Monday, March 30, 2020

What If We Nationalized Payroll? Pavlina Tcherneva

As the coronavirus pandemic rages on, the US Congress appropriated a whopping $2 trillion budget to tackle it (about 10% of GDP). The focus was on expanded unemployment benefits and cash assistance to families, as well as grants and loans to small firms and large corporations in hopes that they will halt the torrent of layoffs.
Across the ocean, Denmark took a different approach. The Danish government announced that it would cover 75–90% of certain worker salaries for the next 3 months. However remote the possibility here in the US, it still inspires the question: Could we have followed suit? How shall we think about such a policy?...
Multiplier Effect
What If We Nationalized Payroll?
Pavlina Tcherneva | Assistant Professor of Economics at Bard College, Research Scholar at The Levy Economics Institute, and Senior Research Associate at the Center for Full Employment and Price Stability

See also

Global Inequality
Four types of labor and the epidemic
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Stone Center on Socio-economic Inequality, senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace


Ralph Musgrave said...

I left a comment after the Levy article as follows.

I have doubts about the logic behind having government ensure everyone still gets a high proportion of their previous wage because there’s a distinct lack of anything to spend money on right now, given the large number of businesses and retail outlets that are closed. Making sure everyone has at least the basic necessities is the most important priority for the next few months, isn't it?

Peter Pan said...

Canada is doing this. One benefit may be to encourage businesses to retain their workers, and avoid having to 'rebuild their team' upon recovery.

Matt Franko said...

Businesses will just use this whole thing to get rid of people they do not want anymore...