Impact of the coronavirus pandemic on employment and social matters

"Impact of the coronavirus pandemic on employment and social matters" was the title of the online conference jointly organised by AFB (Arbeiter-, Freizeit- und Bildungsverein) on 14 and 15 May 2021. Over 70 participants joined virtually from South Tyrol/Italy, Germany, Austria, Luxembourg and Belgium. The event was held in two languages (German and Italian) and was supported by EZA and the European Union.

The COVID 19 pandemic confirmed the primary role of two fundamental social regulatory mechanisms: the state - conceived as an administrative structure of general interest, on the one hand, and the universal welfare state, on the other. They both proved to be a strong bulwark against the international emergency declared by the World Health Organisation on 30 January 2020. Since mid-March 2020, individual European countries have been providing extensive aid to support companies affected by the COVID 19 outbreak, as well as workers at risk of redundancy and vulnerable population groups.

Governments have not hesitated to take on new debts and have shown flexibility in extending existing crisis management instruments, such as short-time work, or else have introduced need-based transfers to support poor households.

For the future however, new benchmarks are required to measure progress in three key domains, namely the efficiency of the welfare state and the healthcare system; equality between men and women at work and in the division of household responsibilities, and the reduction of growing income disparities.

In 2020 and 2021 the pandemic led to repeated shutdowns of manufacturing facilities and service providers, kindergartens and schools, de facto limiting the free movement of people in many European countries. Activities in the hospitality, tourism, trade, service, leisure and cultural industries came to a temporary standstill. Industrial production, for example in food processing, car manufacturing and other sectors was curtailed, resulting in considerable turnover losses or disruptions in the relevant supply chains. As the wheels of the economy stopped turning in the habitual way, major changes occurred in the routines of training facilities and everyday family life in general.

Short-time work was the key to curbing impending mass unemployment. Temporary subsidies were targeted at companies, unemployed or short-time workers, but also at families and vulnerable groups of the population. Deferred payment was granted for taxes and fees and discounts on instalment payments were introduced for housing costs. The rules for receiving unemployment benefits, entitlement to short-time work and redundancy payments were made more flexible. Any schemes already available to cope with corporate or economic crises were applied generously. In Italy, unlike in other countries, workers have been granted extensive protection against dismissal, which will continue until July 2021.

Where possible, companies in lockdown modified their work organisation to keep the business processes going and introduced telework for permanent employees and other forms of home-based work for temporary or contract workers. Meanwhile, teleworking and teleconferencing have become standard options of organising work. Access to the labour market is often granted by digital platforms: 11 % of EU workers have already used such platforms to provide services.

However, from the workers' perspective, the new set up poses some problems. To start with, national regulations do not apply to internationally established platforms, which are in fact de-regulated; moreover, there is no clear separation between regular employment and (alleged) self-employment. Hence the need for an EU directive to establish an EU-wide standard and harmonise different national regulations. Talks are under away in that respect.

Families were forced to spend weeks at home. This meant that from one day to the next parents, especially mothers, had to start juggling work from home, household chores and children. The lockdown was extremely challenging for parents of young children and single-parent families. Stress factors were, in particular, too small accommodation, low income and too little time available to accomplish all the tasks. Switching to teleworking or homeworking overnight without suitable technical equipment or sufficient space often proved very complicated, as did supporting children's online learning. While inequality between men and women in terms of employment, social security protection, distribution of housework, child-rearing and care tasks was evident also before the pandemic, it grew worse during the COVID crisis and structural reforms are urgently needed to address it.

During the pandemic, policy-makers focused primarily on systemically important sectors. However, although efforts were put into keeping the production and education systems running, the needs of children were not sufficiently considered. Young people suffered from lack of movement and being deprived of their usual environment for learning and social contacts. International studies are now showing that the lockdown has had negative psychosocial effects on children's well-being and development. It is now imperative to restore and offer them a normal routine as soon as possible. Monitoring is required so that appropriate individual psychosocial support and social support can be provided when needed.

Extensive support schemes for families are already a standard feature in countries with well-developed welfare systems. Recognising the family as a building block of society, these countries offer support mechanisms adjusted to the different stages of the family life cycle. Additional periods of paid leave to care for children and relatives in need, payments to families to help them meet essential expenses and subsidies for using care services have been particularly helpful during the pandemic. Families without income were granted financial support from emergency funds, which existed already and were increased or were newly established. This has proven to be crucial in the fight against poverty and an important contribution to strengthening social cohesion. A core pledge of the European welfare state model, the commitment to “leave no one behind”, has been fulfilled as far as budgetary constraints allowed.

Albeit at varying speeds, efficiency and effectiveness, individual countries put together numerous aid packages for companies, workers and families and took on considerable new debt for this purpose. In 2021, the debt ratio of individual countries will rise significantly in relation to GDP, reaching 160% in Italy, 122% in Spain, 70% in Germany, 85% in Austria and 117% in Belgium. Since repaying the debt will take many years, it is strategically important that the individual countries make efficient use of the resources at their disposal.

The EU aid schemes, which are gradually being activated, are necessary to enable countries with weaker economies to recover successfully and to reform their economy and public administration to improve efficiency. Through the SURE programme and the Recovery Plan, the EU has provided over 850 billion euros for the economic recovery. However, as a prerequisite to benefit from the support measures, individual countries must introduce reforms that promote innovation, improve infrastructures and meet the requirements of ecological change set out in the EU Green Deal and in the UN Sustainable Development Goals. The EU explicitly provides for ongoing monitoring of the results (impact assessment).