The Paycheck Protection Program is a recent monetary policy designed to support the United States economy and alleviate workforce sustenance issues by providing loans to small and medium entrepreneurs to cover payroll and non-payroll costs. Unfortunately, according to an article by Michael Derby, published on October 20th, 2021, President Neel Kashkari of the Minneapolis Federal Bank Reserve suggested that the policy has worsened wealth inequality between white and Black Americans. The following analysis briefly describes the content of the article and its implications.
The coronavirus pandemic has halted most business activities and alleviated economic pressure because of disrupted supply chains. As a result, the US government has taken several initiatives, such as introducing policies like the Paycheck Protection Program to solve some of these issues. Unfortunately, the Federal Bank Reserve president of Minneapolis suggests that the approach benefits wealthy white individuals more than minorities such as the black communities. According to the article, Kashkari revealed that white business owners have a favorable relationship with banks, allowing them to benefit from the program’s design (Derby). Therefore, the policy does not address its purpose because it is inclined to provide loans to individuals with limited financial records issues.
Monetary policies in America often focus on improving the livelihood of all citizens, especially those living in marginalized communities. Unfortunately, policymakers often ignore crucial gaps that limit others from enjoying benefits during the policies’ design. On the other hand, better-off individuals can quickly obtain funds according to the policy standards, thus introducing discrimination along racial lines. However, it is crucial to consider the current situation of individuals, especially during the Covid 19 pandemic, to help design policies that will address core issues. As a result, President Kashkari suggested revisiting the case to ensure approaches address the problems intended by limiting setbacks.
Work Cited
Derby, Michael. “Fed’s Kashkari: Paycheck Protection Program Disadvantaged Black Americans.” WSJ, 2021.