Germany extends cut worker payments
TEXT OF STORY
Steve Chiotakis: Over in Europe, workers in Germany have something to be thankful for. Unemployment there is still under 8 percent. That’s compared to more than 10 percent here in the U.S. And that’s thanks to a government program that pays workers if their employers have to cut working hours. Now the German government has decided to extend it through 2011, as Brett Neely reports from Berlin.
Brett Neely: The program is designed to discourage layoffs at German companies. It pays a portion of workers’ wages for up to 18 months. In return, companies don’t need to lay off highly-skilled labor, the backbone of the German economy.
Saving jobs hasn’t come cheaply. The price tab for the program for this year alone will run to nearly $8 billion. But it’s kept unemployment low, and helped Chancellor Angela Merkel win re-election in September.
With the subsidy set to expire at the end of the year, economists worried that unemployment would jump suddenly and wreck the economic recovery. One research group said the government’s decision will likely boost consumer confidence — and give retailers some holiday cheer as the Christmas shopping season begins.
In Berlin, I’m Brett Neely for Marketplace.
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