- The corona virus is seriously damaging the global economy, and working class citizens are most at risk of being fired by closed companies.
- In Europe, governments in Denmark, the Netherlands and the UK paid workers to stay home and do nothing to save their troubled economies.
- In Denmark, the government promises to pay up to 90% of an employee's salary to private companies as long as the worker is not laid off.
- You can find more stories on the Business Insider homepage.
Millions of Americans are forecast to apply for unemployment benefits as the coronavirus pandemic companies close shutters, resulting in massive layoffs. Many economists say that the United States is almost certainly in recession.
But the chaos that the world economy is causing threatens to cause severe pain, particularly to the working class. The New York Times reported. Companies around the world have closed their doors to curb the spread of the virus. The nations are also sealing their borders and ordering millions of citizens to stay in their homes.
The crisis shows different attitudes towards how governments should strengthen the safety net for the most vulnerable. In Europe, an idea prevails in the fight against the corona virus: pay the workers to stay at home and do nothing.
The calculations among governments in Denmark, the Netherlands and the United Kingdom appear to be that it is better to pay people and keep them on the payroll than to risk economic disruption from mass layoffs. This is an approach that could be compared to freezing economies and thawing at the end of the pandemic.
In the United States, much of the legislature's attention has focused on increasing unemployment benefits and extending eligibility to receive benefits. The $ 2 trillion stimulus bill in Congress includes provisions to increase unemployment benefits by $ 600 a week and to send checks of $ 1,200 to Americans less than $ 75,000 Earn dollars. according to NBC News.
Here you can find more details on the plans currently underway in the three European countries listed above.
Denmark covers up to 90% of workers' wages for employers – as long as they are not laid off.
Jacob Gronholt-Pedersen / Reuters
The Danish government announced last week that private companies would pay 75% to 90% of their employees' salaries – up to DKK 26,000 or around $ 4,000 a month for each employee – to prevent large layoffs.
Under the plan, the government would also cover sick leave and compensate companies for fixed expenses such as rent. It is scheduled to end in June.
"The philosophy here is that the government wants companies to maintain their relationship with their workers," said Danish economist Flemming Larsen said the Atlantic. "It will be more difficult to recover strongly when companies have to spend time hiring redundant employees."
Denmark could spend up to 13% of its gross domestic product on financing the ambitious plan.
Peter Hummelgaard, the country's labor minister, said the government had tried to use radical measures to combat the economic pain of its average citizen.
"It is very different from 12 years ago when we saved Wall Street and forgot Main Street, as you might say in American terms," said Hummelgaard told the magazine. "This time it's about keeping Main Street as good as possible."
The Netherlands also pays up to 90% of workers' wages to avoid huge job losses.
Under the plan outlined by the Dutch governmentA company that loses at least 20% of its sales can apply for emergency government aid.
The government would then provide the company with funds to cover its employees' wages for the next three months.
The approach is very similar to that of Denmark.
The British government said it would pay workers' wages for the first time in its history.
Matt Dunham / Pool via REUTERS / File Photo
The UK government recently launched a new plan to pay up to 80% of an employee's salary and to cover up to £ 2,500 a month. The BBC reported. That would be around $ 3,000.
"For the first time in our history, the government will intervene and pay people's wages," said Chancellor Rishi Sunak said on Friday.
British officials said the directive could be applied retrospectively, meaning that business owners could hire workers who had been fired from the corona virus – and could grant them a leave of absence instead.
Sunak said the "unprecedented" measures will take three months, but could be extended if necessary.
In addition to the pay program, the UK government has given small businesses free cash grants and deferred income tax payments for six months.
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