COVID-19

Work-sharing programs allow companies to keep furloughed workers

David Wagner Jun 17, 2020
Heard on: Marketplace Morning Report
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An employee at a cafe in Los Angeles in March. Work sharing is one solution to keep people employed during the COVID-19 recession. Frederic J. Brown/AFP via Getty Images
COVID-19

Work-sharing programs allow companies to keep furloughed workers

David Wagner Jun 17, 2020
An employee at a cafe in Los Angeles in March. Work sharing is one solution to keep people employed during the COVID-19 recession. Frederic J. Brown/AFP via Getty Images
HTML EMBED:
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More than 40 million Americans have applied for unemployment benefits during this pandemic. Many businesses have shut down and laid off staff. But some economists say there’s a better way. It’s called work sharing. Only about half of states have work-sharing programs. The programs keep workers in their jobs, lets employers cut their hours and uses unemployment benefits to fill in their lost wages.

Frank Mullens is a big believer in work sharing.

“I have faith in the program, because I’ve seen it work,” he said.

He’s the chief financial officer for Los Angeles-based Marketing Innovations International. The company customizes promotional products for its clients — things like special key chains for graduation parties. Back during the Great Recession, Mullens helped enroll the company in California’s work-sharing program. And it saved jobs.

“We had four employees on that program, and all were very happy with the ability to keep their job, keep their benefits and try to get as close to full pay as possible,” Mullens said.

Now that business is down again, Mullens has gotten the company back on a work-sharing plan. California approved the company to keep 10 employees on the payroll with reduced hours. It’s a good outcome, Mullens said, but it wasn’t easy getting there. 

“That the program requires a mailed-in application was the first frustration,” he said.

California recently started taking online applications, but early on, it still required employers to apply by U.S. mail. 

UCLA economist Till von Wachter said updates to state unemployment systems could get more employers on board with work sharing. He said by cutting hours instead of cutting jobs, companies can avoid painful layoffs and save on rehiring and retraining. 

“There’s an ongoing relationship between workers and firms that would allow us to hit the ground running once the pandemic is over,” he said

But work sharing isn’t used very much. More than 200,000 workers in the United States are now getting benefits through work sharing. That is a notable jump from pre-pandemic levels. But it’s still just a tiny fraction of the tens of millions of workers who’ve applied for unemployment since the pandemic began. 

COVID-19 Economy FAQs

What’s going on with extra COVID-19 unemployment benefits?

The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.

What’s the latest on evictions?

For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.

Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?

Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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