Feature

Business columns: Saving jobs by cutting hours

By implementing a workweek-reduction program, Germany has held its unemployment rate at 7.6 percent, said Dean Baker in<em> Huffingtonpost.com.</em>

Dean Baker
Huffingtonpost.com

With unemployment at 10.2 percent “and virtually certain to rise even higher in the months ahead,” policymakers are urgently seeking ways to save jobs, said Dean Baker. Here’s “an easy and quick way” to slow the rise in unemployment. Pay workers to put in fewer hours. That’s not as crazy as it might sound.

By following this policy, Germany has held its unemployment rate at 7.6 percent, “about the same as it was before the recession.” Like Germany, the U.S. government could give employers a tax credit “to shorten their workers’ hours while leaving their pay unchanged.” Workers could put in shorter weeks or take longer vacations. This practice “could quickly put a big dent in the unemployment rate, by preserving many of the jobs that are now being lost.”

At a cost of about $20,000 per job saved, “far less than the cost per job saved through the stimulus package,” even a modestly successful workweek-reduction program “would have the same effect as adding 400,000 new jobs.” Working less is a lot better than not working at all.

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