Is It Too Late for Work-Sharing?

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Pat Garofalo has a good overview at the Wonk Room of the idea of trying to use “work-sharing” programs, “subsidizing employers who reduce workers’ hours (and maintain their pay) instead of laying some of them off.” This doesn’t seem to be an idea anyone except Dean Baker is very enthusiastic about, though people are getting more interested in it because it’s cheaper than additional fiscal stimulus:

Something that I think hasn’t gotten enough attention here is whether we haven’t passed the moment when this would have been most helpful. Such a program, enacted 12 months ago, could have avoided a lot of layoffs. But looking forward we’re not so much worried about large additional net job losses. What we’re worried about is that given the large number of unemployed people, we need to see large net job growth but instead we could be seeing job growth so anemic that it doesn’t even keep up with labor force growth. That’s a very serious problem. But it’s not clear to be that it’s a problem work-sharing really addresses.

It’s also worth saying that even looking backwards we were in a very different situation than Germany. Germany’s export-oriented economy was heavily hit by the recession because demand for their products vanished. But in that sense they were very much a secondary casualty of the recession. The presumption was that once growth returned elsewhere, people would go back to buying German stuff and employment would return at more-or-less the same firms that it had been at in the past. In the U.S. context, it’s not clear how much help work-sharing would have provided to people working in the building trades who lost their jobs.