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Job Creation that Both Parties Can Agree On

Written by Nicole Woo   
Friday, 07 January 2011 17:45

As Dean Baker pointed out earlier today, the drop in the unemployment rate announced this morning was due in large part to people giving up looking for work and dropping out of the labor force. There don't appear to be any areas of the economy with strong job growth now, nor for the rest of 2011.

One potential bipartisan job creation strategy is work-sharing. Just before the election, the Frum Forum highlighted it as "A New Jobs Stimulus the GOP (and Dems) Can Back." And Dean teamed up with Kevin Hassett of AEI last year in a joint op-ed in the LA Times to explain the good reasons to use work-sharing to create jobs and avoid layoffs.

Work-sharing (a.k.a. short-time compensation) already exists in 18 states. According to the U.S. Department of Labor,* there were over 153,000 participants across the nation in June 2009, a more than 12-fold increase from just over 12,000 participants in January of 2007. With work-sharing claims averaging a bit over 1/4 of a job, that represented about 40,000 full-time equivalent jobs during the peak weeks.


Participation has varied widely from state to state. Rhode Island has seen the highest participation rates, with a peak of close to 7,000 participants, or over 1,800 FTEs, in May 2009. Over 20% of unemployment insurance claims in Rhode Island were from work-sharing when the program was at its peak.

That's a lot of folks who have been able to keep their jobs, and most of their pay, during the recession. Just imagine if more states performed as well as Rhode Island. 

And it's not too late. Since employers both hire and fire workers every month, the reported jobs numbers are the net total of jobs created and lost. Work-sharing would help lower the unemployment rate by reducing the extent of layoffs.

*Source: Employment and Training Administration, U.S. Department of Labor.  Please contact CEPR if you'd like to see the data.

Comments (2)Add Comment
Work sharing scalability
written by oldParasiteSingle, January 07, 2011 9:10
I agree that work sharing is a good idea. The brutal policy skew towards cities and suburban growth has already made work sharing necessary in rural areas with 15% of GDP. The last good job I had was work sharing for state grants in 2004. That's the problem with your idea. We're already saturated with work sharing. All those good work sharing and mentoring jobs left or went to new graduates. Then the so-so ones closed down with the plants. Now there's just work sharing for Walmart and Target out here. I've given up on substitute teaching and home aid because of fuel prices. I used to do volunteer work for food or resume. The schedules: all work sharing. There's just no political will for having 100% employment as a US entitlement. We have to start there to get back up to work sharing again.
written by Insurance companies list, January 08, 2011 6:12
I just hope both parties will actually agree on this one..

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