State lawmakers can move on a number of reforms to help those workers, the report's sponsors say.
The good news is that one of those concepts is already up and running in 19 states. Work-sharing programs, also called shared work or short-time compensation programs, are currently in effect in Arizona, Arkansas, California, Connecticut, Florida, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, New York, Oregon, Rhode Island, Texas, Vermont and Washington.
North Dakota's program, enacted last year, is the most recent. It becomes effective in July and will run for one year. The programs ease the pain of full layoffs by allowing employers to lay people off for part of their work time, collecting pro-rated unemployment benefits for the balance.
Rather than lay off 20 percent of the workforce full time, for example, an employer might reduce everyone's hours by 20 percent. Without a work-sharing program, employees couldn't collect benefits for this type of partial layoff. Work-sharing allows employers to hold onto skilled employees, avoiding the expense of recruiting and training new workers, and preserving affirmative action gains. For employees, the programs avoid the devastating effects of full unemployment on both their checkbooks and their morale.
"The program is booming here," said George Wentworth of the Office of Program Policy of the Connecticut Department of Labor. "We did a little publicity last October, and we must have hit a nerve. Now we're flooded with applications. The economic problems flowing out of 9-11 were a fit for this. Employers love it."
"It's really picking up here," said Earl Hobbs, Shared Work Coordinator for the Missouri Division of Employment Security. "Employees like it because it gives them a little money. Employers like it because it helps them get back on track when business improves."
But employers can't set up work-sharing programs automatically: state legislatures must pass legislation to enable them.
California kicked off the idea by setting up its own program in 1978, and by 1982, Congress recognized the benefits of work-sharing and enacted a law (P.L. 97-248) allowing all states to try the idea. In 1997, when the federal law enabling the state programs had been on the books for about 15 years, the U.S. Department of Labor commissioned a study to see how they were doing.
The report found that employers who used the programs were satisfied with them and would use them again. In fact, many companies did so repeatedly. The programs also didn't threaten the solvency of state unemployment trust funds. But the report also found that state unemployment-security agencies didn't do all they could to publicize their programs. -- Diane Cadrain, Special to Stateline.org
