It can also mean significantly lower costs in the future for employers, whose unemployment insurance tax rates increase when layoffs rise. “A lot of businesses are saying this is too good to be true,” he said. “It seems like a solution to a lot of our problems.”
States and localities have themselves taken advantage of work sharing. Between May and July, 31,000 Michigan state employees took part in the program, logging in fewer hours and receiving some jobless benefits. The state said it had saved $80 million in wages.
Muskegon, a small city on the western shore of Michigan, saved $375,000 by using the program for 150 of its 235 employees.
“When the economy took a turn with the coronavirus, it was one of the few tools that cities could use to minimize the impact on their work force and hold their employees harmless in most cases,” said Dwana Thompson, who oversees employee relations for the city.
Two hundred miles to the east, Detroit enrolled 1,700 of the city’s 9,000-member work force in a work sharing program.
“This was a win-win,” said Denise Starr, Detroit’s human resource director. Given sinking tax revenues from the city’s casinos as well as income and sales tax, the only alternative would have been layoffs. The city plans to keep about 1,300 employees in the program through the end of its fiscal year in June 2021, she said.
Getting the word out to policymakers and businesses has been one of the biggest problems, said Susan N. Houseman, vice president and director of research at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich. But advertising and promotional campaigns have attracted many more participants, said Ms. Houseman, who studied successful efforts in Oregon and Iowa.
“There are huge incentives to players to use it and for states to promote it,” she said.