Federal job protection plan needs mid-course correction
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Let’s face it, there is no play book for a worldwide pandemic. With unemployment levels rising to Great Depression levels, the need to act quickly is imperative.

The U.S. government’s major responses were enhanced unemployment benefits and the SBA Paycheck Protection Program (PPP). The latter is a well-motivated effort to curtail layoffs and help businesses survive. But, as we hear from constituents every day, it’s falling well short of its goals, particularly for workers and Main Street businesses. The first-come, first-serve structure of the program — and the fact that banks are favoring their current and biggest customers — has left many businesses without access to the money they need immediately.

What can be done? The short answer is that we must get money to small business owners within the next few weeks or they will be forced to close permanently. There isn’t a silver bullet, but there is an existing Labor Department program — called work-sharing — that could be extremely effective if tweaked and rapidly scaled up.

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The state of Maryland launched it in 1984 (when Sen. Ben CardinBenjamin (Ben) Louis CardinPelosi hopeful COVID-19 relief talks resume 'soon' Congress must finish work on popular conservation bill before time runs out PPP application window closes after coronavirus talks deadlock  MORE was Speaker of the Maryland House). Twenty-six other states have similar programs. They provide employers with an alternative to layoffs when they face an unexpected drop in sales. Business owners divide the available hours among their current employees, and workers receive a partial paycheck and a percentage of unemployment insurance for any lost work time. In the current crises, the CARES Act provides $600 for 40 hours a week, on top of regular unemployment benefits.

The work share program is better than the PPP for three reasons. It is already operating, it is available to for profit and nonprofit employers of any size, and it does not require bank and SBA approvals — the primary reason loans aren’t getting to many who need them.

To make it work for employees and employers, the federal and state government needs to:

  1. Increase the flexibility of the work share program. Give employers the ability to reduce employee hours from between 10 to 99 percent (from the current allowable 10 to 60 percent). This would help employers to retain a larger number of their employees until the economy restarts.
  2. Add a grant provision allowing employers to pay any non-payroll costs. (Just as the PPP does.) This would help them meet their fixed operational costs, which would make the program even more attractive to them.
  3. Roll out a major marketing campaign to rebrand work-share (often thought of as 2 employees sharing a job) to pay-share (the employer and state sharing the pay). The goal of the campaign would be to convince employers that participation in the pay-share program is easier than the PPP program, better for their employees, and that it can provide immediate relief.

To be sure, our recovery will depend on multiple programs, working in concert with each other. Pay-share programs would help a large majority of essential businesses and other employers (those that are still open), many of which are teetering on the brink of closure from reduced sales. Also, pay-share programs rely on state labor departments which are experienced in working with local companies.

As he took office in 1933, Franklin D. Roosevelt said, “The country demands bold persistent experimentation. It is common sense to take a method and try it. If it fails, admit it frankly and try another.” That was good advice then and it is good advice now. Let’s give pay-share programs our best shot.

Hester serves in the Maryland Senate and leads the Senate’s Bipartisan Small Business Work Group. Rosapepe serves in the Maryland Senate and is a member of the legislature’s Joint COVID-19 Oversight Work Group.