A work-sharing policy uses the money that would otherwise go to unemployment benefits to compensate workers for part of their reduction in hours. For example, if workers have a 20 percent reduction in hours, under a work-sharing program, they might end up with an 8 percent to 10 percent reduction in take-home pay with the government making up the difference. Germany has used this policy with great success. Its unemployment rate has actually declined since the start of the downturn even though its growth has been only slightly better than ours.
Work sharing should not be an impossible leap politically. Twenty states already use work sharing as part of their unemployment-insurance system. However, the take-up rate is low because the programs are not well publicized and are overly bureaucratic. A bit of modernization and a relatively small amount of additional funding may go a long way.
This is something that could conceivably garner Republican support. Kevin Hassett, one of the top Republican economists, advocates work sharing. The German program is being pushed by a conservative government; although its origins were with a Social Democratic minister in the prior coalition government. German employers like the program because it means that they can keep skilled workers on the payroll. When demand does eventually pick up, they will only have to increase hours rather than find new workers.