Payment Protection Program

The PPP: Why Are We Shifting the Unemployment Problem?

The PPP: Why Are We Shifting the Unemployment Problem?

In times of hardship, it becomes tempting to shift a problem onto someone else; the legislation that came out of the Covid-19 pandemic demonstrated this exact tendency. In response to the economic disruption caused by Covid-19, Congress passed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The Paycheck Protection Program (“PPP”) is section 1102 of the CARES Act. It aims to provide relief to small businesses in the form of a loan that can be forgiven by spending loan funds on certain types of business expenses. Although the CARES Act provides unemployment benefits, the PPP is also positioned to act as an unemployment office. By heavily emphasizing a business’s requirement to spend on payroll costs to obtain loan forgiveness (no matter the need, or lack thereof, for labor), the government essentially pushes the unemployment problem away from itself, and forces struggling small business owners to deal with it instead.