As companies struggle to make it from recession to recovery, many are turning to a novel but unheralded program that cuts their costs while sparing their workers’ jobs.
Under the program, known as work-sharing, employers reduce their workers’ weekly hours and pay, often by 20 or 40 percent, and then states make up some of the lost wages, usually half, from their unemployment funds.
Work sharing, sometimes also known as short-time compensation, has long been used in Europe. California established a work sharing program in 1978. A temporary national program began in 1982, followed by permanent changes to federal laws in 1992 that allow work sharing, according to the Center for Law and Social Policy, a nonprofit organization.
American workers, on average, have less job security than European workers. When faced with a need to reduce their workforce, U.S. companies typically resort to layoffs much more than do their European counterparts. European companies rely more on alternatives to layoff, including work sharing and attrition.
Many Americans believe that layoffs, and weak job security, are the price that must be paid for a healthy economy. Many also believe that strong job security in Europe reduces labor market flexibility, thereby obstructing change and inhibiting growth.
But in Europe many countries have avoided having to resort to stimulus efforts, because they have effective "work sharing" programs in place.
Even though 17 states have adopted the program, and many executives and economists hail it as a way to keep workers employed and companies staffed with skilled labor, only a fraction of the businesses and workers that are actually eligible are benefiting. That is largely because of inertia and ignorance, government officials say. Many companies are unaware of the program’s existence, and few states advertise it — even though the program is credited with saving hundreds of thousands of jobs in Germany, whose work-sharing program has inspired other nations.
With unemployment in the United States above 9 percent and climbing, pressure is growing on the states that have work-sharing to increase the number of companies and workers that participate, and on the 33 states that don’t have work-sharing to embrace the program.
The question is - will the U.S. be able to muster it's collective will (and wise use of investment in the labor pool) and create this "safety net" for it's skilled workers so that we can protect the remainins skilled workers that today are fearful of losing their jobs completely?
