The UK government is facing growing calls to extend the Coronavirus Job Retention Scheme in order to prevent what Labour leader Keir Starmer has described as the “scarring effect” of “mass unemployment” .
Chancellor Riski Sunak has insisted that his “priority” is to find new ways to protect jobs, but the Unite union is warning that the “redundancy floodgates” are set to open as the clock ticks down to the current 31 October end date for the furlough scheme.
With unemployment already at a two-year high, “influential figures including former prime minister Gordon Brown are urging the government to bring in a German or French-style system”, the BBC reports.
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Here’s how the two European nations plus the US have handled the transition:
Germany
First used during the 2008 financial crisis, Germany’s Kurzarbeit (“part-time work”) scheme covers 60% of the net salary of a new claimant - less than Britain’s 80%. However, “the German wage subsidy rises to up to 80% of net salary, or 87% for people with children, depending on how long you have been furloughed”, reports Channel 4 News’ FactCheck.
And unlike the UK scheme, which was initially “based on paying workers to stay at home and do nothing”, the German system “was always about short-time working - allowing employers to reduce employees’ hours while keeping them in a job”, says the BBC.
The money paid to workers by the government then covers the wages they would have earned working those lost hours.
The scheme pays out up to €6,700 (£6,130) per month for employees with children - much higher than the UK’s £2,500 cap - and has been extended until at least the end of 2021.
France
The French equivalent is called chomage partial, or “partial unemployment”. Described by The Telegraph as being “one of the most generous furlough schemes in Europe”, the French government has paid workers up to 70% of their gross salary – roughly equivalent to 84% of net salary – for salaries up to €6,927 (£6,340) gross per month. Workers on minimum wage have got 100% of their net salary.
As with the German version, the French scheme “is designed to subsidise the jobs of people on reduced working hours - and it’s also intended for the long haul”, says the BBC. The scheme has been extended until the end of next year.
US
The Donald Trump administration has taken a less hands-on approach to supporting employees put on furlough.
Back in March, the president signed a $2.2trn relief bill that was intended “to soften the financial impact that the coronavirus had on the US economy” and that included a one-off $1,200 (£925) payout to most adults, with $500 (£385) per dependent child, says CNet.
In addition, the “typical unemployed American” received about $930 (£715) a week from the state between late March and late July, with the payments then cut to about $330 (£250), adds The Washington Post.
House Democrats have also called for a second round of stimulus checks worth up to $6,000 (£4,625) per family - a proposal that Republicans have yet to act on.
