One of the major overlooked problems driving our country’s jobs crisis isn’t unemployment, it’s just not having enough work. The shadow figure that stalks behind the unemployment rate issued every few weeks by the Labor Department is underemployment: people who wish for, and need, full-time work, but are only able to get part-time hours, or have gotten “discouraged” from job seeking. Including those factors, the broad measure of underemployment hovers around 12 percent.
Workers lacking full-time employment are often full-time struggling: juggling multiple part-time gigs, suffering from loss of healthcare and other social protections, and living amidst long-term joblessness across the community.
This paradox of the marginalized worker arguably makes Americans both the most overworked and underemployed people in the industrialized world. But it’s not that the underemployed just want to work more; they actually want to earn more, at a fair rate, for the work that they can get. One way to help fix this imbalance is through work-sharing. Work-sharing allows companies to distribute hours so that people work somewhat less, while ensuring that there’s still enough work to go around to prevent layoffs. There even exists an obscure federal work-sharing program that provides funding for states to put these programs in place, but many states have left the money on the table so far.
Work-sharing is a simple concept: When employers try to cut costs, shrinking the payroll is a quick way to cut back not only on wages but on fringe benefits and related taxes. Employers often make the cruel calculation to replace current workers with cheaper ones, or to reduce their hours. Work-sharing tries to reconfigure the distribution of work and employment by subsidizing employment costs in exchange for reduced work time. So people work less, but get an income supplement to help offset the impact.
With work-sharing, a worker might agree to work one less day per week and “share” the labor with co-workers so that no one is made “redundant.” A federal program launched in 2012 helps employers draw down unemployment insurance (UI) funds to compensate for the lost hours. For example, as explained in a new study by the National Employment Law Project (NELP), if a factory wants to cut its workforce by the equivalent of five employees, “Under work-sharing, the employer could instead reduce the hours of 25 employees by 20 percent, and those workers would receive a pro-rated UI payment for their one day per week of unemployment, while maintaining any existing health and retirement benefits.”
Cutting back hours typically harms workers, but what makes work-share a less painful solution is that the government subsidizes the balance. About half of states have implemented some form of this work-sharing, but now state lawmakers are approaching a year-end federal deadline to apply for funds. A bill to renew the legislation, the Layoff Prevention Act, is pending.