COVID-19 and the economy - Short-time work benefits are good, but not with a watering can
The corona crisis will likely be with us for some time, so an extension of short-time work is important in many areas, comments Mischa Erhardt. Nevertheless: Short-time working allowances should only flow to where jobs have a realistic future after the crisis.
The current economic data show how hard the pandemic hit the economy: The gross domestic product fell by 9.7 percent. Statisticians have never seen anything like it since 1970, when they began collecting these data. The force that distinguishes this economic crisis from previous ones is due to the fact that it hit all economic sectors at the same time. From the manufacturing and, to a large extent, exporting industry, through trade, to services of all kinds - the pandemic and the associated restrictions have hit all areas of the economy - almost overnight.
Proper government help
That is why it was important and right that the federal government pulled out all the stops to limit the devastating effects of the pandemic as much as possible: Aid for self-employed and micro-entrepreneurs up to billions in loans for large companies or even the state's entry into strategically important Classified companies like Lufthansa - all of this can be criticized in detail, but not in principle. Because nobody can be interested in a massive wave of bankruptcies of actually healthy companies.
A central and nationwide probably the most important help is the massive use of short-time working in companies. It allows companies in such crises that are not their own fault to reduce the working hours of their employees and, with the additional payments from the Federal Employment Agency, to keep wage and social security costs at a tolerable level. In many cases, this gives them the realistic chance of getting over the temporary lull in their order books without having to lay off massive numbers of employees. This effective measure is also perfectly appropriate to the crisis.
Recovery will take time in many industries
And since the crisis is ongoing and will probably be with us for some time, an extension of short-time working is important in many areas. Many restaurateurs, for example, will have to wait a long time for their sales from times before the crisis. Even with tour operators or in the tourism sector, the recovery will foreseeably continue for a long time.
Nevertheless, one should not continue with the watering can, but intensify the tests again. Because while for some companies short-time work is a necessary bridge to get their employees halfway unscathed through the valley of the crisis, there is a danger of dragging along zombie companies. These are candidates whose business model is shaky and not sustainable even without the crisis. To keep these companies alive artificially with the cornucopia of taxpayers' money would be to sink money. Short-time working benefits should only flow to where jobs really have a realistic future after the crisis.
