Switzerland’s largest aid package on record to offset the economic hit of the coronavirus pandemic should help the country sidestep a wave of unemployment, according to the head of the government’s labour department.

Boris Zuercher said although Switzerland’s unemployment rate will increase over the coming weeks, measures such as the extended short-time working compensation scheme will lighten the burden on businesses and staff, Reuters reports.

“I do believe that the short-time working compensation scheme will prove its worth and is already proving its worth,” Zuercher said to reporters.

“The measures the government has introduced to extend and improve short-time working should allow us to avoid a massive wave of job cuts.”

Businesses that employ 1.45 million members of staff – making up almost 29% of the entire workforce – have so far applied for short-time work compensation, the head of the labour department added, saying it didn’t necessarily mean these people would work shorter hours.

Within Switzerland’s “Kurzarbeit” scheme, part of the country’s 62bn Swiss franc aid package, workers receive 80% of their wages from the government. The aim of the initiative is to ease the burden of paying wages from firms, so they could hike employment after the pandemic crisis has come to an end.

Zuercher went on to add: “The point of short-time working is to avoid job losses and stabilise the situation.”
The jobless rate in Switzerland increased to 2.9% in March, from February’s figure of 2.5%.

The number of people registered unemployed rose to 135,624 last month, up from 117,822 the month before.

Switzerland’s restaurants and hotels have been especially negatively affected, making up 20% of job losses last month due to government shutdowns to try to stop the spread of the coronavirus.

Switzerland’s government has already forecast a recession for this year because of the pandemic.

Zuercher added: “The longer this situation lasts, the harder it is to get out. If it continues like this for another three or four months, it will also affect solvent companies.”

 

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