Newspaper article Evansville Courier & Press (2007-Current)

How Other Countries Help the Jobless Europeans Take Long-Term Approach

Newspaper article Evansville Courier & Press (2007-Current)

How Other Countries Help the Jobless Europeans Take Long-Term Approach

Article excerpt

WASHINGTON... Republican challengers routinely accuse President Barack Obama of trying to move the United States toward "socialist Europe." In terms of its experience with long-term unemployment, Obama or not, the U.S. is looking more like Europe.

But in terms of its response to the problem, a massive gulf remains between the U.S. and European institutions.

The U.S. unemployment system arose to address short-term unemployment and continues to reflect that approach.

"We built our unemployment system so that if someone gets laid off, they get benefits for 26 weeks, and that's covered the vast majority," said Alan Blinder, an economics professor at Princeton University.

But European economies have much more experience dealing with long-term unemployment and far different approaches for dealing with it.

That may be changing as the European sovereign debt crisis affects the ways countries reciprocate across borders. Already, Germany is denying jobless benefits to new Greek immigrants.

Gary Burtless, a senior fellow of economic studies at the Brookings Institution, pointed to Germany as an example of a country with a history of handling the problem as a social problem.

"Germany tries to disperse the impact of the cutback in demand over a greater number of workers, holding up the incomes of workers who otherwise would be laid off here, in the United States," Burtless said.

The German government provides incentives for companies to reduce hours for their workforces to cut costs instead of firing people.

The government pays workers to compensate for the reduction in their incomes.

Private businesses also provide payments, depending on the contract negotiated between employers and their unions.

Because of this system, Germany provides unemployment benefits of a limited length, often with the stipulation that an unemployed worker must take any legal job offer or risk a reduction or loss of his or her unemployment benefits. …

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