Thompson: Denmark’s government has announced a very aggressive plan to help workers in the next few months. Tell me what it’s doing.
Larsen: Denmark’s government agreed to cover the cost of employees’ salaries at private companies as long as those companies do not fire people. If a company makes a notice saying that it has to either lay off 30 percent of their workers or fire at least 50 people, the state has agreed to take on 75 percent of workers’ salaries, up to $3,288 per month. (This would preserve the income for all employees earning up to $52,400 per year.)
The philosophy here is that the government wants companies to preserve their relationship with their workers. It’s going to be harder to have a strong recovery if companies have to spend time hiring back workers that have been fired. The plan will last for three months, after which point they hope things come back to normal.
Thompson: So the government is offering to pick up the tab for workers whose employment is threatened by the downturn. Couldn’t companies easily defraud the government and collect the money anyway?
Larsen: Maybe, but the workers compensated are not allowed to work in the period. Workers staying with the company do not receive the 75 percent compensation.