Short-Work Chatter

First, let's explain the German government's program commonly referred to as short-work.  This program allows a company (small or large) to react to economic conditions and reduce their output or hours....WITHOUT laying off employees. 

You as an employee would be brought in and told that for x-amount of time, you are on the short-work list.  A company might put some of their employees on the list.....they might put mostly all of their employees on the list.  You could have a company with 300 employees and for 90 days.....290 are on short-work, with only ten still performing a full work-week.

The general usage is that you'd have the guy come in for one or two shifts per week, and the state mechanism would step in to cover the shortfall (the money that you would have made). 

The term used?  Kurzarbeitergeld or "short-term work money".  It would come from BA (Federal Employment Agency).

The BA folks would pay around 65 percent of the salary.  There's supposed to be a plan in the works to escalate the percent to 80. 

In simple terms, it's enough pay coming in to cover basic bills and little else.  You won't be traveling off on a vacation or buying your dream car in this period of 'cuts', if you are on the short-work list. 

So here's the key thing....the regulation says you can perform this for 12 months....no longer than that.  It wasn't meant to be a long-term resolution.

If you go by the calendar....around April of 2021....everyone would hit the point where it ends.  The general feeling is that most German companies by December, will have a list of employees to lay off, and in the late part of 2020 or first quarter of 2021....those folks would get the notice.

Yes, there's some fear building up that the unemployment rate would jump 5 to 10 percent in a matter of weeks.

So in the N-TV business news today, there's chatter going on in Lower Saxony, by their Premier-President (governor) (Weil) who says it's time to discuss carrying short-time to 24 months....meaning to April of 2022. 

The yearly cost?  Back four months ago, it was figured that around 2.35 million Germans would be on the program for a long period, and it'd be around 10-billion Euro (for one year) to carry this. 

The odds of the program changing?  Well, as you enter 2021....it's an election year, and both the SPD and CDU parties are fearful of what may happen with the economy.  So if I were a betting man, I'd say that short-work will be extended. 

What happens if you get to spring of 2022 and the Covid-19 business is still affecting the economy?  Maybe they'd extend it another 12 months....or maybe just face reality that a bunch of people have sat at home for a long time and gotten a bit frustrated about things in general.