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Home Publications Blogs Beat the Press Germany Uses Work Sharing

Germany Uses Work Sharing

Sunday, 14 August 2011 07:48

Roger Cohen has an interesting column touting the performance of Germany compared to the United States in the years since the onset of the crisis. He concludes by suggesting that Germany can save the United States with its ideas as to how to manage an economy and society.

While Cohen mentions several important differences between the United States and Germany, remarkably he did not mention Germany's work sharing system. Even though growth in Germany and the United States has been comparable since the beginning of the downturn, Germany has actually seen a decline in its unemployment rate of more than half a percentage point from the pre-recession level.

This is due to the fact that Germany encourages firms to reduce work hours rather than lay people off. In a standard arrangement, workers may put in 20 percent fewer hours and end up taking home 4 percent less pay. Most of the difference comes from a government unemployment benefit that is converted to a subsidy for short-time work. The company is also expected to make up some of the pay. This system is very popular across the political spectrum in Germany. It has been embraced by the conservative government although it was originally put forward by a Social Democratic minister in the previous unity government.

Comments (7)Add Comment
written by Dick C, August 14, 2011 10:02
To have the idea accepted here we'd need to have Bachmann float it as her own idea.
Someone should TOTALLY bring this up
written by Matt, August 14, 2011 11:19
If nothing else, floating this proposal would probably incapacitate half of the teabaggers with aneurysms... :)
Work sharing in the US
written by AndrewDover, August 14, 2011 11:34
"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."

"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."

Real Americans Share Blame and Pain - not Work
written by izzatzo, August 14, 2011 1:19
Work sharing is one more liberal welfare policy that leads down the path of serfdom. It's no different than being forced to share one's income or wealth with freeloaders who only work as a last resort after exhausting all the handouts.

Real Americans have the backbone and character to bear their share of the blame and pain with heads held high and shoulders to the wheel or backside to the couch so others may earn their full worth.

Be a patriot. Don't short change your fellow workers. If you're not putting out then get out so everyone else has a full time job.

Stupid liberals.
written by jethro, August 14, 2011 3:32
Andrew Dover posts the NYT article and you have to love this part 'That is largely because of inertia and ignorance, government officials say'

Government officials claiming businesses are ignorant. Really....

My company (I own 30%) just registered our business - to do business - in all 50 states and also with the SEC; you want to talk about ignorance, bad attitude, and incompetence.
Liberals bashing tea party- is like government bureaucrats, professors, and Hollywood morons bashing businesses... It's comical
written by Doc at the Radar Station, August 14, 2011 8:15
I think work-sharing German-style would be more popular and an easier sell in the US, if employers didn't save so much money in health insurance premiums by cutting head counts rather than reducing hours. If we had single-payer health insurance and removed the incentive to reduce head counts, work sharing would be more practical.
written by diesel, August 15, 2011 1:06
Daggumit Jethro, when youall sez bureaucrats, the first that comes to my mind is the blasted recording every time I try to call the phone company because they screwed up my bill--again. Or the insurance company, take your pick. I never seed such incompetence, nor avoidance of responsibility. Seems like they spend more money in making it hard for me to communicate my gripes than they save by refusing to address their incompetence. So I don't think government has a monopoly on bureaucratic nincompoopery.

And another thang. Why you bashing Hollywood? Them's about the only thing we still successfully export! And hamstrung with a fully unionized labor force at that! Ain't that a coincidence?

Finally, that Albert Einstein feller was a professor, and I could think of a few other of that breed that I wouldn't care to stigmatize with labels such as "ignorance, bad attitude and incompetence".

But you jest go ahead, if that floats your boat.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.