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US and Euro workforce affected differently, but comparing apples and oranges will prove fruitless

As Congress votes to add almost $500 billion to small business relief, most European workers continue to receive a portion of their paychecks despite being unemployed (https://www.npr.org/2020/04/23/838085670/europes-economy-was-hit-hard-too-but-jobs-didn-t-disappear-like-in-the-u-s). As it currently stands over 26 million US citizens are unemployed with numbers steadily increasing daily. Unemployment funds are largely used up and states are looking to the federal government to bail them out. While additional federal money is on its way, many businesses have already closed for good.


Meanwhile European countries have been able to support a large portion of their workforce even though many have been laid off or furloughed. In the United Kingdom 80% of laid off workers are receiving payments of up to $3,000 a month from the government. UK residents are also receiving health coverage thanks to the National Health Service. In Germany the Kurzarbeit System allows for 12 months salary for laid off workers.


The differences between the US and European countries may seem staggering but the explanation is simple. While European countries are able to provide substantially more relief support, they also function on a distinctly different government model. Most European countries favor centralized and socialized governments, with the state providing a large portion of support for individuals and businesses. However, citizens are required to pay higher taxes and often make lower wages than the average American. This is more feasible in European countries because they are smaller in population and size.


Comparing European and American systems is unrealistic and counter productive. While many may call for the US to adopt European practices, especially moving forward, it would require a massive overhaul and would receive significant backlash. Even if the US attempted to make this change it would prove difficult considering the decentralized nature of the US government and the sheer size of the population, not to mention the culture change required. Whether this change can or will be made is yet to be seen, but in the meantime the US must find a way to support its unemployed, either by continuing to increase government spending or by risking returning to work.

Image Credit: Alex Kraus/Bloomberg via Getty Images

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