COVID-19

PPP boosted employment through early June, study finds

Justin Ho Jul 23, 2020
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With the coronavirus closing many businesses, the Paycheck Protection Program saved millions of jobs that would have been lost, according to MIT research. Justin Sullivan/Getty Images
COVID-19

PPP boosted employment through early June, study finds

Justin Ho Jul 23, 2020
With the coronavirus closing many businesses, the Paycheck Protection Program saved millions of jobs that would have been lost, according to MIT research. Justin Sullivan/Getty Images
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There’s a new study out this week that found the forgivable PPP loans out there added as many as 3.2 million jobs through the first week of June.

However, it is way too early to tell whether the jobs saved by the Paycheck Protection Program are here to stay.

“We don’t know if those jobs will persist. If that allows businesses to remain viable that otherwise would have gone under, or if those jobs are going to fade away the minute PPP ends,” said MIT’s David Autor, who authored the study.

Autor said the findings suggest the government was successful in getting money into the hands of businesses and the employees whose jobs were saved.

“So even if you conclude that the PPP had no long-term effect on employment, you would not say the money was just, you know, thrown down a hole. It was distributed to citizens,” he said.

The thing is, businesses that received PPP loans employed roughly 50 million people before the crisis, said Ernie Tedeschi, an economist at Evercore ISI.

The fact that the program only saved 2 or 3 million jobs, so far “suggests to me that the PPP went to a lot of businesses who otherwise didn’t need the money,” he said.

The paper also found that the cost of the jobs saved amounted to roughly $224,000 per job. Tedeschi said that is high but not surprising, given how fast the program rolled out.

Overall, he said, the study can help policymakers improve future aid programs.

“We can see that the next time we want to do small business aid, we should probably target it better than the way we did in the PPP,” he said.

MIT’s Autor said we’ll continue to learn more about how the program has boosted employment as businesses report their payroll numbers in the months ahead.

COVID-19 Economy FAQs

What’s going on with extra COVID-19 unemployment benefits?

The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.

What’s the latest on evictions?

For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.

Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?

Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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