unemployment, exhibit A, Germany

You can search “unemployment in Germany” on Google.  (Big up for returning a nice time series plot.)  A comparison with unemployment in the UK —

The uptick in German unemployment from the ’08 crisis was pretty much a blip.  You often hear this attributed to “strong exports”, the “weak euro”, etc. but economic policy was at the center of German amelioration of the recessionary effects of slack demand.  The German government uses work sharing — “instead of paying out benefits to unemployed workers, it pays companies to reduce workers’ hours” — to keep jobs in people’s hands.  Since the major ill of recessions is unemployment, policies that stimulate growth don’t solve the problem if the growth is uneven, e.g. concentrated in financial or legal services.  In addition to addressing the labor market, work sharing also helps the domestic market for goods.  People hold on to their money in recessions, so the distribution of income matters.  People who already have money tend to hoard their marginal dollar — but saving a job, even at lower wages, can help someone purchase staple goods or refinance a mortgage without defaulting.

[Ed. Yes, the relationship between work sharing programs and measures of unemployment is an open econometric question… which I would love to take up at a later time…]

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