Expanding the Concept of Work Sharing

In the 1990s, the concept of “job sharing” was introduced to allow employees, an especially women with small children, to “share” the equivalent of a full-time position. Each of the employees receives a proportionate share of the salaries and benefits normally allocated for the position. On the plus side, studies have shown that the employees sharing a position are typically more productive than a single employee in the position would have been. The downsides to this sort of arrangement have become very evident, however, when there has been a lack of sufficient coordination between the employees sharing the position or between those employees and others with whom they have needed to collaborate on projects.

Early on, “work sharing” was simply synonymous with “job sharing.” But since the recession of the early 2000s, it has come to have a very distinct meaning. Federal legislation was passed that allowed the states to provide unemployment compensation to employees whose hours are being cut as a consequence of a downturn across the general economy or within a particular economic sector. So, if a company expects a 25% reduction in its operating revenues during a recession, instead of reducing its payroll by 25%, it can reduce the hours of all employees or those of especially affected groups of employees by enough to offset that loss of revenue. There are floors for the numbers of employees involved and ceilings for the reductions of hours and compensation that are allowed. Employees can apply for unemployment compensation to cover the lost hours of work. So, an employee whose hours have been cut by 25% from 40 to 30 hours per week can collect 25% of the unemployment compensation for which he or she would be eligible if he or she had been laid off. The advantages for employees are that they keep their positions, their loss of salary is somewhat mitigated, and the company agrees to fully maintain their benefits. The employees whose hours have been reduced are also eligible for grants that will allow them to pursue additional education while their work hours have been reduced. The advantages to employers are that they can maintain continuity during times of turmoil and reduce much of the added turmoil in trying to reassign responsibilities among a reduced workforce. They also do not need to train or retrain employees when their business rebounds from the downturn and their payroll expands again. For the participating states, the programs have actually produced billions of dollars in savings in unemployment compensation.

To this point, 23 states and the District of Columbia have adopted “work sharing” programs. Only seven of the 24 right-to-work states have such programs in place, whereas 16 of the 26 pro-union states have them in place.

States with Work Sharing Programs

This map is taken from the cited report from the Center for Economic Policy and Research.

Earlier this year, a “work sharing” bill was introduced in the North Carolina legislature but it has found insufficient support to move it forward, repeating a situation that has recently recurred in many of the other states that currently do not have “work sharing” programs in place. This lack of political support is surprising because these programs are among the very few things that business associations and labor unions agree on, that are seen as economically sound policies by both groups.

Although not quite half of the states have adopted “work sharing” programs, I would like to suggest that the program might be adapted to address three troubling trends in the American labor force.

First, the number of underemployed workers—that is, workers whose current positions require less training or education than that which they have already acquired—rose dramatically during the Great Recession and has been declining only incrementally during the extended recovery. Forbes recently reported on a study by McKinsey which indicted that 48% of recent college graduates may be underemployed [https://www.numbersusa.com/content/news/may-29-2013/over-half-all-american-college-graduates-are-underemployed.html 1/]. More specifically, “Six times as many graduates are working in retail or hospitality as had originally planned. In 2013, there will be 1.7 million grads getting bachelor’s degrees, meaning 120,000 of these grads will be working as waiters, retail salespeople, and baristas because it is the only work they can find.”

Second, a sub-category of the underemployed are those who have been able to find only part-time employment, either within the fields for which they have been educated or elsewhere. The bureau of Labor Statistics has calculated that in May 2013, 28.37% of  part-time workers in the United States, or more than 7,500,000 workers were employed part-time because they could not find full-time employment.

Third, among those will full-time employment, roughly 30% are now “contingent” workers—or employees provided through a staffing agency to a company to fill “temporary” needs. In 2005, these workers constituted 10% to 15% of the workforce, and by 2020, they are expected to constitute 40% of the workforce.

Several aspects of contingent staffing deserve special note. First, companies have increasingly made a practice of hiring contingent workers to fill positions for which they have an ongoing, rather than temporary, need: that is, contingent staffing is not primarily providing, as claimed, needed “flexibility” but, instead, is being used as a way to suppress labor costs and to avoid providing benefits to workers who are not, after all, even categorized as the company’s employees. Second, contingent workers and independent contractors have long been very distinct categories, but corporations have blurred those distinctions in order to gain the wage (no minimum-wage and overtime rules apply) and the tax advantages of hiring independent contractors while still asserting the greater control over work practices that they have with contingent workers. Some corporations have even taken to designating workers as “franchisees,” which represents an entirely different abuse of the tax code.

Unemployed and Underemployed

This chart is taken from the cited report from the Center for Economic Policy and Research.

