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deniscollins · 4 years

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European Workers Draw Paychecks. American Workers Scrounge for Food.

The pandemic has ravaged Europeans and Americans alike, but the economic pain has played out in starkly different fashion. The United States has relied on a significant expansion of unemployment insurance, cushioning the blow for tens of millions of people who have lost their jobs, with the assumption that they will be swiftly rehired once normality returns. European countries — among them Denmark, Ireland, Britain, France, the Netherlands, Spain and Austria — have prevented joblessness by effectively nationalizing payrolls, heavily subsidizing wages and enabling paychecks to continue uninterrupted. If you were a public policy maker, which system would you advocate: (1) U.S. expansion of unemployment benefits or (2) European governments heavily subsidizing wages and enabling paychecks to continue uninterrupted? Why? What are the ethics underlying your decision?

In the southeast corner of Ireland, Brian Byrne’s event-planning business was confronting a calamity. It was the middle of March, and the coronavirus pandemic was nearing peak lethality. As the government barred gatherings like music festivals, his revenue disappeared, forcing him to consider laying off his four full-time workers.

But a swiftly arranged government program spared their jobs. It provided 70 to 85 percent of their wages, enabling Mr. Byrne to keep them employed.

“It oddly hasn’t been a stressful time,” he said. “I can keep the team together, keep them motivated. We’re basically doing everything we can to be ready for when the restrictions are eased.”

Across the Atlantic in New York, the pandemic cost Salvador Dominguez his job selling Manhattan real estate. He eventually qualified for an emergency expansion of federal unemployment benefits, but not before 72 agonizing days of waiting. He borrowed from friends and family members to pay his rent, and he harvested food from the trash at a high-end grocery store.

“How can I describe it?” said Mr. Dominguez, 39, taking a breath. “It was very tough.” He added, “I didn’t feel alone, because I knew a lot of people like me were doing it.”

As cases increase at an alarming rate in much of the United States, the reliance on an overwhelmed unemployment system — the next infusion of money perpetually subject to the whims of Washington — leaves Americans uniquely exposed to a deepening crisis of joblessness. Europe appears poised to spring back from the catastrophe faster, whenever commerce resumes, because its companies need not rehire workers.

“You just send an email, and that’s it — you’re ready to go,” said Jonathan Rothwell, principal economist at Gallup, the American polling firm, and a nonresident senior fellow at the Brookings Institution. “There’s no recruitment or negotiation.”

Some have argued that the differing approaches are functionally equivalent. European taxpayers are writing checks to employers who wind up paying workers. American taxpayers are furnishing relief through unemployment payments.

“I think it’s a real open question,” said Jason Furman, an economic adviser to President Barack Obama, “which of those will be better in the long term. They might be more similar than everyone thinks.” He was speaking during a recent discussion with Stephanie Flanders of Bloomberg.

But conversations with recipients of government relief in Europe and the United States reveal one substantial difference: In many European countries, wage subsidies have enabled paychecks to continue without a hitch, sparing people the anxiety of managing bills while awaiting relief. For Americans, hellish tangles with bureaucracy have become legion as tens of millions of people have deluged the unemployment system, crashing websites, tying up phone systems and standing in parking lots for hours outside benefits offices.

Far from an accident, this reflects the values animating American capitalism, in which social safety nets are minimal, leaving people to struggle with scant relief. The pandemic “exposes the fact that we have a system problem,” said Joseph Stiglitz, the Nobel laureate economist. “A system where 50 percent of the people are on the edge is not a resilient system.”

The American Paycheck Protection Program has similarities to Europe’s wage subsidy programs. It has directed $520 billion in loans through private banks to small businesses. If American employers limit layoffs, they do not have to repay the money. Five million businesses have received funding, but bewildering rules and technical glitches have limited broader participation.

Washington also increased standard unemployment benefits by $600 a week, often giving recipients more than they earned in their jobs. But in requiring that workers transition from payrolls to the unemployment system, the government effectively consigned people to torturous delays.

Jobless data reveals how the pandemic has assailed American workers with exceptional force. The unemployment rate in the United States has soared nearly eight percentage points since February — it registered 11.1 percent in June — while France, Germany, Ireland and the Netherlands have all limited increases in the jobless rate to less than one percentage point.

“By and large, the European social model has proved quite adept and robust for this kind of crisis,” said Jacob F. Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington.

