State Loan Program Could Prompt Unemployed To Re-Enter Workforce
Offering a bridge-loan program to Florida residents is one way the state can improve on federal missteps in providing coronavirus relief, said , Ph.D., an assistant professor of economics in 澳门六合彩历史记录鈥檚 .
While the U.S. government has made loans to small business and cut checks to households, the response is insufficient, expensive, and, in some cases, counterproductive, according to Luther. He proposes that Florida offer zero-interest loans of up to $5,000 to the state鈥檚 21.5 million residents. Even if full loan amounts were made to everyone eligible and the state had to borrow at 3 percent, the interest expense to the state would be just $1.31 million, or about $305 per person. More likely, the cost would be much lower.
鈥淭hat鈥檚 a very small price to pay to provide much-needed financial security,鈥 Luther said. 鈥淭he bridge-loan program鈥檚 virtues are its simplicity and low cost. We don鈥檛 have to figure out what each person needs 鈥 and good thing, because we aren鈥檛 very good at that. Bridge-loan borrowers can direct the funds at whatever their particular needs are.鈥
Florida Gov. Ron DeSantis offered similar bridge loans for small businesses beginning in March, though new applications no longer are accepted. A state-level loan program for residents would avoid some of the major pitfalls of the federal approach.
In boosting unemployment benefits by $600 a week through July, for example, the federal government discourages employees from returning to work before then. When added to Florida鈥檚 minimum unemployment benefit, the Congressional increase is equivalent to a聽$15.80-an-hour minimum wage for a 40-hour-a-week worker. Florida鈥檚 minimum wage is just $8.56.聽
鈥淚f it pays more to stay at home than to return to work, few people will return to work,鈥 Luther said. 鈥淭hat鈥檚 not because they are lazy. They care about their families. The federal policy forces you to choose between doing what鈥檚 best for your family 鈥 earning more money 鈥 and returning to work. A well-designed, state-level program might encourage some of these workers to return to work when it is safe to do so.鈥
Florida鈥檚 unemployment benefits website has been overwhelmed by hundreds of thousands of applications in recent weeks, with frustrated workers complaining that they haven鈥檛 been able to file for relief. DeSantis moved to fix the problem, tapping聽Department of Management Services Secretary Jonathan Satter to oversee the jobless benefits聽system. The Department of Economic Opportunity says it is working to address concerns and聽offer checks more quickly to residents.
The troubles with Florida鈥檚 unemployment benefits website cut both ways, according to Luther.
鈥淥n the one hand, it means many who need assistance aren鈥檛 getting it. That鈥檚 a problem,鈥 he said. 鈥淥n the other hand, it means there is little disincentive to return to work when it is safe to do so. Ideally, the state would provide the much-needed assistance without discouraging productivity. A bridge-loan program is one way to do that.鈥
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