The market has dropped like lead on the Covid19 virus crisis.
The next step for many companies, seeing their supply lines disrupted and their customers staying home, will be to cut payroll.
But what if they don't?
What if they take the pass less traveled and decide not to lay off people but to share the burden?
Imagine that instead of cutting 10% or 20% of the work force, the company and the government agreed that for a period of a month - or two or three - the company would furlough 100% of the employees for half a day or one day a week and the government would pay unemployment benefits for the last a half/whole day?
How much would your income suffer if you got unemployment benefits instead of your salary for 20% of your time? Would you have to cut significantly down on your expenses? Would you lose your home? Would you be willing to do this if everybody else took the same cut? Would you like three-day weekends?
If the government pays 20% of the people full unemployment benefits, or all of the people 20% benefits really does come out to the same expense. But it makes a world of difference to the people who otherwise would have been let go.
When employees can just get another job, this is not a good solution because people aren't really unemployed and available to the labor market. But under crisis, when many companies are laying off people and nobody is hiring, this is how we can keep the wheels spinning with as little pain and disruption as possible.
There is a word for it. It is called Solidarity.