing now, those workers have a job.
This program was meant to help workers in substantial part. It won’t be all things to all people. The Treasury and the Feds have other programs that are also available to help small businesses. Secretary Mnuchin will continue to evaluate the program and operate it as best he can, but keeping workers on payroll was a fundamental goal of that program.
We had an extraordinary, unprecedented economy just weeks ago. We lost that economy because of public health measures. If we pursue this policy, I truly believe that we can get back, recognizing that the reports we see right now about unemployment are difficult.”