The government should guarantee up to 80% of wages for employees laid-off work as businesses battle against the impact of Covid-19, according to Labour TD Ged Nash who has called for an ‘extraordinary response to extraordinary times’.
Deputy Nash believes Ireland should be following the lead of countries like Denmark, Sweden – and the United Kingdom who announced they would be following suit on Friday – by introducing a temporary wage subsidy scheme which would allow people to remain in their jobs over the duration of the pandemic, which has led businesses across countless sectors to cease or reduce trading and in turn lay-off workers.
“Ireland is already lagging behind, with our fiscal response to the coronavirus paling in comparison to other EU countries,” Nash said, stating that Ireland have committed only 1% of GDP to fighting the crisis, compared to 15% in some other EU countries, such as Germany and France.
Nash says the measures introduced so far are “piecemeal” and pointed towards support for the wage subsidy scheme by bodies such as the Irish Congress of Trade Unions and IBEC.
“This is entirely achievable and such a scheme been proposed by both ICTU and IBEC, the main employer body, he said.
“Extraordinary times require an extraordinary response from Government. We cannot afford to be penny-wise and pound-foolish, as doing so only risks turning a temporary health emergency into a prolonged economic and social crisis which will end up taking years to arrest.”
“A Temporary Wage Subsidy Scheme for Workers – like those introduced in Denmark and Sweden – would save countless jobs while maintaining the full income of workers.”
Eight days ago, Danish Prime Minister Metter Frederiksen announced a 2.6 billion kroner had been set aside to provide supporters for such a scheme, which would see the government pay 75% towards monthly wages of employees who would otherwise be laid off by their employers in the wake of the pandemic outbreak.
The plan does not provide cover for all, however. Self-employed people, for example, do not qualify. The scheme is only available to companies who plan to cut 30% or more jobs from the workforce, or 50 jobs or more. But Nash believes that the approach of the Nordic countries is the way forward to ensure businesses and their employees are safeguarded for the immediate future and beyond.
“After 2008, these countries proved that it’s better to support employment by maintaining the link between workers and their employer during a crisis rather than struggle to create new jobs in the aftermath, as firms won’t have to pay for finding and training new staff.
“Without this support, hundreds of thousands of workers will be forced onto state benefits and will face the added stress and anxiety of unemployment at this already difficult time. Failure to act will only lead to more job losses in the coming days.”
On Friday, UK chancellor Rishi Sunak announced similar measures – saying the British government will pay 80% of salaries for staff who are kept on by their employer throughout the outbreak rather than be made unemployed, covering wages of up to £2,500 a month.
“The Government has only offered piecemeal measures at the initial stage, when they should be doing everything in their power to protect people, their jobs and local businesses,” Nash added.
“The kind of steps we are proposing will keep people in work, protect incomes and human dignity, and support businesses by enabling them to bounce back quickly when this crisis abates thereby avoiding a deep and damaging recession.”
A week ago, the government introduced an Covid-19 Pandemic Emergency Payment, which offers €203 a week to employees and the self-employed who have lost their employment due to the downturn in economic activity caused by the Covid-19 pandemic.