The economic situation of families between mid march and mid may 2020, the first two months of the Covid-19 pandemic

Abstract

The article discusses German families’ economic situation in the first months of the current COVID 19 crisis from mid-March to mid-May, 2020. Family incomes are at high risk because of unemployment and short-time work. Recently introduced adjustments of the “Infektionsschutzgesetz” (Protection Against Infection Act) that established a claim for wage replacements for parents who have to provide childcare and home schooling for their children, due to the lockdown of kindergartens and schools, only partially compensate incurred losses. Further, far from all parents are entitled to the statutory short-time allowance, nor do recipients benefit to the same extent, and the approved upgrade of the replacement rate will only gradually become active. Moreover, public family-related measures such as the “Notfall-Kinderzuschlag” (emergency child supplement) and facilitations concerning parental leave entitlements during the crisis will only partly absorb the experienced income reductions. On the other hand, families’ daily expenses remain unchanged. While struggling how to make ends meet, families are confronted with a second burden, the challenge to reconcile domestic needs with job requirements. As first evidence suggests, women will bear the lion’s share of the crisis’ extra unpaid work for families. A prolongation of wage replacements for some extra weeks will relieve parents’ financial concerns, but a stepwise reopening of the child and youth welfare system, schools and the business sector remains essential for parents’ ability to return to work and to sustain their livelihood.