Thread by @StephanieKelton, THREADWhat if, instead of tolerating a huge spike in joblessness, the government [...]

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What if, instead of tolerating a huge spike in joblessness, the government just made it (nearly) impossible for employers to lay off workers while the economy is “turned off”?

According to my friend @ndrea_terzi , that’s what the Italian government has done. With the exception of layoffs for "subjective reasons" (discipline), business cannot lay off workers for "objective reasons" (fall in sales). Effective through May.

Came in the form of a bill, approved by the Senate March 17. There are very few exceptions, like cleaners contractually hired by private households. If an employer tries to lay off a worker in violation of terms, the decision is simply void (not even illegal).

Coronavirus: le misure urgenti, dal blocco dei licenziamenti al premio per i dipendenti in azienda

Nel decreto “Cura Italia” aiuti per 25 miliardi per far fronte all’emergenza Coronavirus

https://www.ilsole24ore.com/art/coronavirus-misure-urgenti-blocco-licenziamenti-premio-i-dipendenti-azienda-ADFR5tD

To cover payroll and other expenses, business can get loans up to 25% of their sales last year with State guarantee. (Not sure if they turn into grants.) Also, VAT and payroll taxes are suspended. He says France and Spain may have done something similar, but he isn’t sure.

It will be interesting to see how the unemployment numbers (potentially surging to 20-30 percent in the

) compare with

if Italian employers strictly adhere to these restrictions.

And @ndrea_terzi is a great follow for econ and #MMT

You can follow @StephanieKelton.

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