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

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
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-
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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