In today’s news cycle, the word “jobs” is as ubiquitous as it is daunting. We are at a point where “jobs jobs jobs” are the primary issue for most of the American electorate. Several events have intensified the issue of high unemployment into our national dialogue; including the GOP nomination battle, Occupy Wall Street, the fall of the American Jobs Act, and the Wisconsin collective bargaining controversy. While articles can be written on each of those events alone, it is the lack of a solution to our 8.6% unemployment which deserves attention.
Work Sharing is a policy outlined by Dean Baker, an economist at the Center for Economic Policy and Research. Currently, it is the best policy proposal to curb high unemployment and ought to be implemented on a national level immediately. Work sharing in a nutshell involves reducing hours for workers during times of declining demand instead of laying them off thus keeping them employed. Funds otherwise devoted to compensating a laid off worker for the allotted 99 weeks would thus offset the reduction of hours. The work sharing policy would be a part of the already existing unemployment benefit system and would require a fraction of the total cost.
Germany has already used this policy on a national level to great success. With a 5.5% unemployment rate, employers have the incentive to decrease 20% of total work hours for everyone instead of laying off 20% of their workers. Germans who lose one day out of their workweek are given one-fifth of what their usual unemployment check would be. It has helped largely workers within the construction and manufacturing industry, the same industries hurt the most during America's economic downturn.
Although 22 states, including New York, California, and Rhode Island, in the U.S. have similar programs, they have not been updated since their founding in the 1970s and 1980s. Furthermore, limitations towards eligibility, over bureaucratization, and little knowledge of the program’s existence have contributed to the lack of significant impact work sharing has had within the U.S.
A work sharing system on a national level can be implemented better if employers are given more discretion over their own hour reduction and employee eligibility for such a program. This would involve funds being given to the employer themselves rather than the individual worker according to Baker. Questions of benefits and time restrictions would have to be addressed and are to a great extent in Baker’s proposal seen above.
Short-term effects would consist of keeping workers more employable to the extent that they would not have any gaps in their resumes. What’s more, for the long-term, when companies see increases in demand, all they have to do is increase hours instead of going through an intensive hiring process. The policy of work sharing is not only conscious of workers, but “job creators” as well.
The process of pushing such a policy on a national level should not be divided by party line to the extent that 22 states have already put similar, but weaker, polices in place. The German government, comprised of social democrats and conservatives, has had relatively little difficulty keeping their short-term work-sharing program in place. Wall Street Journal associate editor Justin Lahart has expressed his support for such a program. Kevin Hasset of the American Enterprise Institute and John McCain’s 2000 campaign chief economist has also advocated for a work sharing policy.
With policy modernizations, program commitment, and financial support, we can install a national system where it is more desirable for companies to keep their employees on the payroll instead of laying them off. If the reader is skeptical of work sharing, the author implores them to read Baker’s proposal in full, as critical details vital to program implementation are held within it.
What the U.S. does not need is sloganeering and political banter regarding changes in government policy. “Cut, cap, and balance” and “9-9-9” are not real policy proposals, they merely suggestions of them, subject to change for the political expediency of the elected official at any given time. What we need are new policies to follow in the face of new challenges. With the jobs challenge at hand right before us, work sharing is the best solution out there.
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