measures taken to fight the pandemic have forced temporary business Firms are allowed to use Kurzarbeit only when working time accounts are exhausted, which helps contain fiscal
Working in Germany during a pandemic. contraction in GDP (of almost six percentage points), owing mainly to a economy than the global financial crisis.

million, or about 20 percent of the labor force—a much greater number than their “working time accounts”. April, the number of workers who applied for Kurzarbeit exceeded 10 the 4th to 6th months, and further to 80 percent from As serious as these issues might be, they pale in comparison to the kind of mass unemployment the US is currently experiencing, and investing in the retention of highly qualified workers now may prop up some failing industries, but it will also help others to stay competitive through an unprecedented global crisis. Last modified on Tue 18 Aug 2020 23.37 EDT. This seems not to have been the case during the global financial crisis of 2008, when Kurzarbeit was largely credited with softening the blow to Germany’s labour market. save on a precautionary basis. The Frankfurter Allgemeine Zeitung warned in 2019 that the German auto industry, which was already struggling with a bad export market prior to the pandemic, should not be propped up with Kurzarbeit indefinitely. security contributions—can be relaxed during a serious crisis to discourage

He added: “Businesses and employees need a clear signal from the government: we’ve got your back for the long haul in this crisis, so that no one is being let go without need.”. And companies retain firm-specific human as running down working-time accounts and accumulated leave balances). balance between providing relief during deep recessions, while not expanded to temporary workers (about two percent of total employment). the population. The same system was largely adapted by West Germany after the war, and it helped to soften unemployment during recessions in 1967, 1975, and 1983.

Therefore, several changes to Kurzarbeit’s The finance minister, Olaf Scholz, first proposed extending the benefit programme, which is currently limited to claims lasting a maximum of 12 months, on Sunday.

But he said it was not sustainable, and that most other countries were making similar moves to wind down their schemes. government normally provides an income “replacement rate” of 60 percent

Remarkably, this was the case despite a large Yet there are substantial concerns that the scheme could help prop up companies, or even entire industries, that should properly be contracting. These can then be drawn down during

This was the case during the global financial crisis and it is happening again capital, while avoiding the costly process of separation, re-hiring, and Alongside Zoom, Netflix and Amazon, Germanophilia has to be counted as one of the prime victors of the pandemic that has so thoroughly remade the world this year. Germany is expected to extend its pandemic furlough scheme to 24 months after Angela Merkel indicated that she welcomed the proposal to let the Kurzarbeit programme run on. The replacement rate, starting at In a deep While the economic output of Europe’s powerhouse suffered a 10% slump in the second quarter of 2020, the furlough scheme has so far largely absorbed the accompanying shock on the labour market. In contrast, the confinement During the coronavirus crisis, Merkel’s coalition government decided to increase payments: after four months on the scheme, recipients receive about 70% of lost earnings, and about 80% after seven months, if they have lost more than 50% of their working hours. However, the profound impact of this crisis on the labor market cannot be sectors and across different types of jobs.
In the US, by comparison, unemployment temporarily rose to a record 14.7% in April.

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