CPB wants the cabinet to phase out wage support and focus on retraining | NOW

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The cabinet currently supports companies in the continued payment of salaries, but would do well to phase out this support. Instead, the cabinet should encourage people to retrain, says the Central Planning Bureau (CPB) Friday.

The economic consultancy refers to the NOW scheme. This was created to encourage companies to lay off as few employees as possible because of the COVID-19 pandemic.

The government pays part of the wage costs. The amount depends on the loss of turnover that a company suffers. Under the current scheme, this aid will run until the end of September. It is not yet clear whether this scheme will continue to exist and what it will look like.

According to the CPB, a continuation of this scheme in its current form is not a good idea. “Now that some of the companies have long-term lower productivity, the importance of looking for other work is increasing.”

If the cabinet cuts aid, employees are inclined to quit jobs in sectors where there is little demand for personnel, such as the hospitality industry and the festival sector. Instead, they go to work, whether or not after completing training, in sectors where there is still plenty of recruitment, such as education, healthcare and ICT.

Politicians would therefore do well to stimulate this transition, for example by guiding people to other work and making retraining more attractive.

The NOW scheme has been fully utilized in recent months. Companies have applied for aid for a total of 2.6 million employees. By way of comparison: at the time of the financial crisis about ten years ago, only 77,000 employees were applying for part-time unemployment benefit.

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