Cui bono – business or labour? Job retention policies during the COVID-19 pandemic in Europe

Abstract

Europe has been faced with multiple challenges during the COVID-19 pandemic, including the problem of how to secure jobs and earnings. In our comparative analysis, we explore to what degree European welfare states were capable of responding to this crisis by stabilising employment and workers’ incomes. While short-time work was a policy tool already partly used in the 2008/2009 Great Recession, job retention policies were further expanded or newly introduced across Europe in 2020 in the wake of the pandemic. However, cross-national variations persist in the way in which these schemes were designed and implemented across European welfare states, aiming more or less to hoard labour and thereby avoid mass dismissals throughout the employment crisis. We distinguish between business support and labour support logics in explaining the variation in job retention policies across Europe. Our finding is that Continental, Mediterranean and liberal welfare states did more to foster labour hoarding using short-time work than Nordic or Central and Eastern European countries.

Crisis corporatism 2.0? The role of social dialogue in the pandemic crisis in Europe

“…As the pandemic hit, Merkel’s CDU-SPD coalition government did not initiate formal tripartite social dialogue to coordinate its socio-economic policy response. However, informal coordination between ministers and social partners underpinned the consensual decision to implement a rapid extension of short-time work ( Kurzarbeit ) (Weishaupt, 2021: 12; Ebbinghaus and Lehner, 2022). The massive expansion of Kurzarbeit constituted the keystone of the German crisis response, alongside the preservation of liquidity through guaranteed loans to firms, banks and the self-employed.…”

“…The massive expansion of Kurzarbeit constituted the keystone of the German crisis response, alongside the preservation of liquidity through guaranteed loans to firms, banks and the self-employed. In contrast to the Great Recession, access to Kurzarbeit was extended to the service and public sectors, with the state taking over the full labour costs of furloughed workers (Ebbinghaus and Lehner, 2022).…”

Reflections on the COVID moment and life beyond neoliberalism

“…Unions themselves must find ways of recruiting workers in those sectors with poor representation, whether those in small firms, or in insecure jobs and false self-employment, or in comfortable middle-ranking positions that are by no means certain of security in the changing labour market. • • Many governments helped sustain companies and workers through the pandemic with various forms of support (see Ebbinghaus and Lehner, 2022). This can obviously not provide a precedent for economic policy in normal times, but there is sense in the argument that, in a globalised economy, the costs of supporting workers through social insurance and other protections should increasingly be borne by the state and general taxpayer rather than by employers.…”

“…Many governments helped sustain companies and workers through the pandemic with various forms of support (see Ebbinghaus and Lehner, 2022). This can obviously not provide a precedent for economic policy in normal times, but there is sense in the argument that, in a globalised economy, the costs of supporting workers through social insurance and other protections should increasingly be borne by the state and general taxpayer rather than by employers.…”

From one crisis to another: changes in the governance of the Economic and Monetary Union (EMU)

“…In the area of unemployment insurance, the systematisation of short-time work schemes (STW) has been at the core of the European response to avoid an explosion of unemployment and to maintain stability in labour markets (Ebbinghaus and Lehner, 2022). This innovation is an interesting subject of analysis in itself: a national institution that was activated in just a few countries (Germany in particular) during the previous crisis has now become a generalised response.…”