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True “unemployment” at 60 Million? (Fun with math)

Reuters reported that: “26.5 million Americans have sought unemployment benefits since mid-March…”

The first wave of PPP loans was for $349 billion. The loan amounts were set at 2.5 times a monthly salary and the general guideline is that two months of the 2.5 would be used for payroll. This is payroll designed to keep employees employed that would otherwise be laid off or furloughed. So, let’s do the math. Divide the $349 billion by 2.5 to get the approximation of the total that is going toward a monthly payroll (protecting that payroll) $139,600,000,000. Then let’s guess the average salary of the employee being retained (the forgiveness is capped at $100K annual), and the US BLS reports the average annual earnings to be 49,764. One could make the argument that most employees being retained as a result of the PPP earn less, but for the purposes of this exercise, let’s use $50K. That’s 4,166.67 per month. That means that the PPP was funding businesses to pay for 33,504,000 people. Add that to the 26.5 million who filed for unemployment (many have not yet been able to file successfully), and you end up with 60 Million people who are directly unemployed or essentially funded through small business facilitated “unemployment,” remaining employed via a PPP.

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To be fair, we know that not every business would have laid off its entire staff had it not been funded, and many businesses who were funded should not have received funding at all, but three or four times more businesses who did not receive funding in the first rounds of PPP did need it for payroll support and so one can easily stand by the estimate of the “true” unemployment rate being considerably larger… perhaps 60 million.

60 Million people “unemployed”

Kevin Leehttps://givingforward.org
Kevin Lee is Co-Founder & Executive Chairman of Didit a leading digital-first marketing firm started in 1996, and CEO of the eMarketing Association. He is also the founder and President of GivingForward.org a cause marketing nonprofit. Kevin transformed Didit from an SEO/SEM boutique agency into a full-service digital-first marketing firm through 11 acquisitions. Kevin invents marketing technology solutions across search, social and programmatic, He also launched stand-alone platforms including We-Care ($8+ million for nonprofits via cause-marketing) & PowerProfiles; written 4 books, engaged in 500+speaking engagements, and published 700+ articles. Kevin received his MBA from Yale and lives in Scarsdale with his family.

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