As the COVID-19 crisis has progressed, work sharing as an alternative to layoffs has received renewed interest. Professor Katharine Abraham has long been an advocate of work sharing as a sensible response to cyclical downturns. Her Politico op-ed last month with Upjohn Institute economist Susan Houseman describes the advantages of work sharing and she has been quoted on the topic in recent stories in the New York Times (here), the Wall Street Journal (here and here) and other news outlets. Under work sharing, instead of laying off, say, 20 percent of the workforce, an employer cuts everyone’s hours by 20 percent. Workers receive 80 percent of their normal pay plus 20 percent of the unemployment insurance benefit they would have received if laid off. When demand returns, having workers already on the payroll makes it easier for employers to ramp back up. The CARES Act contained provisions intended to encourage work sharing. Twenty-six states had operational work sharing programs at the start of the COVID-19 crisis and several others have since moved to reinstate or introduce such programs. Presidential candidate Joe Biden recently endorsed the idea under the label of “employment insurance.” His position statement on the subject cites a paper by Abraham and Houseman.

headshot photo of professor katharine abraham