Part-time employees in the leisure industry are among the first to feel the economic shock triggered by the novel coronavirus outbreak, according to the Chamber for Small and Medium Enterprises.

“Part-timers in this industry – which is both seasonal and volatile – constitute a significant chunk and are the first to bear the brunt as employers will initially try to cut losses by not using their services until the situation improves,” Philip Fenech, the head of the GRTU’s tourism and leisure section, told Times of Malta.

As from last Wednesday, bars, restaurants and all places of entertainment were closed by the Superintendence for Public Health in a bid to contain the virus outbreak. Moreover, hotels have been dealt a severe blow as all incoming and outbound flights were suspended from Saturday.

Yesterday, the government announced further measures, closing all “non-essential” retail outlets and services.

“In the short term, employers are trying to mitigate the situation by giving forced leave to full-timers. They are also switching their focus to introducing delivery services in order to remain in operation, through dedicated mobile applications in conjunction with taxi companies.

“However, if the situation prolongs, the repercussions will be more serious and we feel the government’s aid packages rolled out so far do not go far enough,” Fenech said.

He pointed out that the economic shock from the outbreak was two-fold. Unlike the 2008 recession, which had been on the horizon for months, allowing businesses to prepare themselves, the current situation developed in a matter of days.

“We have gone from a historic hype to a complete standstill overnight,” Fenech said.

Also, this situation cropped up at a delicate moment when most businesses were reinvesting their profits to expand further, meaning they were vulnerable.

“Contrary to public perception, most business owners do not hoard savings but reinvest part of their profit and their projected revenue to keep up with the challenges,” he noted.

Fenech said more talks were scheduled with the government in a bid to improve the €1.8 billion aid package rolled out last Wednesday. In this respect, he welcomed the prime minister’s announcement yesterday that further readjustments of this package were in the pipeline.

Businesses and unions have lamented that most of the money allocated by the government was in the form of tax deferrals and bank loan guarantees rather than direct injections of cash or subsidies towards workers’ wages.

However, sociology professor Godfrey Baldacchino on Saturday called for a different approach in a bid to avoid mass unemployment, namely a 20 per cent pay cut for workers who earn more than é20,000, a three-day working week and early retirement schemes for all employees over 59. This would ensure that employers retain their workforce and be in a position to bounce back when the situation improved.

Asked about this proposal, Fenech said such measures were being considered by the leisure industry as part of a long-term solution, adding that business owners could not disburse all their savings as they would risk going bankrupt.

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