The Impact of Quarantine on Employment During the Covid-19 Crisis
Various systems have been implemented to support the self-employed. Unemployment pays are provided, provided that some citizens suffer significant income losses. Self-employed people social aid if there is no access to unemployment benefits.
In Italy, more than 2 million self-employed people have so far benefited from a monthly bonus of 600 euros for 5 million non-employee persons.
In France, €2 billion solidarity fund has been set up for small businesses and self-employed people with a turnover of less than 50% or affected by closures in March, April and May. Thus, self-employed workers were able to benefit from a monthly lump sum of 1,500 euros with a simple declaration.
In Germany, a €50 billion emergency aid program (Soforthilfe) has been established specifically to support the self-employed. In Spain, extraordinary assistance was paid to 1.3 million self-employed entrepreneurs and 70% of workers who stopped their jobs.
Self-employed people can often benefit from deferred wages (water, gas and electricity), taxes and social security contributions. They can also benefit from exemption from social security contributions, as in Spain.
Cash flow and loans have been provided to self-employed people through many local banks in European countries. In the United States, the government has also established a special compensation mechanism for people who do not comply with the standard system. (Pandemic unemployment insurance)
During the pandemic, the children’s parents will also be unemployed during the period when schools are closed. Therefore, payment plans have been considered in many countries for them as well.
Various situations are encountered for other salaried jobs. The governments of European countries have delayed the fees that companies can no longer pay. They set up safety nets aimed at protecting jobs and limiting the social cost of the crisis.
In sectors subject to administrative closure, employees can benefit from this mechanism. Here we assume that all partial activity requests directly linked to administrative closures are verified. The acceptance rate of requests for other employees varies by country.
The rates we use are based on both local government data and the national press. This rate is 100% for France. For other countries the rate is lower: 88% in the UK, 83% in Italy, 75% in Germany and 70% in Spain.
These rates are much higher than in past years when the authorities were not so reactive. Based on these assumptions, partial start-up in April represented around 25% of salaried employment in France and Italy and 29% in Spain and the United Kingdom.
Partial activity in Germany accounts for only 13% of salaried employment. It should also be noted that there are employees who are ineligible for partial activity, which explains the lower rates. For example, in the case of the United States, the partial operating system does not exist.
Companies that are denied partial activity requests for their employees or that do not make a claim despite being entitled, they will either have to lay off or provide employment within the company. So, they will have to reduce their margins.
Finally, salaried employment is expected to continue between 0.7% (United Kingdom) and 4.7% (Spain). In France, 500,000 employee contracts in the non-market sector will be preserved.
In the United States, the situation is different. According to the information available for April, continuing salaried jobs could exceed 24 million people. This shows that US companies are accumulating strong labor.
It was the lowest in France and Italy (despite a significant economic shock). 0.9% of total salaried employment is in France and 1.2% in Italy.
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In Germany, the extent of the destruction of salaried jobs is explained by 1.5 million who are not eligible for the program. These represent 4/5 of the 4.4% of salaried jobs lost.
The situation remains more delicate in the United States, as salaried jobs are estimated at 22.4 million, or 14.6% of total salaried employment.
In some European countries, partial unemployment schemes that compensate workers in the event of a temporary reduction in working hours have at least temporarily limited the employment impact of the crisis.
Eligibility requirements are broad for companies. In some countries, a reduction in activity, whatever its size, is a sufficient condition. This is the case in France, Spain, Italy, the United Kingdom or Belgium.
Other countries set a minimum threshold for a decrease in activities or hours worked (Netherlands, Switzerland). Some countries apply a minimum threshold for employees affected by these situations. (10% in Germany, 30% in Denmark)
The eligibility requirements for employees are expanded. Most Social Security employees are eligible for partial unemployment plans, including temporary workers.
Yaşam Ayavefe
