Thursday, April 22, 2010


Kurzarbeit is a term that refers to the German government's strategy for keeping unemployment in check by allowing companies to cut employees' hours. The term is a combination of kurz (short) and Arbeit (work).

(Random note: Arbeit is the root of the Japanese word アルバイト and the Korean 아르바이트.)

Here's an excerpt about Kurzarbeit from the New York Times's Economix blog:

Germany's Secrets for a Steadier Job Market (Jack Ewing)
« The German labor market has been surprisingly bulletproof during the economic downturn, outperforming the United States and already beginning to tick downward, falling to 8.5 percent in March from 8.7 percent a year earlier.

Two recent reports help explain why. The reports offer some lessons that could be applicable in the United States and other countries.

One big reason Germany has kept a lid on unemployment, already well known, is the widespread use of so-called short work — “Kurzarbeit” in German. The scheme allows companies to cut workers’ hours, with the government making up some of the lost wages.

During the first quarter of 2010, 22 percent of firms surveyed by the Ifo Institute, a Munich research organization, said they were using Kurzarbeit. Among manufacturers, 39 percent were taking advantage of it.

One reason Kurzarbeit is so popular with companies is that it allows them to hang on to skilled workers. As the Commerzbank economist Eckart Tuchtfeld points out in a note issued Wednesday, Germany’s highly specialized companies have found during previous upswings that their growth was held back by lack of highly trained people. (Germany is chronically short of engineers.)

Kurzarbeit has allowed companies to keep their work forces intact, suggesting that the German economy could be poised to snap back pretty quickly as demand recovers.

According to the Ifo survey, 34 percent of companies that are using Kurzarbeit plan to start reducing it, while only 14 percent plan to expand its use. Companies such as the automaker Daimler have already begun increasing working hours again. »