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France Tries Limiting Joblessness to Confront Coronavirus Recession France Tries Limiting Joblessness to Confront Coronavirus Recession
(10 days later)
PARIS — When France started shutting down a few weeks ago as the coronavirus marched relentlessly into the country, Dominique Paul feared disaster. His family’s white-glove catering company, Groupe Butard, halted operations, putting 190 jobs at risk.PARIS — When France started shutting down a few weeks ago as the coronavirus marched relentlessly into the country, Dominique Paul feared disaster. His family’s white-glove catering company, Groupe Butard, halted operations, putting 190 jobs at risk.
Edward Arkwright, the director general of Aéroports de Paris, the Paris airport operator, weighed how to preserve over 140,000 jobs when a freeze on most global airline traffic caused activity to nose-dive 90 percent in a few head-spinning days.Edward Arkwright, the director general of Aéroports de Paris, the Paris airport operator, weighed how to preserve over 140,000 jobs when a freeze on most global airline traffic caused activity to nose-dive 90 percent in a few head-spinning days.
The future of both businesses, and hundreds of thousands more around France, spiraled into uncertainty. Instead of sinking, though, they are being thrown lifelines as the French government deploys a targeted plan aimed at sheltering companies and keeping every worker possible employed.The future of both businesses, and hundreds of thousands more around France, spiraled into uncertainty. Instead of sinking, though, they are being thrown lifelines as the French government deploys a targeted plan aimed at sheltering companies and keeping every worker possible employed.
“We’re using the government’s whole toolbox to get through this crisis,” Mr. Paul said, eyeing the company’s empty Armenonville Pavillon on the edge of Paris, where just weeks ago chefs and waiters served delicacies like scallop carpaccio for glittering events. “Otherwise, we wouldn’t be able to keep up.”“We’re using the government’s whole toolbox to get through this crisis,” Mr. Paul said, eyeing the company’s empty Armenonville Pavillon on the edge of Paris, where just weeks ago chefs and waiters served delicacies like scallop carpaccio for glittering events. “Otherwise, we wouldn’t be able to keep up.”
As the coronavirus wallops the world’s economies, France is rapidly emerging as a test case of whether a country can hasten the recovery from a recession by protecting businesses from going under in the first place, and avoiding mass joblessness.As the coronavirus wallops the world’s economies, France is rapidly emerging as a test case of whether a country can hasten the recovery from a recession by protecting businesses from going under in the first place, and avoiding mass joblessness.
In the United States, the coronavirus has already provoked millions of layoffs. While the $2 trillion rescue package signed by President Trump sends extensive relief to American workers and businesses, France and other European Union countries are deploying a more encompassing state-led approach in the event that the epidemic takes months, rather than weeks, to contain.In the United States, the coronavirus has already provoked millions of layoffs. While the $2 trillion rescue package signed by President Trump sends extensive relief to American workers and businesses, France and other European Union countries are deploying a more encompassing state-led approach in the event that the epidemic takes months, rather than weeks, to contain.
“There’s a very different strategy in Europe than in the United States about how to manage this recession,” said Patrick Artus, chief economist of Paris-based Natixis Bank. “The idea is to have no layoffs or company closures, so that when the coronavirus is finally under control the economy can start right back up.”“There’s a very different strategy in Europe than in the United States about how to manage this recession,” said Patrick Artus, chief economist of Paris-based Natixis Bank. “The idea is to have no layoffs or company closures, so that when the coronavirus is finally under control the economy can start right back up.”
France is hoping to learn a lesson from the 2008 financial crisis, when it didn’t take aggressive steps to support workers and businesses. Unemployment soon jumped to around 10 percent and stayed high for half a decade. By contrast, the rise in joblessness in Germany — which kept companies from collapsing by subsidizing furloughs in a system known as Kurzarbeitergeld, or short-time work — lasted less than a year before falling steadily.France is hoping to learn a lesson from the 2008 financial crisis, when it didn’t take aggressive steps to support workers and businesses. Unemployment soon jumped to around 10 percent and stayed high for half a decade. By contrast, the rise in joblessness in Germany — which kept companies from collapsing by subsidizing furloughs in a system known as Kurzarbeitergeld, or short-time work — lasted less than a year before falling steadily.
“France has decided it’s not going to make the same mistake with the coronavirus,” said Simon Tilford, director of the Forum New Economy, a research institution in Berlin. “That approach is going to be much less devastating.”“France has decided it’s not going to make the same mistake with the coronavirus,” said Simon Tilford, director of the Forum New Economy, a research institution in Berlin. “That approach is going to be much less devastating.”
