What have you always wondered about the economy? Tell Us
COVID-19

Work-sharing programs allow companies to keep furloughed workers

David Wagner Jun 17, 2020
Heard on:
HTML EMBED:
COPY
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
Heard on:
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:
COPY

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

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

Read More

Collapse

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.