Update (February 15, 2011): Work-sharing is becoming more common
across the OECD. The general pattern still appears to hold,
those countries have pushed it most aggressively have seen the
smallest increases in unemployment. The graph below has been
updated. The April jobs numbers showed the unemployment rate
rising back to 9.9 percent. While the main reason was that more
people were looking for jobs (rather than more people losing
jobs), on the current path, the unemployment rate will not fall
to normal levels any time soon. There are two ways to fix this
situation. The first one is to expand the size of the economy.
This could be done by running larger budget deficits, through
more expansionary monetary policy at the Fed, or by pushing the
dollar down to increase our net exports. In principle, all three
of these can be effective routes to boosting the economy and
expanding employment, however as practical matter, none of these
paths look very plausible politically any time soon. If we can't
reduce unemployme