|Up to 75% of the $800bn PPP went to business owners instead of workers|
The benefits of the landmark small-business relief program designed at the height of the pandemic mostly went to business owners rather than workers, according to a study from authors including famed Massachusetts Institute of Technology economics professor David Autor, as well as several Federal Reserve economists. The research looked into the $800bn Paycheck Protection Program, which ended up sending loans to approximately 93% of small businesses, in just two months. The end result, the authors estimate, is that the program preserved up to 3m “job years” of employment at a cost of between $170,000-$257,000 per job-year retained. Put another way, between 23% to 34% of PPP dollars went directly to workers who otherwise would have lost jobs, the study found. The program also was highly regressive, with three-quarters of PPP funds accruing to the top quintile of households. The study said the primary job retention goal of PPP could be better achieved through expanding “work sharing,” or having employers reduce work hours rather than make layoffs. There are 26 U.S. states with work-sharing programs, though they’re not well subscribed, and the authors say these programs should be simplified and automated.