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100 Monthly Lab. Rev. 16 (1977)
Work-Sharing Initiatives at Home and Abroad

handle is hein.journals/month100 and id is 940 raw text is: Work-sharing initiatives at home and abroad Western European nations have used spread-the-work programs to combat high unemployment and, unlike the United States, have provided jobless benefits to those forced to work part time SAR A. LEVITAN AND RICHARD S. BELOUS Since World War II, economic stabilization policies have centered on fiscal and monetary measures. However, these traditional demand-management policies have not been adequate for reaching accept- able levels of unemployment without harmful side effects. Arrangements affecting the supply of labor, in- cluding work sharing, have been widely tried in Western Europe and also attempted in isolated American cases. Advocates claim that reduced worktime has proved an effective short-term weapon against unemployment, one that often has involved less deficit financing than standard recession-related programs, including public service jobs, public works, unemployment insurance, and welfare pay- ments. Work sharing in Europe The recession in the mid- 1970's hit Western Europe with nearly the same severity as the United States, but, by official measures, unemployment re- mained lower there than in the United States. The fiscal and monetary policy response on both sides of the Atlantic was quite similar. Concern over renewed inflation and reluctance to expand the role of government discouraged massive public works Sar A. Levitan is the director of the Center for Social Policy Studies, The George Washington University; Richard S. Belous is a research associate at the Center. This article is based on Shorter Hours, Shorter Weeks: Spreading the Work to Reduce Unemployment, scheduled for publication later this year by the Johns Hopkins University Press. programs and other vigorous countercyclical moves. Like the United States, most Western European na- tions injected a moderate fiscal stimulus to increase aggregate demand. However, some European nations also imple- mented programs to influence the supply of labor. In particular, the use of work sharing as an antireces- sionary tool rose significantly.I Work sharing spreads the impact of an economic downturn. Under work sharing, a firm which must reduce its total hours worked by, say, 30 percent because of a slump in demand can reduce each employee's workweek by 30 percent. In contrast, a layoff system would deprive 30 percent of the firm's workers of their jobs. The American system of unemployment insurance discourages work sharing because part-time workers are normally not eligible for benefits. However, many European nations have specifically designed their be- nefits to promote work sharing. Generally, em- ployees in a European work-sharing program are compensated either directly or through the firin for a percentage of wages lost due to reduced hours.. West Germany. West German work-sharing plans pay benefits amounting to 68 percent of lost wages. German short-time workers consistently have higher incomes than other workers who collect unemploy- ment benefits. During the mid-1970's recession, the eligibility for short-time benefits was extended from 6 to 12.months, and in some cases up to 24 months. The German government recently claimed that

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