‘We’re Going Down, Down, Down, Down, Down’

April 2020, national

Staggering job losses are not a foregone conclusion. There is still time to fix the federal government’s aid program.


The federal government is struggling to deliver financial aid to faltering employers — and workers are suffering the consequences. Roughly 10 percent of American workers filed for unemployment benefits in the past three weeks, a wave of job losses that has no precedent in modern American history. Millions more are struggling to submit unemployment claims to overwhelmed state agencies. And still more face the loss of their jobs in the coming weeks.

The scale of the economic damage is breathtaking. In one recent poll, more than half of all Americans under the age of 45 said that they had lost their jobs or suffered a loss of hours.

Some businesses may survive the crisis by shedding workers now, but they face long-term costs, too: the loss of trained and experienced workers, the uncertainties of hiring new ones.

The federal government was slow to react to the pandemic. Local officials began ordering businesses to shut down weeks before Congress moved to provide those businesses with the lifeline they so obviously needed. Timely action by itself could have saved millions of jobs.

When Congress did act, it failed to grasp the magnitude of the crisis. The aid bill passed at the end of March allocated $349 billion to support small businesses despite warnings from experts that the government needed to provide two or three times as much money to limit job losses. Already Congress is considering $250 billion more in spending, which still is insufficient.

It’s not too late for Congress to take a different approach to limit the damage. What’s needed is a blank-check promise to provide the money necessary for employers to pay workers.

European nations, including France, Germany and Britain, are fighting mass unemployment by paying companies to hold on to their employees. The government gives money to the companies, which give it to the workers; the workers stay home and get paid.

Senator Josh Hawley, Republican of Missouri, has proposed an American version. Under his plan, the government would pay up to 80 percent of payroll costs for each employee up to the median wage — which the Social Security Administration pegged at $32,828 in 2018.

Mr. Hawley’s whatever-it-takes plan recognizes the immensity of this crisis.

“It’s like, ‘Wow, we’re going down, down, down, down, down.’ Nobody can see the bottom,” he told The Washington Post. “I personally don’t care to find out where the bottom might be!”

Crucially, the money would be distributed by a much larger arm of the government, the Internal Revenue Service. (The program is technically designed as a payroll tax rebate.)

The plan also would provide a bonus for rehiring workers laid off since the crisis began.

And the same aid would be available to larger employers affected by the crisis, too.

The most important shortcoming with Mr. Hawley’s program is that it’s still not big enough. It would provide a maximum of about $500 per week per employee, which is less than the $600 per week in extra unemployment benefits that Congress authorized in March.

Representative Pramila Jayapal, Democrat of Washington, proposed on Friday that the government pay 100 percent of weekly wages for workers making up to $100,000. That’s overly generous. The payment is basically an unemployment check with the added bonus that people will eventually return to the same jobs.

The government doesn’t need to carry workers making $100,000 at their full salaries to get them through the crisis. But it shouldn’t be hard to find a sensible middle ground between the two schemes.

There is clear value in preventing unemployment. The loss of a job is traumatic and, in the United States, it often includes the loss of health insurance, too. When the economy revives, both workers and employers will benefit from resuming their former relationships.