12 votes

How Germany saved its workforce from unemployment while spending less per person than the US

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  1. vektor
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    It should probably be noted that Kurzarbeit is basically a flowing continuation of unemployment benefits by other means. If you lose your job, you would otherwise be put on ALG1, a form of...

    It should probably be noted that Kurzarbeit is basically a flowing continuation of unemployment benefits by other means. If you lose your job, you would otherwise be put on ALG1, a form of unemployment benefits that is limited in duration but gives you 60% of your previous pay. Not perfect, and losing your job is certainly a major disruption. But keep in mind that we also have a mandatory notice period of 4 weeks, or more if you've been employed for long. ALG1 will be paid for a year if you've paid (mandatory) unemployment insurance for a while before being laid off.

    So receiving 60% of your wage, paid by the government, is nothing more than them doling your benefits out to the company instead. That way, you avoid the disruption. If there's still some work left for you, you interpolate between 60 and 100% wage, according to how much you still work.

    After you've been unemployed too long for ALG1, you receive ALG2, aka Hartz IV. This one is a lot more controversial and a lot less generous. You get only as much as the govt. considers to be the absolute minimum, and only if you're really in need. They can cut this if you are employable but not employed, or if you have other income or assets.

    I am unsure how Kurzarbeit works wrt. the 1 year limit of ALG1, whether the clock is ticking once you start Kurzarbeit, but I doubt it.

    2 votes