What would happen, if, instead of laying off employees during a business slowdown, companies instead allowed employees to share jobs? That's the concept behind a layoff aversion program that is widely credited with helping Germany survive the recent worldwide recession.
Now the U.S. government has provided some funding for states to develop these kinds of programs. In Pennsylvania, employers can reduce the hours of an entire work group and those workers can collect a pro-rated share of their unemployment benefits to help make up the difference in lost income. That's a new program here.
There are winners and losers. Society as a whole is a winner, since dislocated workers often burden social safety nets. It also doesn't help society when workers can't find jobs in their fields and are forced to work outside their skills and training. It's also helpful to companies, once they master the administrative logistics. They can incrementally restaff by simply increasing hours, rather than by going through expensive recruiting and training costs.
The losers, of course, are employees who would have kept their jobs at their full salaries. They might be drawn into the group whose hours would be cut. How these two competing scenarios would affect morale is anyone's guess. One employment lawyer I know, an advocate for employees, said she doesn't like shared work programs, because it means that everyone gets paid less.
Today two organizations, the National Employment Law Project and CLASP (policy solutions that work for low-income people) released a first in a series of reports they plan on this topic. Click here to read the summary.