None of this offers guarantees about the future. In many countries, the United States included, pandemic aid programs are set to expire in coming months. Given persistent fears about the virus, an abrupt elimination of relief would be damaging.

In Britain, nine million workers have officially been furloughed while continuing to draw paychecks under a government program. But as many as a fourth are at risk of being fired when the government reduces the subsidy in September, according to Bloomberg. In the United States, extra jobless benefits expire at the end of July, prompting worries that the removal of this aid will spell a loss of spending, further damaging businesses and producing another spike in unemployment.

For Americans, the risks are heightened by the fact that the nation lacks a national medical system — a feature taken as a given in Europe — leaving most people reliant on their jobs for access to health care.

For now, European programs are insulating workers from the consequences.

In Spain, the terrifying spread of the virus prompted the government to order a halt to nonessential services in mid-March. That threatened the livelihood of Ana Ascaso, a mother of three who works as a waitress at a popular bar in the center of Zaragoza, a city of 700,000 people in the northeast of the country. Her husband had been out of work for more than a year.

Within hours of announcing the state of alarm, the Spanish government also approved an “act of God” wage subsidy program. Ms. Ascaso and the other eight employees at the bar would technically be furloughed — their jobs awaiting their return — while the government paid 70 percent of their wages.

“It was very sad seeing the rising death rate, but I felt lucky that the only thing I had to worry about was my health and the health of my loved ones,” she said.

The bar where Ms. Ascaso works reopened late last month. The tables are set farther apart than before. She wears a mask as she serves drinks and tapas.

“For me, the wage subsidy was a gift,” she said.

Isabel Santander, who has long worked in a Zaragoza factory that makes automobile dashboards, endured a two-month delay for her government-furnished wage subsidy. But her bank advanced the money while she waited.

“I was able to feel relaxed at home,” she said. She spent time with her two daughters. Her company plans to resume production in early July, bringing back all 200 employees.

In Ireland, the wage subsidy approach has not merely prevented workers from falling into arrears. It has also maintained their sense of cohesion.

Ian Redmond operates several nightclubs and bars in Dublin, employing over 100 people. He opened a tiki bar in January, right before the pandemic, assembling a team skilled in the art of cocktails. The wage subsidy program has spared him from having to start over.

“The government has been very proactive,” he said.

As Mr. Byrne, who runs the events, looks ahead to a new era of music performances and comedy shows with smaller crowds and social distancing, his employees have been able to carry on with their lives. One of his workers had been in the process of buying a house.

“If she was unemployed, she would have had a lot of difficulty getting a mortgage,” Mr. Byrne said. She was approved, and the sale is going ahead — presumably setting up future business for carpenters, electricians and a range of other services sustained by homeowners drawing paychecks.

The Irish government sought to protect jobs in two rapid bursts. First, in mid-March, it unleashed payments of 350 euros ($395) to all who were out of work, regardless of their earnings. Then, it followed up with the wage subsidy plan, agreeing to cover up to €410 in pay per week at companies whose revenues dropped by at least 25 percent.

“These two schemes,” Mr. Byrne said, “they have really kept the country open.”

The American approach, by contrast, has barraged the unemployment system with people in dire straits, exceeding its capacity to deliver.

Normally, Mr. Dominguez, the Manhattan real estate agent, would not have been eligible for unemployment, because he was a contract worker. But the pandemic prompted Congress to make benefits available to freelancers and self-employed workers.

When he initially applied, he was told that he had to be rejected for state benefits before he could qualify for the federal benefits — a cumbersome, time-consuming requirement.

After New York petitioned the federal government to change the rules, Mr. Dominguez applied again through the website and was told he would hear back within 72 hours.

Days turned into weeks and then months as his bills mounted. He dialed every state number he could find to plead his case. He joined Facebook groups with other jobless workers awaiting relief. He contacted his political representatives.

He did receive a $1,200 stimulus check from the federal government, supplementing that money with borrowed funds to cover the $2,800-a-month rent on his one-bedroom apartment.

He signed up for distribution at a food pantry. Then, a friend tipped him off to what passed for a gold mine in such times: Citarella, a famously expensive purveyor of fresh seafood and other gustatory treasure, tossed out expired food daily. He began stopping by the store after closing time, rooting through the trash for nourishing discards.

