I heard an interview with Steve Hill, author of Europe’s Promise, in which he said Germany’s new chancellor Merkel, is in favor of the German policy that pushes companies to reduce the number of hours employees work rather than laying them off. A little Googling and voila, a NYT description of Merkel’s first policy speech back in November:
Mrs. Merkel, who heads a new coalition of conservatives and the business-friendly Free Democrats, said the global financial crisis would result in a fundamental reshuffling as competition increased for market share, raw materials and human capital….“Without growth, no investment; without growth, no jobs; without growth, no money for education; without growth, no support for the weak,” Mrs. Merkel said….
Unemployment, now at 8.3 percent, “will rise further,” she said, and added that the government’s subsidy plan known as Kurzarbeit would be extended.
The Kurzarbeit program encourages companies to reduce the amount of hours their employees work rather than laying them off. Under the plan, companies only pay for the hours their employees work and the government compensates those whose hours are cut with an allowance covering some of the lost wages.
“Without Kurzarbeit, more jobs would have been lost,” Mrs. Merkel said.
The program has already saved 400,000 jobs, according to IAB Research Institute, which is affiliated with the Federal Labor Agency. At least 1.4 million employees are working shorter hours, according to the labor agency…
Wow.
