The key is that the repayment of these loans can be waived if the firm refrains from laying off their workers

In the same way that we are all „sheltering in place,“ state employment departments – the agencies that administer unemployment benefits in every state – can use STC programs and equip companies to keep their employees in place. Under STCs, firms are able to reduce the hours of a large group of their employees (instead of laying just a few of them off), and employees can partially make up the difference in pay through receiving unemployment benefits. For a state like California that already has a functioning STC program, these STC benefits will be paid entirely by the federal government. This could lead to substantial saving for the state’s finances that will be likely very stretched in other ways.

Even better, the CARES Act also included a substantial subsidy for firms that were impacted visit the site by COVID-19 to help pay their workers‘ wages.Continue reading→