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Work sharing helps save jobs

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By Bloomberg
Saturday, Jan. 12, 2013, 8:18 p.m.
 

WASHINGTON — Some states are adding a new twist to the old concept of unemployment insurance: Paying to keep Americans in their jobs rather than giving them cash when they lose them.

Washington state has subsidized incomes for dental technicians and plumbers while Rhode Island paid factory and health care workers when their employers could not. Almost 460,000 jobs have been saved through such arrangements since 2008, the Labor Department estimates, and federal funding approved last year has more states signing on.

Instead of dismissal notices, employees get a shortened work week, with unemployment benefits partially compensating for lost wages. Popularly known as work sharing, the program holds out the promise of fewer layoffs and less painful economic downturns. For businesses, which get to retain experienced workers, it could mean the difference between success and failure.

“It's been a godsend,” said Belinda Roberts, co-owner of Blue Crown Dental Arts in Kennewick, Wash., which credits the state's program with saving the jobs of seven trained technicians. “It's kept the doors open.”

Work share, also known as layoff aversion or short-time compensation, is part of a broad rethinking of th safety net for the unemployed. It borrows from decades-old efforts in Japan and Europe, notably Germany's “Kurzarbeit,” which dates from the 1920s. In 2009, about 3 percent of all German workers were on the program, which has been credited with saving about 235,000 full-time jobs that year.

Rhode Island is among 17 states that have had work-share programs in place for years.

Chronic long-term unemployment and a pot of federal funding approved by Congress last year have prompted more states to adopt work sharing. Twenty-five states and the District of Colombia now have versions of the programs.

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