Small business bail-out package favours higher paid over low paid workers

by | Mar 25, 2020 | Despatch

There is a flaw in the Government’s small business bail-out package; it encourages employers to discard the lowest paid workers and keep the more expensive ones. Michael West reports with @13foot7.

The Federal Government’s bail-out package appears to be poorly designed. As the chart below from @13foot7 shows, employers receive more money from government for their more highly paid workers.

For a worker on $15,000 a year or less, no assistance is given. For a worker on more than $50,000, the employer picks up a monthly benefit of $800. The package may be deliberately designed this way but it mitigates against the poorer employees.

As reported here already, the QE package (creating new money in the economy via Quantitative Easing) entails the government divesting its responsibility to hand out money to the banks. The banks are then expected, with this new money, to hand it out to small business. The big challenge for small business however – especially with lockdown – is finding any customers at all. A loan would be furthest from the minds of most employers.

Michael West established to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences.

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