More than 10 weeks after he applied for unemployment benefits, Mr. Dominguez received word that he had qualified.

He was still awaiting his first check — $170 in state benefits, plus the $600 in expanded federal relief. And the money was effectively spent: He had to pay back what he had borrowed.

#Subsidies

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giveuselife-blog · 8 years

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Introduction To Special Finance And Dealership

New Post has been published on https://giveuselife.org/introduction-to-special-finance-and-dealership/

Introduction To Special Finance And Dealership

Have you had problem snoozing currently? Been looking any “trash Tv” or overdue night infomercials? Then, truly, you’ve got been inundated with “Awful Credit score Mania”. It looks like each time you turn your Television on, there’s somebody telling you that, no matter how Terrible your Credit can be, you can get accredited for a mortgage, with no cash down, for that beautiful excessive-line import sports activities vehicle, or how approximately that lovely luxury SUV. And payments which can be so low, you infrequently have made them. Just come on in and they will send you domestic within the dream car of your choice without a problem.

In case you’re a vehicle provider or supervisor, you surprise how humans can actually consider all this nonsense. No money down financing for Terrible Credit customers is Just every other delusion. But the dealership down the street is continuously flooded with ups, while your guys stand round consuming your espresso and littering your used car lot with their cigarette butts. Meanwhile, that different dealership appears to be busy all day and night time…Why they nevertheless have united states on the lot whilst you’re on the brink of close.

If this seems like your dealership, then you definitely in all likelihood in no way heard of Unique Finance. Maybe you’ve got, however, you have also heard all of the horror stories that go with it. The “scuzzy “clients, their trashed alternate-ins, Horrific down charge exams, and all the lies they inform to try to get approved for a loan. And the banks, oh the banks you have to address for these people. They take forever to fund a deal if certainly the deal gets funded at all. seems like the best guy to make any cash on those offers is your “repo-man,” if he can locate those humans and get your vehicle returned! Why could each person of their right thoughts want to issue themselves to this type of aggravation?

however what if I could show you that, via ignoring those clients, you effectively eliminate up to 1/2 the clients inside a 30-mile radius of your dealership. Imagine that over 50% of the human beings dwelling round your dealership suddenly p.C. up and circulate in a single day. might you actually have built it there within the first region? likely no longer, however since you’re already there, why might you even think about with the exception of these folks from your dealership? Opposite to what you would possibly think, this factor of the business can be both worthwhile and smooth, and those clients show themselves over and over to be a number of your maximum loyal clients ever. They regard you and your dealership as a pal who helped them out during a few hard instances and will refer buddies and own family with exquisite vigor, particularly those within the same occasions. They will provider their motors at your provider branch and could take advantage of your body shop if you have one. They’ll come lower back time and again and will continue to do commercial enterprise together with your dealership for as long as you’ll allow them to. They’re with out the doubt the excellent word of mouth advertising you can get!

So, who is your save inside the grand scheme of dealerships? Do you openly include sub-top customers, and make this business your principal goal? Do your humans run for cover while a Special finance purchaser hits the lot, knowing that your F&I branch has no hobby in these customers. Do you dabble at the outskirts of Special finance, doing handiest those offers which require little effort?

Research suggests that, on the subject of Sub-prime or Special Financing (SFI), dealerships historically fall into on of 4 classes. We love to name it “The Dealership 4 Rectangular”:

The Formidable Dealership is Just that. He’s known as the Special finance king. All his advertising and marketing dollars cross in the direction of the subprime marketplace, and you may quite properly surmise that all of us using considered one of his automobiles likely has a Credit trouble. The dealership caters to sub-high business, and as such, true Credit clients can be reluctant to head there. If a 750 beacon walks within the door, he in all likelihood made an incorrect turn!

The Enthusiastic Dealership is willing to do Special Finance, however, is normally not ready There may be no pro-energetic advertising for Unique Finance, as a consequence the constrained enterprise is generated from, lot traffic,” Get ME Dones” and number one F&I flip downs. The F& I Turndowns are traditional when the Sales Desk has a sturdy deal on an automobile and is brought to the customer at the Income Desk’s “Good enough to identify”. these deals have been shopped to every primary lender and not using a success. It’s far at this point (often two days later) that the Special Finance manager receives the deal and is left with the challenge of salvaging a deal that turned into never treated well from the beginning. these stores see the capability for sub-high, however, can not parent out how the shop down the road can deliver all their turn downs. They tend to take handiest the clean offers, and those that require a few work normally get let out after the initial spherical of rejections.

