I know what you are saying but I think that we are in a brand new paradigm now that will need brand new thinking. Unfortunately it now seems that the world won’t be able to let people out of lockdown for months, unless the radical decision is made to only quarantine the fragile. So this episode is going to be a company killer as well as affecting personal finances if something radical and new is not done, on a once-off Marshall Plan style-basis. I don’t think that a few bank holidays whenever we all get out of COVID house arrest is going to cut it frankly.
If countries elect to keep lockdown strategies going for months then we are likely to see unrest and potentially riots starting first in cities such as Paris and London as there are many people who will not be earning enough from unemployment assistance alone to cover living costs such as rents. People who have lost jobs in great numbers and where there will be no alternative employment in the short to medium term. Most if not all western countries will need new solutions. One of these solutions could be a QE scheme that arrives to everyone, for instance in the form of a basic living wage, funded by QE money that does not have to be paid back. Since few nations would ever be able to pay back this emergency measure. I hope that there are some economists in government/EU circles thinking now about this type of scenario.
I liked the plan where government was going to pay 70% of a person’s pre-Covid19 weekly wages up to €410 per week if a company kept them on with the company being encouraged to top that up but it not being mandatory. If the company then sends everyone home because there’s no work, then that’s essentially a basic living wage scheme of €20k per year. Maybe someone with their own company can explain why so many people were laid off with that scheme in place…were they sole traders without a company structure?
Temporary COVID-19 Wage Support Scheme
RTE reports over 30,000 employers registered for scheme
Probably more that can be done there for people as incomes were on average twice that amount but its a good start and I also don’t know why people earning more than €960 a week net were excluded. A ban on evictions, mortgage payment deferrals are also in play, a ban on utility company disconnections, increased unemployment assistance…all of these should reduce the need for people to be unable to cover living costs in Ireland. If you’re getting €400 a week and can get deferral on your bills, you should be able to eat and drink on that budget.
Maybe the Marshall Plan needed at the end will be to make whole the landlords, banks, utility companies if they cancel the debts but it would be a brave Finance Minister who’d flag that now.