Exclusively in the new print issue of CounterPunch

HOLLYWOOD AND THE CIA — Film historian Ed Rampell details Hollywood’s entangled relationship with the CIA and the Pentagon; HOUSES OF THE DEAD: Nancy Kurshan exposes the cruel human rights offenses taking place inside America’s vast gulag of Control Unit Prisons; BROTHERHOOD OF SUMMER: David Macaray charts the history of the most powerful union in the US: the Baseball Players Association; TAR SANDS COME TO AMERICA: Steve Horn explains how the Keystone Pipeline debates have diverted attention from Big Oil’s other plans to transport Alberta’s oil into the US. PLUS: Jeffrey St. Clair on CONSTITUTIONAL ENTROPY; Mike Whitney on HOW THE BANKS TARGETED BLACKS; Chris Floyd on THE RISE OF BRITAIN’S TEA PARTY; Kristin Kolb on THE NEEDLE AND THE DAMAGE DONE; Kim Nicolini on the FILMS OF WILLIAM FRIEDKIN; and Lee Ballinger on POETS VS. THE ONE PERCENT.

February 20, 2012

An Essential Part of Payroll Tax Cut Bill

The Benefits of Work Sharing

by DEAN BAKER

This week, Congress passed the Middle Class Tax Relief and Job Creation Act of 2012 that carried the essential provisions of work-sharing bills proposed by Sen. Jack Reed and Rep. Rosa DeLauro. The bill would have the federal government pick up some of the expenses associated with state work-sharing programs, thereby giving them more incentive to promote work sharing.

This is a rare victory of common sense and bipartisanship in Washington. The existing unemployment insurance system tends to encourage layoffs, since unemployed workers can typically collect benefits equal to half of their wages. Work sharing, or short-time compensation as it referred to in the bill, allows workers who had their hours reduced to receive benefits equal to half of their reduction in pay. From the standpoint of the worker, the employer, and the economy as a whole, it is likely to be a better outcome if workers can be kept on the job working shorter hours rather than being laid off.

There was support from across the political spectrum for this measure. One of the strongest proponents of work-sharing is Kevin Hassett, an economist at the American Enterprise Institute who has been an adviser to many prominent Republicans. Internationally, the conservative government in Germany is among the most enthusiastic supporters of work sharing.

Hopefully states will take advantage of the new provisions and flexibilities in the existing law to promote work sharing as aggressively as possible. Even with the economy improving, unemployment is likely to remain above normal levels for several years. Work-sharing can go far toward ameliorating the suffering.

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy and False Profits: Recoverying From the Bubble Economy.

This article originally appeared Economic Intelligence.