Austria, Denmark and other northern countries have similar policies, and Britain announced last week that it would do the same. And on Wednesday, the European Commission’s president, Ursula von der Leyen, said governments would join to support short-time work so that “more people will keep their job” during the current crisis.Austria, Denmark and other northern countries have similar policies, and Britain announced last week that it would do the same. And on Wednesday, the European Commission’s president, Ursula von der Leyen, said governments would join to support short-time work so that “more people will keep their job” during the current crisis.
In France, the government is spending 45 billion euros ($50 billion) to pay businesses not to lay off workers. Deadlines for taxes and loan payments are delayed. Another €300 billion in state-guaranteed loans are being extended to any struggling company that needs them.In France, the government is spending 45 billion euros ($50 billion) to pay businesses not to lay off workers. Deadlines for taxes and loan payments are delayed. Another €300 billion in state-guaranteed loans are being extended to any struggling company that needs them.
Over 337,000 businesses have already put 3.6 million employees on paid furlough to be reimbursed by the state, the Labor Ministry said Wednesday. Officials expect the numbers to more than double as it receives “several thousand requests per minute.”Over 337,000 businesses have already put 3.6 million employees on paid furlough to be reimbursed by the state, the Labor Ministry said Wednesday. Officials expect the numbers to more than double as it receives “several thousand requests per minute.”
The plan isn’t without risks. European leaders are wary of relaunching the economy before the epidemic is proved to be under control. The tsunami of fiscal support by France and its neighbors — over €2 trillion in spending and loan guarantees combined — can be sustained only a few months, economists say.The plan isn’t without risks. European leaders are wary of relaunching the economy before the epidemic is proved to be under control. The tsunami of fiscal support by France and its neighbors — over €2 trillion in spending and loan guarantees combined — can be sustained only a few months, economists say.
The risk extends to the businesses as well, which must continue to pay one-fifth of the salaries of employees who aren’t working. If the economy doesn’t rebound by autumn, companies say, they may yet be forced to revert to layoffs.The risk extends to the businesses as well, which must continue to pay one-fifth of the salaries of employees who aren’t working. If the economy doesn’t rebound by autumn, companies say, they may yet be forced to revert to layoffs.
Mr. Paul of Groupe Butard is betting things won’t get that bad, despite fearing the worst when orders were canceled en masse in early March. Events organized by corporate giants like Schneider Electric and the French Federation of Rugby were called off, shrinking his expected monthly revenue of €4 million to €500,000 and leaving Dominique Julo, the company’s events director, with little to plan for.Mr. Paul of Groupe Butard is betting things won’t get that bad, despite fearing the worst when orders were canceled en masse in early March. Events organized by corporate giants like Schneider Electric and the French Federation of Rugby were called off, shrinking his expected monthly revenue of €4 million to €500,000 and leaving Dominique Julo, the company’s events director, with little to plan for.
Since then, Mr. Paul has used all the financial backstops made available by the French government, even delays of payments for electricity bills and rent on Groupe Butard’s offices and its hulking food preparation facilities outside Paris.Since then, Mr. Paul has used all the financial backstops made available by the French government, even delays of payments for electricity bills and rent on Groupe Butard’s offices and its hulking food preparation facilities outside Paris.
The state will pay him 80 percent of his employees’ salaries to keep them on payroll. Although Mr. Paul is still waiting for the money, because of a backlog in the 10-day reimbursement period promised by the government, the combined financial relief means the company “will be ready to rebound once the crisis is over,” he said.The state will pay him 80 percent of his employees’ salaries to keep them on payroll. Although Mr. Paul is still waiting for the money, because of a backlog in the 10-day reimbursement period promised by the government, the combined financial relief means the company “will be ready to rebound once the crisis is over,” he said.
Use of Germany’s paid furlough program is also soaring. Nearly 500,000 firms filed for support in March, the government said Tuesday, up from fewer than 2,000 in February. Among them are Daimler, Volkswagen, Lufthansa and the company that manages Frankfurt Airport, where air traffic has plunged 90 percent.Use of Germany’s paid furlough program is also soaring. Nearly 500,000 firms filed for support in March, the government said Tuesday, up from fewer than 2,000 in February. Among them are Daimler, Volkswagen, Lufthansa and the company that manages Frankfurt Airport, where air traffic has plunged 90 percent.
Updated July 7, 2020
The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.
