But if they're not still in business, it gets added to their bankruptcy, and the workers are still out of pocket.
Thats a fair point
but at the same time if the workers are getting helicopter money directly they do not have to go back to work and the small business goes under anyway
There are a LOT of other issues with the program Mac, not the least of which is it's already being abused. Hedge fund managers with few employees are leveraging applications as "small businesses" to build cash reserves. Large franchises negotiated a loophole, so that their independent owned stores are classed as small businesses. This enables franchise fees to continue to flow to the head office coffers as monthly "franchise fees" which form part of their store operators fixed expenses.
The program is supposed to be helping small businesses stay afloat, not enhancing the profits of some of the most profitable companies in America. That's why money which flows directly to the PEOPLE is the most necessary use of funds right now.
Here is a difference scenario: My 28 year old son-in-law owns a small roofing business with 5 full time employees. He started this business 4 years ago, with nothing, not even a truck, and profits to date have been poured back into buying two trucks, and three work trailers, including a portable machine and metal shop in a covered trailer. The virus hit just as his work season was starting, and his cash resources from last season were all but exhausted. His expenses run $16,000 per week during the season, of which approximately $6000 is payroll, and $6000 is materials. This amount is always in his bank account.
My son-in-law laid off his employees. They will immediately receive $500 per week in unemployment insurance benefits from the government. This frees my SIL to use his $16,000 "float" to pay his equipment loans, his insurance, his rent, and other expenses for two months. When he gets work (emergency work for now), he has purchased face shields, masks and gloves for his workers. If they return to work part time, because it's slow, he will pay them for the weeks they work, but they will continue to receive EI for the weeks they don't work.
My SIL is not getting direct help from the government for now, but he is because his guys are being paid, and he doesn't have to worry about them not being there. Where else are they going to go? He'll continue to get help in that his guys will get help if business is slow and he doesn't have enough to keep them busy full time. Trudeau hasn't come out with a lot of specific programs for businesses yet, but he says that he will be doing that but the people come first.
It's a different approach, but less prone to abuse and it gets the money to the people first.
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