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Germany's short-time work fix offers Europe a crisis model


Reuters


A tried-and-tested German model of sending workers home in exchange for job guarantees during downturns could help the European Union limit the damage from the coronavirus pandemic.


Critics warn that adopting the German practice of short-time work or Kurzarbeit, which helped Europe’s largest economy emerge faster than others from the 2009 recession, may hamper and delay much-needed EU restructuring. Nevertheless, it is being emulated by other countries to combat the downturn as the coronavirus crisis hits Europe. Germany’s IG Metall union has already lowered wage demands for 3.8 million metalworkers and company labour representatives began pushing for Kurzarbeit to help slash wage costs. “The corona pandemic caused us to abandon normal collective wage bargaining and we struck a deal with employers aimed at securing work and income,” said Rudolf Luz, head of operations policy at IG Metall, which has now agreed to forego a pay rise. All the large carmakers in Germany, including VW, Audi, BMW, Mercedes, have applied for short-working in recent weeks. “Thanks to Kurzarbeit we can cut back production without destroying structures. Employees cannot be dismissed, they stay in the organisation and companies immediately have qualified staff once the crisis is over,” IG Metall’s Luz said.


8 April 2020

Reuters

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