A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
A similar collapse in activity forced Mr. Arkwright, the director general of Aéroports de Paris, to put 80 percent of the 6,000 administrative employees and 135,000 baggage handlers, security agents and other workers on paid furlough after Orly Airport and all but two terminals at Charles de Gaulle Airport, the second-busiest in Europe, closed.A similar collapse in activity forced Mr. Arkwright, the director general of Aéroports de Paris, to put 80 percent of the 6,000 administrative employees and 135,000 baggage handlers, security agents and other workers on paid furlough after Orly Airport and all but two terminals at Charles de Gaulle Airport, the second-busiest in Europe, closed.
He faced extraordinary circumstances as losses ballooned to an estimated €1.3 billion. Adding to the chaos, the chief executive of Aéroports de Paris, Augustin de Romanet, tested positive for the virus, leaving Mr. Arkwright to manage on an emergency basis as two-thirds of the airport company’s board also self-quarantined. All the executives emerged in good health.He faced extraordinary circumstances as losses ballooned to an estimated €1.3 billion. Adding to the chaos, the chief executive of Aéroports de Paris, Augustin de Romanet, tested positive for the virus, leaving Mr. Arkwright to manage on an emergency basis as two-thirds of the airport company’s board also self-quarantined. All the executives emerged in good health.
Aéroports de Paris, which is half owned by the state and is slated for privatization this year, is saving €25 million a month from government subsidies for paid furloughs, Mr. Arkwright said. The state has asked the company not to pay out an annual dividend.Aéroports de Paris, which is half owned by the state and is slated for privatization this year, is saving €25 million a month from government subsidies for paid furloughs, Mr. Arkwright said. The state has asked the company not to pay out an annual dividend.
“The advantage of this approach is that we can start up again literally from one day to the next,” Mr. Arkwright said. “I can call you and say, ‘Come in tomorrow.’ But if you go into unemployment, it’s not sure you’d be called in for a job. And we would lose people with valuable skills.”“The advantage of this approach is that we can start up again literally from one day to the next,” Mr. Arkwright said. “I can call you and say, ‘Come in tomorrow.’ But if you go into unemployment, it’s not sure you’d be called in for a job. And we would lose people with valuable skills.”
Allowing unemployment to balloon would also cost European governments huge sums, because of the generous benefits offered to fired workers. In Germany, for instance, someone who is let go after 12 months can still receive 60 percent of his or her salary for the next nine; in France, unemployment benefits last up to two years.Allowing unemployment to balloon would also cost European governments huge sums, because of the generous benefits offered to fired workers. In Germany, for instance, someone who is let go after 12 months can still receive 60 percent of his or her salary for the next nine; in France, unemployment benefits last up to two years.
“Laying people off actually costs more,” Mr. Arkwright said.“Laying people off actually costs more,” Mr. Arkwright said.
And people who can keep their jobs “are less unhappy and shocked than people who have been fired,” said Holger Schmieding, chief economist at Berenberg Bank in London. “They are less likely to dramatically cut their consumption. That limits the overall economic damage.”And people who can keep their jobs “are less unhappy and shocked than people who have been fired,” said Holger Schmieding, chief economist at Berenberg Bank in London. “They are less likely to dramatically cut their consumption. That limits the overall economic damage.”
In that sense, Mr. Schmieding added, governments paying companies to keep people furloughed “achieve a bigger impact for less money than supporting people who have lost their jobs.” The United States, which will now extend jobless benefits and make one-time cash payments to support workers, is effectively “paying the price for its inadequate welfare net,” he said.In that sense, Mr. Schmieding added, governments paying companies to keep people furloughed “achieve a bigger impact for less money than supporting people who have lost their jobs.” The United States, which will now extend jobless benefits and make one-time cash payments to support workers, is effectively “paying the price for its inadequate welfare net,” he said.
Mr. Paul of Groupe Butard said the French government’s protectionist playbook could sometimes be stifling for business. But safeguarding the economy and helping companies avoid throwing workers into unemployment would leave French society better off than others once the coronavirus epidemic was contained, he said.Mr. Paul of Groupe Butard said the French government’s protectionist playbook could sometimes be stifling for business. But safeguarding the economy and helping companies avoid throwing workers into unemployment would leave French society better off than others once the coronavirus epidemic was contained, he said.
“The French system can be cumbersome,” he said. “But it is incredibly effective in times like these.”“The French system can be cumbersome,” he said. “But it is incredibly effective in times like these.”
Constant Méheut contributed reporting from Paris, and Jack Ewing from Frankfurt.Constant Méheut contributed reporting from Paris, and Jack Ewing from Frankfurt.