Job Security in America: Lessons from Germany

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With the onset of the recession in 1990, job security has moved to the forefront of labor market concerns in the United States. During economic downturns, American employers rely heavily on layoffs to cut their work force, much more than do their counterparts in other industrialized nations. The hardships imposed by these layoffs have led many to ask whether U.S. workers can be offered more secure employment without burdening the companies that employ them. In this book, Katharine Abraham and Susan Houseman ...
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Overview

With the onset of the recession in 1990, job security has moved to the forefront of labor market concerns in the United States. During economic downturns, American employers rely heavily on layoffs to cut their work force, much more than do their counterparts in other industrialized nations. The hardships imposed by these layoffs have led many to ask whether U.S. workers can be offered more secure employment without burdening the companies that employ them. In this book, Katharine Abraham and Susan Houseman address this question by comparing labor adjustment practices in the United States, where existing policies arguably encourage layoffs, with those in Germany, a country with much stronger job protection for workers. From their assessment of the German experience, the authors recommend new public policies that promote alternatives to layoffs and help reduce unemployment. Beginning with an overview of the labor markets in Germany and the United States, Abraham and Houseman emphasize the interaction of various government policies. Stronger job security in Germany has been accompanied by an unemployment insurance system that facilitates short-time work as a substitute for layoffs. In the United States, however, the unemployment insurance system has encouraged layoffs and discouraged the use of work-sharing schemes. The authors examine the effects of job security on the efficiency and equity of labor market adjustment and review trends in U.S. policy. Finally, the authors recommend reforms of the U.S. unemployment insurance system that include stronger experience rating and an expansion of short-time compensation program. They also point to the critical link between job security and the system of worker training in Germany and advocate policies that would encourage more training by U.S. companies.
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Editorial Reviews

Booknews
The authors compare labor adjustment practices in the US, where existing policies arguably encourage layoffs, with those in Germany, a country with much stronger job protection for workers. From their assessment of the German experience, they recommend new public policies that promote alternatives to layoffs and help reduce unemployment. Annotation c. Book News, Inc., Portland, OR (booknews.com)
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Product Details

  • ISBN-13: 9780815700753
  • Publisher: Brookings Institution Press
  • Publication date: 5/1/1992
  • Edition description: New Edition
  • Pages: 175
  • Product dimensions: 6.03 (w) x 9.06 (h) x 0.52 (d)

Table of Contents

1 Introduction 1
Overview of the Book 8
2 Industrial Relations 11
Industrial Relations in Germany 11
Industrial Relations in the United States 30
The Effects of Institutions on Labor Market Adjustment 41
3 An Overview of Labor Market Performance in Germany and the United States 44
Macroeconomic Trends in the 1970s and 1980s 45
The Causes of High German Unemployment 49
Employment Protection Laws as a Cause of Unemployment 53
Conclusion 55
4 The Effects of Job Security on Labor Adjustment 57
Movements in Employment, Hours, and Shipments 58
Employment and Hours Adjustment 66
Short-Time Work versus Temporary Layoffs 86
Conclusion 95
5 The Distributional Effects of Labor Adjustment Policies 100
Employment Adjustment of Production versus Nonproduction Workers 101
Distributional Effects by Demographic Group 105
Conclusion 129
6 Lessons for U.S. Policy 132
Trends in U.S. Policy 133
New Directions for U.S. Policy 141
Conclusion 146
App. A: Technical Appendix to Chapter 4 148
App. B: Data Appendix to Chapter 4 154
App. C: Data Appendix to Chapter 5 158
References 161
Index 169
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