May 27, 2021 - Economy

Mnuchin: We may never know how many jobs PPP loans saved

Illustration of someone stamping a PPP loan application.

Illustration: Sarah Grillo/Axios

Former Treasury Secretary Steven Mnuchin says that we'll never really know how many jobs, or small businesses, were saved by the Paycheck Protection Program.

Why it matters: The SBA claimed last summer that the pandemic-promoted program, which provided forgivable loans to qualifying small businesses, saved 51 million jobs. Some academic studies put the number much lower, including one from MIT that put the figure closer to 3 million.

What they're saying: "In normal times, economic modeling is a great science," Mnuchin tells me, in a new "Axios Re:Cap" episode about the PPP's creation, controversies and legacy. "In this type of situation, where you literally shut down the economy ... I think these things are very, very hard to model."

  • Mnuchin adds that he believes PPP saved "tens of millions of jobs," based on the number of loans, but acknowledges that economists disagree.

Bigger picture: As I wrote Monday, small business owners I spoke with for the podcast series were unanimous with their gushing over PPP.

  • You can hear some of them at the beginning of the Mnuchin episode, including Frank Olivieri of Pat's Famous Steaks in Philadelphia and Dayna Frank of Minneapolis music club First Ave.
  • We're also seeing lots of PPP recipients get acquired, or even go public (usually via SPAC). Mnuchin, who says he made an early decision on "speed versus perfection," says he "never expected" that more financially comfortable businesses would apply for loans, although admits it was legitimate under the program's language.

State of play: The SBA stopped taking most new PPP applications earlier this month, after exhausting the $284 billion reauthorization from late last year. The only exception are applications from community financial institutions, although that too is set to expire at month's end.

The bottom line: Economists will continue to study PPP, in order to better perfect a playbook for future economic crises (pandemic or otherwise). But it's unlikely that there will ever be consensus on exactly how many jobs this bipartisan bill saved.

Go deeper