Short-Time Compensation: Is Germany's Success with Kurzarbeit an Answer to U.S. Unemployment?

By Felter, Megan | Boston College International and Comparative Law Review, Spring 2012 | Go to article overview

Short-Time Compensation: Is Germany's Success with Kurzarbeit an Answer to U.S. Unemployment?


Felter, Megan, Boston College International and Comparative Law Review


Abstract: The recent financial crisis caused a global recession that affected the economies of both the United States and Germany. While the ranks of jobless workers expanded in the U.S. and unemployment remain high, Germany's labor market was less affected by the recession because of its success with Kurzarbeit, a work sharing program. Germany's experience with Kurzarbeit can provide the United States with useful insights to improve its own version of work sharing-short-time compensation-to better combat unemployment.

Introduction

Unemployment rates soared throughout the world during the 2008-2009 economic crisis.1 The United States and Germany were vul- nerable to the recession's impact; both countries' economies experi- enced significant downturns.2 Germany contained its unemployment problem more successfully, however, with Kurzarbeit, a work sharing pro- gram.3 The program has garnered international attention because it allows the government to supplement workers' income during tempo- rary periods of decreased demand.4 Because the German program al- lows individuals to remain employed and receive a sufficient income while working fewer hours, widespread application of a similar frame- work in the United States could prove useful in managing unemploy- ment rates.5

Part I of this Note describes U.S. and German responses to the re- cession's impact on unemployment rates, focusing on Germany's suc- cess with work sharing and noting the existence of similar short-time compensation (STC) programs in the United States. Part II juxtaposes the success of Kurzarbeit in Germany against the underutilization of STC programs in the United States, and explores why U.S. work sharing pro- grams have not achieved their full potential. Part III considers strategies, informed by Germany's experience with work sharing, to increase the United States' use of STC programs to combat unemployment.

I. Background

A. The Recession's Impact on the United States and Germany

Many countries' unemployment rates soared during and after the 2008-09 recession.6 In the United States, the unemployment rate dou- bled, rising from 5% to 10% during this two year period.7 By mid-2009, U.S. workers filed a record 6.8 million unemployment claims.8 Making matters worse, many of those filing claims faced unemployment for ex- tended periods.9 There is a growing concern that such long-term un- employment will leave some workers destitute and perpetually ex- cluded from the job market.10 In fact, in January 2012, almost 43% of jobless Americans were considered "long-term unemployed," having been out of work for at least twenty-seven weeks.11 Because the econ- omy's slow recovery has done litde to prompt employers to hire more workers,12 the unemployment rate has remained above 8% for three 13 years.

The recession battered Germany's economy to an even greater extent.14 Germany's gross domestic product (GDP) decreased by almost 7%-"a much stronger decline of GDP" than many other advanced and emerging countries experienced.15 As a major exporting country, Germany was particularly vulnerable to the recession in its service and manufacturing industries.16 Nonetheless, Germany avoided the signifi- cant increase in unemployment rates that the United States and many other countries experienced.17 While the U.S. unemployment rate jumped from 5.8% in 2008 to 10% in 2009, Germany's unemployment rate remained relatively stable at approximately 7%, increasing by only .4% during the same period.18

B. Kurzarbeit: Germany's Work Sharing Program

Kurzarbeit, meaning "short work," is a government program that allows workers facing reduced hours due to temporary instances of de- creased demand to keep their jobs and receive government funds to partially supplement their diminished income.19 Kurzarbeit exemplifies work sharing programs found worldwide, in countries such as France, Italy, Japan, Korea, and the Netherlands.20 Used in Germany during the Weimar Republic, work sharing spread to many industrial countries following World War II. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Short-Time Compensation: Is Germany's Success with Kurzarbeit an Answer to U.S. Unemployment?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.