Europe’s Solution: Take More Time Off
While many European companies have long turned to shorter workweeks and mandatory time off in economic downturns, the idea has never really caught on in the United States. Despite reports of unpaid furloughs and wage cuts, American companies continue to rely heavily on layoffs to control labor costs. Much of this has to do with cultural differences as well as the social safety net that many European governments offer. For American employers, is one approach — layoffs versus shorter workweeks and wage cuts — better for the economy? Could it be true — as the Germans argue — that keeping more workers on the job is a good way to stimulate the economy in a recession?
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