Associated Press A woman walks on empty tram rails in Lyon, central France. (AP Photo/Laurent Cipriani)

The coronavirus is inflicting severe damage on global economies, and working-class citizens are among the most at risk from being laid off from shuttered businesses.

In Europe, governments in Denmark, the Netherlands, and the UK moved to pay workers to stay at home and do nothing in an attempt to salvage their battered economies.

In Denmark, the government is promising to pay up to 90% of a worker’s salary to private businesses as long as the worker is not laid off.

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Millions of Americans are projected to file for unemployment benefits as the coronavirus pandemic shutters businesses, leading to massive layoffs. Many economists say the US is almost certainly in a recession already.

But the havoc it’s wreaking on global economies threatens to inflict severe pain on the working class in particular, The New York Times reported. Businesses around the world have closed their doors in an effort to curb the virus’s spread. Nations are also sealing off their borders and ordering millions of citizens to stay at their homes.

The crisis is highlighting differing attitudes toward how governments should strengthen the safety net for the most vulnerable people. In Europe, one idea is catching on in the fight against the coronavirus: Pay workers to stay home and do nothing.



Read more: The ‘trade of the century’: 2 hedge fund managers break down a simple investing strategy built to profit from wreckage caused by coronavirus



The calculation among governments in Denmark, the Netherlands, and the UK appears to be that its better to pay up and keep people on payrolls than risk economic disruption from mass layoffs. It’s an approach that could be comparable to freezing economies in place and letting them thaw at the end of the pandemic.

In the US, most of the attention among lawmakers has been squarely focused on boosting unemployment benefits and expanding eligibility for people to receive them. The $US2 trillion stimulus bill in Congress includes provisions to increase payments to the jobless by $US600 per week, as well as send $US1,200 checks to Americans earning less than $US75,000, according to NBC News.

Here are more details surrounding the plans now underway in the three European nations mentioned above.

Denmark is covering up to 90% of workers’ wages for employers — as long as they’re not laid off.

Jacob Gronholt-Pedersen/Reuters Denmark.

The Danish government announced last week it was moving to pay private firms 75% to 90% of their workers’ salaries – up to 26,000 Danish kroner, or around $US4,000 a month for each worker – to prevent huge layoffs.

Under the plan, the government would also cover sick leave and compensate businesses for fixed expenditures like rent. It’s slated to end in June.

“The philosophy here is that the government wants companies to preserve their relationship with their workers,” Danish economist Flemming Larsen told the Atlantic. “It’s going to be harder to have a strong recovery if companies have to spend time hiring back workers that have been fired.”

Denmark could spend as much as 13% of its gross domestic product to finance the ambitious plan.

Peter Hummelgaard, the nation’s Employment Minister, said the government was attempting to address the economic pain of its average citizens with the radical measure.

“This is very different from 12 years ago when, as you might say in American terms, we bailed out Wall Street and forgot about Main Street,” Hummelgaard told the magazine. “This time around, it’s about preserving Main Street as much as we can.”

The Netherlands is also paying up to 90% of workers’ wages in an effort to prevent huge job losses.

maydays/Getty Images Amsterdam.

Under the plan outlined by the Dutch government, a company losing at least 20% of its revenue can apply for emergency government aid.

The government would then provide the company with the funding to cover their employees’ wages for the next three months.

The approach is very similar to the one undertaken by Denmark.

The UK government said it will pay the wages of workers for the first time in its history.

The UK government unveiled a new plan recently to pay up to 80% of a worker’s salary, covering up to £2,500 a month, the BBC reported.

“For the first time in our history, the government is going to step in and pay people’s wages,” chancellor Rishi Sunak said on Friday.

British officials said the policy could be retroactively applied, meaning business owners could rehire workers who had been laid off due to coronavirus – and grant them a leave of absence instead.

Sunak said the “unprecedented” measures will last for three months, but they could be extended if necessary.

In addition to the wage program, the British government has also given free cash grants to small businesses and deferred income-tax payments for six months.

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