Mar 26, 2020 - Economy & Business

Why corporate welfare is distasteful, but necessary

Illustration: Sarah Grillo/Axios

It can be distasteful to see government bailout funds going to companies that have harmed workers, evaded taxes, degraded the environment and enriched their executives with socially useless financial engineering. But it's still necessary.

Why it matters: Vacations work in capitalist countries because employees remain on the payroll throughout and can seamlessly rejoin their employer upon their return. As millions of Americans embark on an involuntary vacation, the same principle applies.

What they're saying: It is always preferable to redeploy workers rather than lay them off. That's a key lesson we can learn from the Chinese experience of weathering the crisis, as Boston Consulting Group's chief economist Philipp Carlsson-Szlezak told Axios' Bethany Allen-Ebrahimian.

The bottom line: Giving laid-off Americans generous unemployment checks is necessary and humane — but it's always second-best to keeping them employed in the first place. It's much more economically efficient for the government to pay companies to keep workers employed than it is to pay workers only after they've been fired.

  • Unless people remain in their jobs, even if they can't produce much right now, America will lose billions or even trillions of dollars' worth of institutional knowledge and organizational capital.

Go deeper: How the coronavirus stimulus bill helps you

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The workers feeding America

Illustration: Sarah Grillo/Axios

As worried shoppers buy in bulk, stress is mounting for retailers, warehouses and farms — which need more labor at the very time people are being told to stay at home.

Why it matters: America isn't running out of food. But there's increasing strain on the supply chain as the workers who produce and deliver our groceries are sheltering at home, quarantined or are (justifiably) too spooked to show up for work.

Senators threaten to delay coronavirus relief bill with last-minute objections

Sens. Tim Scott, Ben Sasse, Lindsey Graham and Rick Scott. Photo: Alex Edelman/AFP via Getty Images

The prospect of the Senate quickly passing the $2 trillion coronavirus relief deal that congressional leaders struck with the White House hit a speed bump Wednesday after a group of Republican senators demanded an amendment related to unemployment insurance.

The state of play: Republican Sens. Lindsey Graham (S.C.), Tim Scott (S.C.), Ben Sasse (Neb.) and Rick Scott (Fla.) said Wednesday that they would object to fast-tracking the bill over a provision that would grant an extra $600 per week in unemployment benefits to low-wage workers who lose their jobs.

Go deeperArrowUpdated Mar 25, 2020 - Politics & Policy

The coronavirus pandemic is hitting Main Street

Illustration: Aïda Amer/Axios

America is grinding to a near halt to slow the spread of the coronavirus outbreak. It's wreaking unprecedented havoc on the restaurant and retail industries — and their millions of workers.

Why it matters: Amid all the discussion about how the pandemic is roiling Wall Street, its most acute impact is being felt on Main Streets around the country.