Job Sharing Could Help Reduce Unemployment Amid COVID-19

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Around 55 million Americans have filed for unemployment benefits since the start of the COVID-19 pandemic, eclipsing the 37 million claimants reported during the 2008 financial crisis. Although many businesses throughout the country have reopened, some employers might still have to lay off more workers due to financial constraints.

To prevent more job losses and to protect the economy from further damage, some experts have proposed a solution: job sharing.

Job sharing is a type of employment arrangement that allows two people to handle the responsibilities of one full-time position, usually on a part-time or reduced-time basis.

For example, two employees who get paid $2,000 a week for working full-time will instead have to work part-time to fill one position, each receiving $1,000 a week. Paying two employees for the price of one would allow the employer to save on costs while the workers stay employed and keep their benefits.

While some people may not be comfortable with this arrangement, RAND Corporation’s American Working Conditions Survey (AWCS) found that there are some good reasons why others might be more willing to give it a try.

Some workers would prefer to share a role with someone else instead of feeling guilty about having a job while their coworkers are furloughed or laid off. On top of this, even on reduced hours, staying employed is usually preferred over the uncertainty of unemployment. Many people also enjoy the social and supportive aspects of their jobs, which may be even more critical in times of crisis. Finally, workers whose children are currently out of school may see having fewer work hours as a benefit.

Frank Mullens, an executive at the Los-Angeles based Marketing Innovations International, says that he is a big believer in job sharing. He helped his employer enroll in California’s job-sharing program during the Great Recession, preventing four employees from getting laid off. Now that the economy is taking another downturn, the company is on a job-sharing plan once again. This time around, ten employees got to keep their jobs.

Despite the benefits it offers to both staff and employers, job sharing has never really been mainstream in the US. As of April of 2020, only 27 states had a state-run job-sharing program. By June, over 200,000 workers had received benefits through job sharing. Though this figure is a notable jump from pre-pandemic levels, this is still a tiny fraction of the millions of workers who have lost their jobs and applied for unemployment benefits since the start of the pandemic.

According to UCLA economist Till Von Wachter, updates to state unemployment systems could help get more companies on board with job sharing. Employers, meanwhile, may be able to get more employees to agree with this approach by being as transparent as possible.

There are some concerns about whether the threat of unemployment strongly influences an employee’s willingness to have their salaries and working hours reduced. However, the temporary extra unemployment benefits in the CARE package alone – a $600 weekly increase on top of state benefits – may already be enough to reduce any power that employers may have over their employees in this situation.

Suppose this power that employers have over their workforce is most significant among their lower-paid employees. In that case, the extra CARE package benefit could have a robust countervailing effect among lower-paid workers since it gives them a better outside option than what is usually associated with being laid off.

In some European countries, governments pay companies a subsidy for having “short-time work” programs that incentivize having fewer work hours rather than layoffs. This stands in stark contrast to the current unemployment insurance system in the US. In the long-term, it might be best for the US government to look into alternative employment support policies. For now, job-sharing programs are a great way to go.