The coronavirus pandemic may be global in scale, but its material impact on ordinary workers thus far has varied widely from one country to another — as has the relief offered by national governments when it comes to the lost wages and potential layoffs. As the New York Times observed earlier this week:
In a Queens apartment, a laid-off busboy has no idea if he will make next month’s rent or feed his family. An out-of-work waitress in Amsterdam, though, can count on the government to cover 90 percent of her wages. As a Malaysian florist anxiously burns through her savings, cafe owners in Brussels receive about $4,300 to make up for lost revenue.
With many workplaces shut down and normal economic activity grinding to a halt, the threat of mass layoffs and unprecedented unemployment across the globe cannot be overstated. From factories to restaurants, from offices to day-care centers, regular working rhythms are being disrupted, and ordinary workers are staying at home to slow the virus’s spread — raising the possibility that companies will simply cut their employees off to fend for themselves.
Without their regular wages, many will soon find it impossible to pay the rent, afford their groceries, or purchase necessary medical supplies — raising the further possibility of human suffering on an unprecedented scale if sweeping measures are not taken in the coming days and weeks. The macroeconomic impacts could also be severe. People without wages are, after all, also unable to stimulate demand by way of consumption, meaning an economic downturn is liable to cascade quickly in the event of large-scale layoffs.
Recognizing exactly that possibility, many national governments — even some led by right-wing and traditionally market-zealous politicians — are taking action.
Rishi Sunak, chancellor in the UK’s right-wing Conservative administration, recently announced that the government will pay grants totaling as much as 80 percent of workers’ salaries if companies retain rather than lay them off — with payments capped at as much as £2,500 per month. In similar fashion, Denmark’s Social Democratic–led government last week struck a deal with employers and unions designed to avert mass layoffs by way of state subsidies covering 75 percent of workers’ wages (employers will be responsible for covering the remaining 25 percent). Applying to companies with fifty employees or more, or who would otherwise lay off at least 30 percent of their staff, the plan will at the very least extend security to many Danish workers and prevent outright economic catastrophe. Holland, meanwhile, plans to pay up to 90 percent of wages for companies most affected by the pandemic, with supplementary measures being taken to protect restaurants. In South Korea, the government’s employee-retention program covers at least 70 percent of wages and was recently expanded so that more businesses are now eligible.
Many of the plans are far from perfect, leaving out workers in especially vulnerable or precarious positions. Britain’s just-announced measures, for example, do nothing for some two million low earners not entitled to statutory sick pay or the huge numbers of people who are self-employed. Even social-democratic Denmark’s sweeping deal between state, unions, and employers leaves out many precarious workers (such as those on zero-hour contracts).
Nonetheless, such measures go far beyond anything currently on the books in the United States, where a workforce already far less secure than its European equivalents and lacking a strong social safety net to fall back on is facing the possibility of a crisis far exceeding that of 2008 in its severity. Unemployment claims in the United States are already off the charts, with the anticipated figures being so ominous the Trump administration recently tried to get states to delay their release.
As Congress offers corporate America a massive and larcenous bailout with even fewer strings attached than its 2008 equivalent, American workers facing looming layoffs are still waiting. While representatives Mark Pocan (who chairs the Democratic Party’s Progressive Caucus) and Rosa DeLauro are championing legislation similar in strategy and aim to that put in place across parts of Europe and Asia, it remains unclear how much support it will get from the majority leadership in the House led by Nancy Pelosi — and is almost certain to be fought tooth and nail by Republicans in the Senate. There, Bernie Sanders has been pursuing measures designed to encourage companies to keep workers on the payroll, having successfully fought to protect unemployment checks for the poorest Americans in Congress’s massive coronavirus spending package earlier this week (significantly, Sanders has also pushed an expansion of unemployment insurance that includes “those who depend on tips, gig workers, domestic workers, freelancers, and independent contractors”).
With a record 3.3 million Americans filing for unemployment last week alone, failure to protect workers’ wages will all but guarantee an even more drastic spike in layoffs — the human cost of which is almost impossible to fathom. Means-tested cash transfers, such as those found in the recent stimulus bill, are inadequate and will do nothing to prevent even more people from losing their jobs. With billions in funds being doled out to industry after industry, it’s abundantly clear whose interests matter most in the American legislative process. But American workers desperately need a bailout of their own — and they need it now more than ever.