For Immediate Release: July 6, 2011
Contact: Alan Barber, (202) 293-5380 x115
Washington, D.C.- Dean Baker, co-director of the Center for Economic and Policy Research (CEPR), released the following statement on the introduction of new work-sharing bills by Sen. Jack Reed (RI) and Rep. Rosa DeLauro (CT):
"Today Senator Jack Reed and Representative Rosa DeLauro introduced new bills to promote work sharing. Both bills would cover the full cost of the work-sharing programs for the 23 states that already have these programs in place and provide start-up funding for states that want to implement them. It would also have the Labor Department establish new rules to make the programs more user friendly.
"Senator Reed and Representative DeLauro deserve credit for pursuing the most feasible path available for reducing the unemployment rate. While it is in principle possible to generate jobs through further fiscal or monetary stimulus, neither path seems politically possible. Therefore, if we cannot create more work, the next best solution is to share the work we have.
"This can be done with very little additional government money or cost to taxpayers. Work sharing effectively takes money that would otherwise be paid out as unemployment benefits and instead uses it to partially compensate workers for shorter hours.
"There is no conservative/liberal divide on this issue. Economists and researchers from the American Enterprise Institute, the Center for American Progress and the New American Foundation have joined me in noting that work sharing is an effective policy for preventing layoffs. In Germany, the program has the full support of its conservative government. It also has the full support of the business community, which will only have to increase hours, rather than hire and train new workers, when demand picks up. As a result of policies promoting work sharing, Germany’s unemployment rate has actually fallen over the last three years, even though its growth has been weaker than growth in the United States.
"With other channels to reducing unemployment blocked, work sharing is the one remaining option. It is encouraging to see that prominent members of both chambers are trying to pursue this path."