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At the height of the Corona crisis, one reduced-time assignment request was submitted for every third Zurich employee. But companies have settled for less.
The Neumarkt restaurant is one of the sectors most affected.
It was an attack like no other. When Switzerland was blocked in March 2020, thousands of companies flocked to the Canton of Zurich Office of Economics and Labor, and tens of thousands of employees found themselves in a state previously known only from the news: part-time work. .
Instead of the usual 10-15 applications per month, the employment office was suddenly faced with around 34,000 short-time job subsidy applications. It reached its limit in no time and needed the help of employees from a wide variety of offices, for example the traffic office, the high school and the vocational training office or the specialized center for equality. Sometimes 150 more people were summoned. Rapidly developed software called “ALKbots” was also required so that compensation could be paid quickly.
At the height of the crisis, the canton sporadically announced the industries from which the requests for part-time work came. But not all companies that applied for a permit also settled the reduced-time job in the end. Therefore, only now is it possible to take stock of who was affected and where and how much money was allocated. At the end of September, the deadline for companies to submit attendance sheets for June, the last month of the lockdown, ended.
During the months of March to June, around 1.2 billion francs in short-time allowances were paid to companies that had submitted their applications in the canton of Zurich. This corresponds to about 21 percent of all payments made in Switzerland. The fact that Zurich’s “economic engine” is not higher is probably due to the fact that sectors such as banking and insurance were relatively little affected and that the blockade further affected other parts of the country, such as regions tourist.
Definitely April. Regardless of what size you look at (companies, employees, working hours), the maximum values were reached this month. Also remarkable is how quickly the curve fell again after the steep climb. For example, in April almost 19 million hours lost were reported and CHF 500.6 million paid. For June it was 6.8 million hours and 197.8 million francs.
Statistics also show that part-time allowances were not charged in any way for each employee for whom leave was available. In mid-April, the Office for the Economy and Labor reported that an application had been submitted for around 345,000 employees, affecting about one in three employees in the canton of Zurich. According to data from the Seco, in April “only” reduced workdays were taken for 250,337 people, while in March and May there were less than 180,994 and 194,364 respectively.
Unsurprisingly, it was the restaurants, bars and hotels in particular. For the peak month of April, almost two out of every three companies received a short-term subsidy. In trade, it was about a third of the stores. Compared with the total number of companies in the canton of Zurich in the respective sectors, other branches were less affected or less frequently resorted to the unemployment fund. These data also illustrate the speed of the decline.
It was more or less the same industries that accounted for the least amount of work during the shutdown. In addition to gastronomy, there was in particular retail and wholesale, building management, aviation, the provision of personal services, as well as education and instruction.
However, it can be seen that the relative weight of the individual branches has changed significantly in some cases. In March and April, the health service had the sixth and fifth most part-time employees. In May it disappears from the upper group, probably as a result of the easing and because the ban on the operation has ended. On the contrary, aviation is on the rise. In June, it put the second-highest number of employees into part-time jobs, but only because many other industries returned to normal and the aviation crisis continued. The number of short-time workers in the aviation industry has remained more or less constant since April.
However, Seco’s stats should also be viewed with caution. This is demonstrated by the example of the category “Business Administration and Management” which, in addition to public relations and management consulting, mainly includes activities at corporate headquarters. In April and May, the second highest number of employees came from this branch, only behind the catering trade.
However, there are more statistical than economic reasons behind this. Upon request, Seco wrote in the summer that short-time work could be shipped at both company and company level, which, given the large number of requests, can lead to blurring of assignments. For example, applications for the company’s headquarters in Zurich could also be related to jobs in branches in other cantons. The same applies to assigning to branches. Therefore, the business management industry appears to be somewhat bloated.
Essentially it’s the same industries that have had the biggest impact. The concentration is pronounced: seven industries received about half of the allowance for short-time work that entered the canton of Zurich during the closing period: 640 million out of 1.24 billion francs. At the bottom of the statistics, which cover 80 branches, are stone quarrying, public administration and water supply. There, amounts were settled in the low five-digit range.
In view of the flood of short-term work permits and millions of contributions paid, it was soon speculated how much money was improperly withdrawn, also due to some reports of abuse of federal Covid-19 loans. Upon request, the Secretary of State for the Economy emphasizes the need to systematically investigate suspicions. So far, 111 cases have been recorded for the canton of Zurich in which the unemployment law may have been violated. Across Switzerland, six cases were reported to the prosecution on the basis of well-founded suspicions.
Economist Michael Siegenthaler of ETH’s Center for Economic Research cautions against focusing too much on potential abuses. There was undoubtedly potential, he says. Because this time it affected all industries, including those in which hours of work are recorded less systematically than in many construction and industrial companies that recorded reduced work in previous crises. Second, the Federal Council rapidly expanded the pool of eligible individual groups, for example to include family members in small businesses.
However, the big picture should not be lost sight of, emphasizes Siegenthaler. In the post-2008 crisis, part-time work helped keep people in the work process who would otherwise have been laid off and who would have been difficult to gain a foothold due to their age and skills. This will be the case again this time, even if one or the other company will make an unpopular decision.
