Fact Sheet: A Win-Win-Win Strategy to Avoid Job Loss
Work sharing is a voluntary and cost-equivalent alternative to traditional unemployment benefits being used in more than half of U.S. states. Because work sharing benefits the employer, the employee and the state, work sharing has broad bipartisan support and is considered a win-win-win. (1) It provides firms with: flexibility during economic downturns; the ability to retain their skilled workforce and; an opportunity to avoid turnover costs, (2) Workers are able to avoid the well documented and devastating effects associated with long term unemployment, such as: loss of income over time, loss of skills, and a loss of marketability; they would also earn higher wages than they would under traditional unemployment; and, they would retain health and retirement benefits, and (3) Work sharing reduces the number of layoffs and therefore the number of unemployed workers. Additionally, work sharing has been proven to be particularly beneficial to the manufacturing sector. According to Fitch’s ratings, “Indiana is considerably concentrated in manufacturing, particularly transport equipment”, exposing us to economic downturns. This means that the ¼ of manufacturing jobs in Indiana that depend on exports, have already, and will continue to, be directly impacted (either temporarily or permanently) by any stalling, volatility or otherwise unexpected swings in the global economy. Avoiding job losses also eases the impact on local businesses that depend on workers’ spending on goods and services. This helps in maintaining consumption through continued wages and minimizing the domino effect of secondary job losses that inevitably result from layoffs. Thus, the state is able to maintain revenues earned from taxes such as income and sales tax.