Shortly after one year of the outbreak of the crisis and the hibernation of the economy to stop the pandemic, self-employed workers admit to being on the edge. With the vast majority assuming revenue declines that exceed 60% in six out of ten cases, the aid deployed by the Government will not be enough to prevent further damage and more than 300,000 are expected to close this year. or, according to the barometer on the situation of this group prepared by the Association of Self-Employed Workers (ATA).
“The aid is late,” laments the president of ATA, Lorenzo Amor. The announcement by Pedro Sánchez that the Government is finalizing an aid plan of 11,000 million euros has left this group more doubts than relief . Specifically, the uncertainty is centered on the distribution criteria and possible discrimination based on the viability of the companies, not so much on their solvency. “ATA is not going to support it, when the Government has decreed administrative closures it has decreed them for everyone but when it distributes aid, no”.
In reality, what the self-employed point out is that the establishment of feasibility criteria to determine who deserves aid and who is not a delicate matter, even from a legal point of view. It would be necessary to analyze the economic and financial situation of each business a year ago and from there to establish if what has deteriorated its solvency and its viability has been its own structure or the situation created from the closings decreed to stop the pandemic.
The possibility of a general easing of time and mobility restrictions in the coming weeks has not quite relieved the one and a half million active self-employed workers, since more than half expect that the fall in billing in 2020 will be added a further decline in income this year. The problems derived from this situation are mainly a financial situation that is more than compromised due to lack of liquidity and the conviction that its businesses will not recover until 2023.
The 11,000 million announced by Sánchez has also sown confusion among the unions. CCOO and UGT have demanded information from the Government on how they will be channeled. The unions ask for objective criteria and with commitments to maintain employment. Furthermore, they demand that the resources be linked to maintaining the activity and jobs.
In any case, the aid will fall on a very battered productive fabric. Two out of three freelancers are currently subject to administrative restrictions on their activity and 565,000 have the business closed. The diffusion of these circumstances occurs at the moment in which the Government, through the economic vice-presidency, designs a direct aid plan with which it hopes to support SMEs and the self-employed affected by the crisis.
Unlike the aid launched so far, the new plan will establish compliance requirements, so that not all businesses will be able to benefit from it to stay afloat. Economia jealously guards which criteria it will use to discriminate beneficiaries beyond stating that it will use public resources to rescue companies that, although they are in a situation of lack of liquidity or on the verge of insolvency, support themselves in a business with a future even if they have to do a restructuring. Companies or businesses in serious difficulties that do not meet these requirements will be excluded from the aid and will be in danger of closure.
“We need an urgent plan of economic measures that establishes direct aid to cushion the drop in activity and avoid the closure of companies, the self-employed and the destruction of employment”, summarized the president of ATA, Lorenzo Amor.
The delicate financial situation of the businesses maintained by this group puts their employment at risk. In many cases, workforce restructurings do not occur precisely because of a lack of funds to cover severance pay. Thus, 41.1% of the self-employed with workers acknowledge that they have already submitted a Temporary Employment Regulation File (ERTE) and 20.7% expect to reduce their workforce in 2021. To these numbers we must add 7, 3% of the self-employed who assure that they have requested or are going to request a short or medium term ERTE.
It is the aid deployed from Labor and Social Security that thus prevents the destruction of employment. Even so, 12.3% of the self-employed with workers under their charge admit that they have been forced to lay off as a result of the drop in their business turnover. The number could grow in the coming months, since 39.5% of the self-employed who have applied for an ERTE assure that they do not know if they have sufficient means to re-incorporate their workers “shortly”.
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