Covid-19’s Economic Pain Is Universal. But Relief? Depends on Where You Live. – The New York Times


What distinguishes the United States from other countries “is not the nature of the bailouts. It’s the underlying structure,” said Carol Graham, a senior fellow at the Brookings Institution who studies safety nets. “People are more vulnerable from the get-go, even in normal times. You throw a shock like this at the system? It’s about as bad as it could get.”

American workers face extra anxiety over medical costs. The United States, unlike most of the developed world, does not guarantee health care.

While countries like Denmark have famously robust safety nets, even the Conservative government in Britain has, after years of austerity, adopted a similar approach. “For the first time in our history, the government is going to step in and pay people’s wages,” the British chancellor of the Exchequer, Rishi Sunak, said last week. The plan, which is still being developed, will pay up to about $2,900 a month to workers who have lost hours but are not laid off.

The center-right government in Germany will spend more than $40 billion to help small businesses cover basic needs to stay afloat during the crisis. That is in addition to a program aimed at larger companies, called “kurzarbeit,” or “short-time working,” that covers lost wages for employees who are sent home, to avoid laying them off. Economists expect about two million workers to receive aid under the program, more than during the financial crisis a decade ago.

“We have a security net, and people don’t fall below the security net,” said Dierk Hirschel, the chief economist of ver.di, one of Germany’s largest trade unions. “But people are going to lose income, and in a traumatic way.”

The German development bank, KfW, has promised an all-but-unlimited supply of business loans. “There will be no upper limits for the amount of credit that the KfW can give out,” Peter Altmaier, the minister of the economy, said.

Even with the rush to save jobs, uncertainty remains. Britain’s plan may come too late for workers who have already been laid off. If they cannot find jobs soon, they will most likely fall into the nation’s welfare system, which can pay as little as $300 a month. “I do not know where to go from here,” said Delphine Thomas, 20, who was laid off from a movie theater in Liverpool.

South Korea’s employee-retention program covers 70 percent of wages or more, and the government recently loosened the rules to make more businesses eligible. But part-time workers, contractors and the self-employed receive fewer protections. Some may be eligible for one-time cash payments. Labor advocates want those workers to have the same benefits as full-time employees.

Business owners, too, face uneven support depending on the country. Elias Calcoen and his partner opened a cafe in Brussels eight months ago. It has been closed for more than a week, but the city’s government is offering small businesses immediate $4,300 payments, plus $1,300 a month in federal aid for displaced self-employed workers.

“We have no kids, we are in good health and the Belgian government is not leaving us by ourselves,” Mr. Calcoen said. “There are many people who are in a much worse position.”

This content was originally published here.


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