Sharing work in times of economic crisis can help in not only preserving existing jobs during a downturn, but also allow businesses to retain skilled workforces and minimise lay-offs, says a new analysis.
The analysis in the form of a book, edited by ILO researchers Jon C. Messenger and Naj Ghosheh and published by the International Labour Organisation (ILO), says if designed properly, work-sharing measure can be a “win-win-win” solution for workers, companies as well as governments.
“Workers are able to keep their jobs and even prepare for the future; companies are able not only to survive an economic crisis, but can be well-positioned to prosper when growth returns; and the costs of unemployment and, ultimately, social exclusion for governments and society as a whole are minimised,” says the authors.
The book cites the success of work-sharing as ‘a job preservation strategy’ during the 2008–09 economic crisis in Europe, especially in Austria, Belgium, France, Germany and the Netherlands.
It traces the history of the first work-sharing agreements offering monetary compensation for reduction in working time to 1891 in Germany, when during the Great Depression, a wide range of work-sharing initiatives, both industry-led and government-led, emerged both in Europe and North America.
In 1933, the US President, Franklin D. Roosevelt, to combat the impact of the Great Depression, had encouraged firms to shorten the work week to 35 hours; increase hourly wages and recognise workers’ legal right to bargain collectively.
However, “during the period of prosperity that followed the Second World War, the concept of work sharing faded into the background in all but a handful of European countries,” says the book, which notes the re-emergence of this trend in 2008–09.
It cites the example of Belgium during 2009 when various temporary unemployment measures were used by over 300,000 workers – 5.6 per cent of private wage employment. In Japan, the work-sharing measure had 84,481 firms and 2.5 million employees participating in 2009 – 3.8 per cent of private wage employment.
The book’s analysis shows that such measures helped save many jobs: 400,000 in Germany; 370,000 jobs in Japan, plus over a million jobs were saved by reductions in overtime; and approximately 100,000 jobs in Turkey were saved.
Advocating work-sharing as a tool for preserving jobs during economic downturn, the book says this can be achieved by ranging from legally-mandated reductions in the normal or standard (legal) work week in a country to collective bargaining in specific industries to the use of tax incentives (e.g., reduced payroll taxes or tax credits) provided to companies which reduce the average work week of employees, or a combination of policies.
“Work sharing is not a magic “silver bullet”. However, it can be one of a number of measures which help to promote increased employment, improved work–life balance, more sustainable enterprises and economies, and ultimately, more equitable societies”, the book concludes.