America has given full unemployment plus extra money, plus free money. How is that different from privatizing payroll?

Why is an 'employment guarantee' any better than what is happening in most of America -- layoffs with an explicit promise to rehire once the business is allowed to operate? It's not like paying companies to keep people on payroll in jobs that are not producing economic value really reduces unemployment anymore than not testing for coronavirus makes it go away.

I don't know why americans are so afraid of 'mass unemployment'. Most businesses will survive this crisis, due to debt suspensions or new debt at a very low rate or via direct government aid (which the government has so far provided plentifully, and will likely do more). Businesses have promised to rehire. However, a business that cannot right now provide a job that has value to the business ought to lay off people and let the social safety net take care.

The articles make some good points regarding healthcare, but aside from that, it makes no good argument why unemployment + the unemployment insurance that workers have paid into for exactly this scenario is worse than paying businesses to keep people on payroll who wouldn't be there otherwise.

> Why is an 'employment guarantee' any better than what is happening in most of America -- layoffs with an explicit promise to rehire once the business is allowed to operate?

Unless those promises are binding (they aren't), then they're worthless. A lot of people who have been laid off because of coronavirus will discover in the coming months that their job is actually gone, because businesses will be conservative and not rehire as many people as they had prior to entering the throes of the recession. Also, not all businesses will return to employment at the same time, so there's going to be massive turnover as people who were out of a job for awhile change employers and take the first job that becomes available, not necessarily the job that they already had.

And keep in mind, the layoffs Americans are facing now are real. They're losing their benefits, their health insurance, their vacation days. There's a real friction in both firing and hiring someone and we'll be paying it on both sides.

All told we're going to be seeing massive disruption in the US labor market, which would've been avoided had everyone just had a temporary government-paid furlough while maintaining their job and benefits.

Employment guarantees may include benefits (FMLA/Healthcare), which you definitely will not have with unemployment. The American system of tying healthcare to employment is showing it's huge weakness right now - when Americans need healthcare the most, they lose it.

"Rehiring" can also be slow because it forces employers HR departments to screen candidates all over again. If employees stay on the payroll, they can all report back to work once the crisis has passed. Instead, businesses that survive have to spend their first weeks "hiring" back employees if they can, instead of making profits. This delay will hurt the recovery further.

The POV that there will be some idealistic point in the future where companies call all of their employees back is absurd. There might be some chance of this happening, but it's not large. And the times we're wrong then we're very wrong.

This isn't going to be unpaused. The economy will be spun back up gradually for everyone's safety. People will likely still be getting sick. Some at-risk people may not be able to safely re-enter the workforce for a long time.

What’s the rationale for hiring when economic circumstances don’t locally justify it? Is it charity? You want businesses to engage in idiosyncratic, ad hoc charity as part of the national strategy? Then just tax them and make it Not idiosyncratic or whimsical.

This is an economic shock unlike what any current unemployment infrastructure in the US is designed for. What we want, as much as possible, is a total economic pause. Paying companies to keep their employees on payroll would come closer to accomplishing that than mass layoffs. With mass layoffs, there is no un-pause. We will start out in the middle of a depression.

A depression in which everyone is going to be rehired the moment business is allowed to operate? Of course there's an un-pause. Companies know who they fired. They'll just call people up and rehire.

They likely won't be rehired; some of those business will not exist. Some companies will not try to hire everyone back. And with so many people out of work, there will be less economic activity, period. If the government had funded companies to keep their employees on payroll, we could have an un-pause scenario. We are unlikely to have that after the mass layoffs. The economy is a system, and will be in a state with much less employment and money flowing.

Yeah, it'll take time to ramp up, but it'll ramp up.

Not nearly as fast as if everyone simply kept the job they already had, and go back to it immediately upon things open back up.

sum_{n=1}^{\infty} (1/2)^n approaches 1, eventually.

Rather than waiting for an infinite time horizon and theoretical rampup, the better approach would be to build a bridge for a bit.

This isn't going to happen outside of rare cases. Lots of companies are not just laying people off, they've folded entirely. People I personally know work for companies that have closed shop entirely in recent weeks. Those jobs are gone.

Of course, plenty of companies will not bankrupt, but of those that don't, they aren't going to be expanding their payroll anytime soon after the stock market just took an absolute pummeling and removed years of economic gain in days.

The market is currently being propped up by the federal reserve providing unlimited quantitative easing at the cost of inflation, not a long term solution. Even if we gave everyone a cure and vaccine tomorrow, we are on shaky ground because of what the fed has been doing, for better or worse, and will be in a recession for years.

>I don't know why americans are so afraid of 'mass unemployment'.

In the United States, health insurance is provided by your employer. To purchase it without their leverage is prohibitively expensive without a sizable, reliable income.

Yes, I agree about the health insurance. Government should pay COBRA or figure something out. But why that system needs to involve paying businesses to nominally keep people on payroll (and thus provide health insurance) is what I'm missing. Why is that better than government directly replacing the salary and health insurance? Why should businesses have to deal with the administrative cost of a government decision

We can freeze the economy, or allow it to form a cocoon like a caterpillar.

Freezing the economy would be paying businesses to pay for overhead and labor. This would ensure everyone's job is frozen in place while furloughed.

What we have instead done is try and form a cocoon like a caterpillar does. If you don't know about how a caterpillar becomes a moth, well it basically just dissolves completely into goop in that cocoon and forms an entire new animal out of that goop. We are allowing the economic structure to dissolve into goop while paying everyone to keep alive while at home inside the cocoon. However, since we've eliminated the structure, what emerges will not look the same. It will be much smaller as capital moved to safer investments. People will not be able to get their old jobs right away, if at all. They might have to change fields. It is going to suck and a lot of people will end up set back in their lives and careers as a result.

becauae we would provide other monies to the business of it can rapidly reopen. I’m sure a business will be happy to take on the overhead if it includes gov support for rent, etc.

The approach of keeping people employed with their current employer sees value in maintaining the existing arrangements of employers and employees during the period of suppressed economic activity. Therefore it's a more socialist perspective, viewing a large part of economic value as derived from the common social fabric, and not just the capital of the business. The forgivable small business loan parts of the CARES act seem to be somewhat modeled on this concept.

The approach of firing idled staff and just having them collect unemployment doesn't value the preservation of the employer-employee relationships, and assumes that if they are broken up, they will all re-emerge naturally if necessary after the lockdowns are over. This is a more libertarian approach - no guarantees to employees (but still not totally as it still involves government backed unemployment insurance programs).

>There's not enough pressure on politicians in both parties to ensure a solid and fast as possible recovery.

Oh I disagree, I think there is plenty. Every politician knows that incumbents are more likely to lose in a down economy. That's why they just passed an unprecedented stimulus bill

This isn't stimulus. It's temporary economic relief that doesn't continue for as long as needed. A bandaid at best.

You also can't stimulate an economy that's paused.

This bill was stripped down compared to what European countries are providing because of a lot of vocal politicians worrying about creating disincentives to work which is such an unfathomably stupid thing to worry about during a pandemic.