All of these categories of workers are paid considerably less than they would be if they were employed in conventional full-time positions by the companies whose needs they meet. All of these categories of workers receive minimal if any of the benefits commonly associated with full-time employment—such as unemployment insurance, medical insurance, disability insurance, and pension plans. Indeed, these “working poor” now account for more of the federal “safety net” spending—specifically, Medicaid and food-stamp spending—than the chronically or permanently unemployed. For instance, it has been estimated that underpaid Walmart workers now receive more than $1 billion in federal assistance each year. This represents a very under-reported element of de facto “corporate welfare” in our current economy.

And these workplace realities are increasingly commonplace for white-collar as well as blue-collar workers. Certainly, the ever-increasing reliance on adjunct and full-time, non-tenure-track faculty in higher education reflects these trends. In fact, to the great shame of our institutions, one can easily produce evidence that higher education has been ahead of these trends, for the percentage of college and university faculty who have been contingent has been higher than the percentage of contingent workers in the overall economy for at least the last three decades.

Although these trends have, in the short term, been very good for corporate profits, stock prices, and dividends to shareholders, almost everyone seems to agree that they are not sustainable in the long-term because they are reducing the size and eroding the economic stability of the middle-class. Indeed, if much of the American working-class entered the middle-class during the 1950s and the 1960s, over the last three decades, the distinctions between the two classes have been dramatically reinforced. So if the middle-class’s sense of economic confidence has been undermined, the working class’s sense of financial security has been devastated.

So, if “work sharing” mitigates the effects of economic downturns and, as the Center for Economic and Policy Research claims, provides a “quick route back to full employment” [http://www.cepr.net/index.php/publications/reports/work-sharing-the-quick-route-back-to-full-employment], perhaps the concept might be adapted to begin gradually to address the broader reduction of employment security.

Given the number of workers who are currently underemployed or contingently employed, and given that many of these workers already require substantial public subsidies to sustain themselves at the most basic levels, it would seem to make sense that “work sharing” programs be adapted to provide unemployment and health benefits

to workers who are trying to cobble together a full-time income from several part-time positions.

One of the complaints about the Affordable Care Act is that employers will be required to provide health insurance to all employees working more than a certain number of hours. And so now, as they reduce the hours of employees to something below that threshold, they are attracting all sorts of bad publicity simply for doing what they believe is either an economic necessity or simply in their economic best interest. Perhaps the seeming onerousness of the requirement to provide employees with health care would be perceived as more manageable if the costs of providing health care were simply distributed proportionately according to an employee’s average hours per week.

The same sort of arrangement could be made for unemployment compensation.

Before computers made such calculations much easier, attempting to adapt “work sharing” in these ways would have tremendously and perhaps impossibly complicated the bookkeeping required to track these arrangements. But if computers can track millions upon millions of stock trades each day, they can certainly be used to track efficiently and accurately the benefits available to millions of workers.

Corporations will gradually be encouraged to move more work to full-time employees, or more employees to full-time work, and the economic impact of this transition will be mitigated by its being gradual.

In northeastern Ohio, where there is perhaps the greatest density of colleges and universities of any region of the state, institutions have moved not only to limit the hours tauight by individual adjunct faculty but seem to be pooling information on their adjunct faculty to insure that the institutions do not face shortfalls in adjunct faculty. The institutions involved have, of course, declined to make any comment on this situation, but I have heard administrators elsewhere rationalize this practice as insuring that the adjuncts continue to get as much work as they want or need. That’s a slick justification of what amounts to trying to have it both ways: specifically, maximizing the exploitation of this group of employees is framed as minimizing the impact of that exploitation on them.

I will close by suggesting why it is in the corporations’ best long-term interests to slow and then to start to reverse the current trends. The American Psychological Association recently released their annual study of workplace attitudes [http://www.apa.org/news/press/releases/phwa/workplace-survey.pdf]. The survey shows that all of the factors that combine to determine the degree to which employees feel valued—from salary and benefits to workload to the clarity and reasonableness of employer expectations to recognition and opportunities for advancement—reinforce to underemployed and contingent workers just how little they are valued. [See the chart on “Work Stress and Feeling Valued at Work.”] Little wonder then that a recent survey by Right Management shows that 65% of American workers are dissatisfied with their current jobs and 32% plan to seek other employment in the near future [http://www.forbes.com/sites/susanadams/2012/05/18/new-survey-majority-of-employees-dissatisfied/]. These figures suggest a tremendous deterioration in employees’ loyalty and commitment to their employers. Worse, one suspects that these percentages are markedly higher among the young, among whom there are much higher levels of underemployment and contingent employment. In effect, the workforce of the immediate future is at risk of becoming permanently disenchanted with the workplace.

We are already seeing this disenchantment in higher education, where adjunct faculty have been becoming much more militant in response to their deepening exploitation. If their concerns continue to go unaddressed, at some point—probably in the not-too-distant future—the bottom is suddenly going to drop out of what now seems to be a bottomless pool of available adjunct faculty. The failure to anticipate and adjust forthis inevitable consequence of their extended economic exploitation—to institutionally mitigate that exploitation—will have serious repercussions for many of our institutions.

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