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Old 03-23-2020, 11:50 PM
cmosdes is offline
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Join Date: Mar 2002
Posts: 2,055
Quote:
Originally Posted by RickJay View Post
$1200 a person won't motivate a company to keep you employed, either. You can't create jobs by handing money to companies. They have no reason to hire people because they get handouts; if it made sense to lay off X employees they will keep doing that even if you give them a bag of money. (Why wouldn't they?) You can try to base the bailout money on them keeping a certain number of employees, but such deals are complex and rarely end up saving jobs. You're also creating, of course, a gigantic moral hazard. No supporter of free markets and capitalism should support that.

Giving money directly to the individuals inevitably means that money will be spent on... stuff. The companies that provide that stuff will be rewarded for running effective businesses, and THEY will employ people.
If a company feels they have a viable and profitable business in the right market and under normal circumstances, they likely will do whatever they can to hang on until the market place reopens. Restaurants that were thriving before all this likely feel they can continue to thrive, for example, once the lock down is lifted. But if they are broke, what choice do they have but to let people go? They can only go into so much debt. Banks won't lend them anything right now. And if they have to fire people, they'd need to rehire in another couple of months, which is a huge hassle. Better to try to keep employees around until this passes. So the incentive they have to hand that money to employees is that once things reopen they can hit the ground running and not need to rehire, retrain and start all over.