A friend of mine sent me this link about how Germany has managed unemployment during the economic downturn.
It’s a really nice article and gives me something to think about, a perfect follow-up to the article i wrote on American Airlines.
So briefly, what the German government has done to deal with the economic downturn is to offer to help companies retain employees. Rather that make cuts, and lay off workers, what German companies are encouraged to do is to keep their employees on staff, but move them to part-time work (workers get to keep their benefits).
Deceptively, for Germany this seems to have had a lot of benefits: rather than having a high unemployment rate, which in turn fuels foreclosures, which seems to fuel bank failures, the German economy has held on. Partly-employed workers are keeping up on their morgages and apartment payments, which keeps the banks solvent, and has helped avoid the banking crisis that hit much of Europe and the States.
But is this really cause and effect? Well, it depends. What were the German economic decision-makers thinking when they decided to encourage employers to retain their workers? Because 90% of the result of any seed is what the intention was when the seed was planted.
Is paying employers to retain their workers an effective strategy? It seems to have worked for Germany so far, but economists still have doubts about the long-term results:
Ministers in France and Britain said in interviews earlier this year that they were watching the German experiment nervously – and with some skepticism – to see if it would work; a failure of economic recovery during 2010 would doom it. Both countries had used short-time work programs in limited situations in the past 20 years, but had rejected the idea of a work force bailout as unaffordable.
So the German government has taken on a substantial amount of debt to fund kurzarbeit; will that work out in the long-run or not?
Depends on their intention.
If, as i hope, their intention was to benefit the workers in Germany in particular, and perhaps the world economy in general, then it seems to me that kurzarbeit is a wonderful plan. Keep people working, keep them happy, help them pay their bills and keep their benefits–those are all wonderful karmic seeds to put in your mind. And there’s nothing wrong either with thinking that companies will be able to keep their trained staffs’ expertise–i think this just helps everyone. What well-trained automotive worker wants to lose their job and then take part-time work in a grocery store? Keeping them, at least part-time on the job, benefits both the worker and the employer–a win-win, which is what karmic management is all about.
So now all they need to do is work on collecting seeds to pay off their debt…