The Vital Dealership does Special Finance, but not consciously. The F&I supervisor is aware of something approximately sub-top and might get a deal approved with a few effort. His pay plan typically does now not compensate him sub-prime, so he will pay little interest to it. His mind-set regarding Unique finance is that these clients don’t deserve a mortgage, however, whilst he receives them accepted, he’s excellent! This dealership is concerned with the picture that Sub high can conjure up. This dealership is not interested in the being called a “Sub top dealer”, and does now not want to jeopardize his modern-day customer relationships. This supplier is only interested by Subprime if it can be done with best the banker knowing!

The Unwilling Dealership has no preference to be inside the sub-high commercial enterprise. This store is commonly one of the top dealerships in the market, promoting masses of vehicles a month. maximum of his financing goes via his captive source, and that they have a tendency to shop for so deep, lots of what could be considered sub-prime at every other store get completed as primary on this shop. Control’s philosophy regarding sub-prime is that it is genuinely no longer well worth the headaches, and the few more offers a month do no longer make up for the previous nightmares that this shop might also have skilled.

What category does your dealership fall into?

DOES MY DEALERSHIP Want A Unique FINANCE department?

You may already be within the Special Finance enterprise and do not even know it. In case your F&I branch is that top, you don’t pay attention a whole lot of complaining approximately the deal that couldn’t get bought. at the same time as it is fairly not going that your workforce closes every patron that walks to your lot, odds are which you are in all likelihood promoting some of those sub-high customers to your primary sources. but we live in an international of maximums and extremely good sizes, so why no longer have both on those offers?

We know that over 50% of the populace surrounding your dealership has a few form of Credit score impairment. Why could you want to exclude that many capacity consumers out of your dealership? Even In case you’re a mega-provider doing masses of gadgets a month, would not it’s great to have any other 25 to 50 Sales on top of what you’re already doing? Understand that we are not talking approximately abandoning the commercial enterprise you have already got, however expanding it.

Don’t forget, Special finance clients aren’t Simply the ones who sit down home and watch Jerry Springer all day, trying to determine out wherein they are able to coins their subsequent welfare or unemployment take a look at. They’ll be medical doctors or attorneys or some other expert who have Just had a bit of Bad good fortune. As the pronouncing goes, “Terrible things show up to properly people.” these clients want to do enterprise with an expert, no longer a few fly-by-night operation they skip along the manner. Moreover, those customers will offer extra enterprise for your components, provider, and frame store. And the referral enterprise they can carry may be nicely well worth it within the long run.

Recollect, whilst anyone else is pronouncing how Horrific business is, the fine of the clients coming into your dealership hasn’t modified, it is the instances those humans face this is one of a kind

1.The subprime loan disaster affects your subprime clients the most!. lots of them are “victims” of those subprime mortgage loans and are unsure of what their mortgage charge might be whilst their rate is going up! 2.those equal people that have been banking on the equity of their domestic continuing to upward thrust and lots of took out equity strains or 2d mortgages and now do not have the fairness left to support those loans. three.The housing marketplace is down, and some of the individuals who paintings in it are feeling the ache. The development worker, wood-worker, framer, electrician, plumber, and many others. All had been driving excessive whilst the new housing market turned into in full swing. Now, many of them, if They are nevertheless employed, have long gone from 70-eighty hour weeks making massive extra time to forty or fewer hours per week without an extra time. Income is manner off, so many of them don’t have down bills available.

Remind yourself that now’s whilst you can truely shine. maximum finance guys could walk far from this market as it’s too hard to do the business. do not be certainly one of them.

Geoff Cohen is a pro auto expert, with over 30 years revel in. He has done it all, from Sales rep to F&I supervisor, New vehicle manager, Used vehicle supervisor, up to GSM and GM. He has also labored as a place Income supervisor for a major sub-top lender in addition to run his personal BHPH and vehicle Leasing/Brokerage employer. he is the Countrywide Bills manager for auto Lending Community and is a contributing creator to several blogs approximately Unique Finance answers for vehicle sellers as well as F&I Magazine and world of Unique Finance Magazine

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