Back in the ’90s, the French government thought it would be great idea to force employees to work fewer hours each week (with no salary reduction) so that employers would have to hire more people. The idea was basically to use two people to do the job of one in order to reduce unemployment in the country.
While this model hasn’t worked as well as the French government hoped it would (see this paper, for instance), the Democrats are thinking that it would be great idea to spend roughly $600 million and try this in the U.S.
Senate Democrats crafting a job creation bill are considering a proposal to give money to workers who cut their hours in order to avoid layoffs.
A bill sponsored by Sen. Jack Reed (D-R.I.) would give unemployment compensation to employees who accept a reduced work schedule to allow their companies to avert layoffs or to hire more employees. Reed’s proposal for work-sharing was mentioned during the Senate Democrats’ lunch Tuesday, when Majority Leader Harry Reid (Nev.) announced that an initiative focusing on jobs would soon be a priority, Reed’s office said.
Democratic Sens. John Kerry (Mass.), Paul Kirk (Mass.) and Patrick Leahy (Vt.) have signed on as co-sponsors.
I am not even sure where to start. How can these guys think that making employees more expensive, rather than less, is going to help create jobs? This model increases the cost of labor and reduces the incentives for employers to hire people without subsidies. Also, what ends up happening, as we saw in France, is that employers don’t hire more people — employees’ work hours are reduced, but their workloads aren’t. It increases the stress of employees in the workplace and leads to the use of more sick days. Finally, employees see their salaries frozen to compensate for the increase in labor costs. Overall, it is a terrible idea.
Thanks to Brian Faughnan for the tip.