The coronavirus pandemic is straining social safety nets across the globe — and underlining sharp differences in approach between wealthy societies such as the United States and Europe.
In Europe, the collapse in business activity is triggering wage support programs that are keeping millions on the job, for now. In contrast, in the United States more than 33.5 million people have applied for jobless benefits and the unemployment rate has soared to 14.7 per cent. Congress has passed US$2 trillion in emergency support, boosting jobless benefits and writing stimulus checks of up to US$1,200 per taxpayer.
That is a pattern seen in earlier economic downturns, particularly the global financial crisis and the Great Recession. Europe depends on existing programs kicking in that pump money into people’s pockets. The U.S., on the other hand, relies on Congress taking action by passing emergency stimulus programs, as it did in 2009 under President Barack Obama, and the recent rescue package under U.S. President Donald Trump.
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1:02The pandemic-induced recession is hurting women
The pandemic-induced recession is hurting women
Economist Andre Sapir,