PI Original Adam Doster Wednesday November 25th, 2009, 11:48am

What About Work-Sharing?

With unemployment jumping
over 10 percent nationally last month and the midterm elections just a
year away, Democrats are scrambling to find new ways to buoy the
economy. In the past few weeks, a cadre of high-ranking lawmakers
have coalesced around a "job creation" ...

With unemployment jumping over 10 percent nationally last month and the midterm elections just a year away, Democrats are scrambling to find new ways to buoy the economy. In the past few weeks, a cadre of high-ranking lawmakers have coalesced around a "job creation" package, which Illinois' own Sen. Dick Durbin has been quietly writing. In a conference call earlier today, House Speaker Nancy Pelosi said her party has generated "a lot of good ideas" to stimulate the job market. Now, lawmakers who are wary of increasing the federal deficit in the near-term just need to be pushed to act. Ryan Grim has more:

The deficit debate in Washington misses the fundamental point, said House Speaker Nancy Pelosi (D-Calif.) on Tuesday, arguing that the primary objective for policy makers should be job creation -- without which, the deficit will explode as tax revenues collapse.

"The debate between deficit reduction and job creation is not a real choice, because we'll never have deficit reduction unless we have job creation. Of course we have to be sensitive to how this is paid for, but that doesn't mean we don't do it."

We've already discussed some of the most humane and stimulative ways in which the federal government could pump up the economy. One innovative approach we haven't covered is work-sharing. Pushed by economist Dean Baker, the idea is that instead of further extending unemployment benefits to provide relief to an ever-growing list of eligible individuals, the government would provide a tax credit to employers to shorten their current workers' hours (while leaving their pay unchanged) and hire additional workers to fill the resulting gaps. Baker, along with The Nation's John Nichols, recently discussed the proposal on GritTV (the relevant clip begins 6:23):

The benefits of such a proposal are pretty self-evident. More people could keep doing the jobs they've always done. Those same workers would not see a drop in their income, so consumer demand should be left unchanged, as well. That means employers would have to hire more employees to keep their outputs up. And workers would have more paid leave, which many of them desperately need.

There are some potential downsides, including the possibility that employers could hire contract workers, allowing them to take a tax credit without actually increasing employment. However, 17 states have already implemented some form of work-sharing; the Labor Department estimates those programs have saved more than 146,000 jobs this year. Not a bad track record.

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