Yet policies like those in Denmark are not as effective in maintaining well-being as programs that actually prevent the job losses in the first place. Perhaps the most successful strategy, especially in recessionary times, is the idea of work-sharing. In his inaugural addresss, President Obama congratulated workers who freely chose shorter hours and lower pay in order to prevent fellow workers from being laid off during the recession. But words are one thing and actions another. Obama might have done more by actively promoting a policy initiative pioneered in Germany.
The economist Dean Baker, director of the Center for Economic and Policy Research, argues that any further economic stimuli to reduce unemployment should include Kurzarbeit, or "short work," a German policy that encourages employers to reduce hours rather than lay workers off when times are tight, by making unemployment funds available even when workers do not lose their jobs.21 Instead of cutting 20 percent of its workforce, a German company might reduce each worker's load by a day. Unemployment benefits kick in for the reduced work-time, so workers earn roughly 90 percent of their former incomes for 80 percent of the work.