A Closer Look

COVID and Labor Market Policy – The United States as a whole lags (Canada too)

The United States as a whole lags rich countries in all types of labor-market policies. Its spending on unemployment benefits is well below the OECD average, and its total spending on labor markets is the second lowest of the group. But this is already changing. The projected unemployment spending alone following the Cares Act would be over 1% of 2019’s GDP, putting the U.S. above the OECD average in a normal year.

European labor markets also tend to be more explicitly organized than American ones. In Denmark, which spends about 3% of GDP on its labor market policies (which include training as well as benefits), huge swathes of workplace policy are arrived at through the so-called tripartite agreement between the state, unions, and employers, while wages are arrived at through collective bargaining. Large portions of the German workforce determine their wages through collective bargaining, and unions often have a managerial role at the company level. This has made it easier to negotiate and implement expansive responses to the epidemic and economic shock.

Chosen excerpts by Job Market Monitor. Read the whole story @ Will New Unemployment Benefits Outlast the Coronavirus Recession? – Barron’s

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