Exclusively in the new print issue of CounterPunch
FATTENING WALL STREET — Mike Whitney reports on the rapid metamorphosis of new Fed Chair Janet Yallin into a lackey for the bankers, bond traders and brokers. The New Religious Wars Over the Environment: Joyce Nelson charts the looming confrontation between the Catholic Church and fundamentalists over climate change, extinction and GMOs; A People’s History of Mexican Constitutions: Andrew Smolski on the 200 year-long struggle of Mexico’s peasants, indigenous people and workers to secure legal rights and liberties; Spying on Black Writers: Ron Jacobs uncovers the FBI’s 50 year-long obsession with black poets, novelists and essayists; O Elephant! JoAnn Wypijewski on the grim history of circus elephants; PLUS: Jeffrey St. Clair on birds and climate change; Chris Floyd on the US as nuclear bully; Seth Sandronsky on Van Jones’s blind spot; Lee Ballinger on musicians and the State Department; and Kim Nicolini on the films of JC Chandor.
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 sharingor 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.