Disir
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- Sep 30, 2011
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Unemployment Is Still Extremely High
Unemployment in Philadelphia is currently at 15 percent, or 99,000 people. Prior to the pandemic, unemployment was around five percent. Is it possible, even likely, that unemployment would be even worse absent the PPP stimulus? Sure. But as reporters have noted, the design of the program was flawed from the start: It initially required recipients to spend the majority of the loan on payroll expenses within a period of eight weeks. But many of the industries hit hardest by the pandemic, like retail, restaurants and the arts, could hardly operate at all during the full-scale shutdown. Many businesses took the loan, barely survived with online business for two months, and then, once the loan ran out, ended up furloughing workers right away. A report in Slate in July noted that the program only boosted employment between two and 4.5 percent, which translates to a government expenditure of $224,000 per job saved. (By comparison, providing $600 per week in unemployment benefits for four months would have only cost $9,600 per person.)
So that’s not great. But arguably, the bigger problem with the PPP is that it helped the wrong industries.
www.phillymag.com
It didn't go far enough in other industries with lawyer offices and dentists taking the biggest chunks. The article points out that:
According to data from Yelp, there were nearly 100,000 permanent business closures nationally from March to September.
This is the report:
controller.phila.gov
That report also notes that zip code differences in those individuals that were able to obtain loans.
Unemployment in Philadelphia is currently at 15 percent, or 99,000 people. Prior to the pandemic, unemployment was around five percent. Is it possible, even likely, that unemployment would be even worse absent the PPP stimulus? Sure. But as reporters have noted, the design of the program was flawed from the start: It initially required recipients to spend the majority of the loan on payroll expenses within a period of eight weeks. But many of the industries hit hardest by the pandemic, like retail, restaurants and the arts, could hardly operate at all during the full-scale shutdown. Many businesses took the loan, barely survived with online business for two months, and then, once the loan ran out, ended up furloughing workers right away. A report in Slate in July noted that the program only boosted employment between two and 4.5 percent, which translates to a government expenditure of $224,000 per job saved. (By comparison, providing $600 per week in unemployment benefits for four months would have only cost $9,600 per person.)
So that’s not great. But arguably, the bigger problem with the PPP is that it helped the wrong industries.
A New Report Shows Precisely How the PPP Program Failed Philly
As Congress and the President spar over a second round of economic stimulus, a look back on where the first round went wrong, courtesy of the City Controller's office.
www.phillymag.com
It didn't go far enough in other industries with lawyer offices and dentists taking the biggest chunks. The article points out that:
According to data from Yelp, there were nearly 100,000 permanent business closures nationally from March to September.
This is the report:
Impacts of COVID-19 Across Philadelphia’s NeighborhoodsPart 4: The Paycheck Protection Program - Office of the Controller
A report on the successes and failures of the federal Paycheck Protection Program in Philadelphia.
controller.phila.gov
That report also notes that zip code differences in those individuals that were able to obtain loans.
