In Europe, millions of jobless are falling through the cracks

Liz Alderman, The New York Times

Posted at Aug 14 2020 02:46 AM

Thierry Hombert in his apartment in Fresnes, France, on July 27, 2020. When Hombert lost his job after the pandemic hit, he had to trade in his car and put his apartment on the market. Andrea Mantovani, The New York Times

PARIS — Thierry Hombert stepped onto the balcony of his sparsely furnished apartment and took one last long look around. When the coronavirus hit France, the short-term catering gigs on which he lived for a decade disappeared, and he was now selling his home to make ends meet.

While millions of employees across Europe have been cast lifelines by government furlough programs meant to limit mass unemployment, Hombert and legions of other workers on precarious irregular contracts were excluded from that support.

“It’s people like us who are falling through the cracks — and we are many,” said Hombert, 50, who worried about finding himself out on the street. “We’re the ones being left behind.”

The furlough programs, widely credited with sparing more than 60 million people from layoffs in Europe, have a major drawback: They don’t shelter millions of workers who aren’t on company payrolls, including the newly self-employed, freelancers and people on the kind of short-term contracts that employers have used en masse since the 2010 financial crisis to reduce labor costs.

These people generally have reduced access to unemployment benefits, which are far less generous than the furlough programs.

Around 15 million people in the European Union were unemployed in June, a rise of 700,000 since April, according to Eurostat, Europe’s statistics agency. Heavily seeding those ranks are people who had been on work contracts. They account for around 4 out of 10 workers in the industries hardest hit by COVID-19, including tourism, catering, restaurants and services where there is direct contact with other people, according to the Organization for Economic Cooperation and Development.

These workers face bleak prospects for new employment in Europe’s deep recession and have fewer social protections than furloughed employees, including scant access to sick leave, exposing many to steep income losses and the threat of further precariousness.

Hombert is among those who have taken a heavy hit. For 10 years, he forged a career in the catering industry by working on a relentless cycle of daily and hourly contracts.

On a typical day, he woke at 5 a.m. to work a business breakfast at one end of Paris, then headed to another part of town to service a glittering political or social dinner ending after midnight. Grabbing a few hours of sleep, he headed to a fresh gig in the morning, where he signed new temporary contracts all over again.

The work pulled in 3,000 euros ($3,500) a month — enough to pay living expenses, his 1,000 euro mortgage payment and support for his two teenage children. But his savings were liquidated last year when he and his wife divorced and he bought her share of the apartment, in Fresnes, a working-class suburb south of Paris.

When the pandemic wiped out his contracts, the catering firms that employed him put only permanent staff on furlough, reaping a subsidy from the government for not firing them.

Europe’s furlough subsidy programs don’t extend the same benefit to contract workers, throwing Hombert into an uncertain future.

His jobless benefits, which are less than half his normal income, last for only 180 days under unemployment rules governing the catering industry. After they expire in mid-August, he will go onto France’s basic welfare, which provides around 600 euros a month, not enough to take care of his expenses.

“COVID-19 has created a huge financial crisis,” said Hombert, who traded in his car, cut back on all but the basics and scrapped plans to take his children on vacation. “You try to plan two months out, but you can’t even do that,” he said. “Then you find yourself having to sell the apartment to get by.”

But engineering less pain may prove impossible. In Britain, the government also acted quickly to protect the economy and was lauded for the scale of its measures. A plan to pay up to 80% of workers’ wages was announced before the nationwide lockdown went into force in March. By the middle of July, 9.5 million jobs were furloughed.

Still, more than 1 million people have fallen through the gaps in these support programs, including the self-employed and short-term workers, according to a parliamentary select committee report.

Thousands have found a collective voice online using the hashtag #ExcludedUK, whose founders conducted research showing that at least 3 million people are receiving little or no support from the government.

Sonali Joshi, one of the founders, owns a film company working with Asian cinema. As director of the company, most of her income comes from dividends, which makes her ineligible for the government’s self-employment income support program. The parliamentary report estimates there are 710,000 others like Joshi locked out of aid this way.

“We’re stuck in this situation of real uncertainty,” Joshi said. “Four months have passed already, but we don’t know how to recover in many ways without the support that really should be there.”

Joshi faced unappealing options, including putting herself on furlough to earn about 500 pounds ($637) a month or continue working, though all of her projects were on pause. In the end, she chose furlough. But with business down, she can’t give any new projects to the 200 freelancers who work with her.

The situation will grow bleaker in autumn, when many of Europe’s furlough programs expire and a tsunami of new layoffs hits. Airbus, Renault, British Airways and other European corporations have announced huge downsizing despite taking government furlough subsidies. In France alone, President Emmanuel Macron has warned of 1 million more jobs lost.

“In September, when you will have large numbers joining the unemployment system with good employability in front of people who’ve been unemployed since the beginning of the crisis, it’s going to be a drama,” said Christophe Catoir, president for France and northern Europe at Adecco, Europe’s biggest temporary employment agency.

European governments have sought to cushion the blow by expanding some protections for nonstandard workers, easing access to paid sick leave and introducing or increasing unemployment benefits. In France and Denmark, temporary income replacement programs were extended to the self-employed. Germany and other countries began funding paid furloughs for people contracted directly with temporary employment agencies.

The support goes only so far. At Adecco, 78% of temps lost work during France’s quarantine and received furlough pay for the duration of their short-term contracts, which in France averages around seven days. But when the contracts ended, they scrambled to find new work even as employers stopped hiring.

Governments are trying to help people like them by pumping billions into retraining for the unemployed. But the programs can sometimes feel futile for those who need fast access to new jobs.

When Hombert applied at the unemployment office for work assisting elderly people and cleaning their homes, he was told he would need two years of training. He also finds himself in competition with younger workers for summer jobs at do-it-yourself stores and other big shops.

“At age 50, trying to find work is almost impossible,” he said. “Jobs don’t go to us.”

Landlords won’t rent to Hombert because he has no job, and he faces a wait of up to four years for public housing. Without a home, he worries he won’t be able to host his children, who stayed with him every other week after the divorce.

“It’s hard to live,” Hombert said, his voice faltering. “You hear stories about people winding up on the street and you think, ‘That could be me.’ It’s frightening.”

Enrico Bergamini, the author of a report on inequality arising from COVID-19 for Bruegel, a Brussels-based think tank, said government policy responses to the crisis still left too many facing unprecedented vulnerability.

“The issue will be, how do we recover from this shock, which is widening inequality gaps,” said Bergamini. “Workers are unprotected and vulnerable because we let them be.”