It’s too soon to know how long Germany’s current apparent economic strength will last or if it is even entirely for real.  Nonetheless, there is one interesting aspect of German employment policy that is worth considering because it appears to be working.  

Germany has the concept of “Kurzarbeit,” which literally translated means “Shortwork."  It is a program that permits companies to keep employees partially employed with the government funding some (but not all) the balance to their most recent paycheck.  This allows companies that are going through a period of difficulty to retain human capital.  Conversely it allows the employees to maintain their skills and experience and stay current in the labor market.  Put differently, the premise of the policy is that for some types of qualified jobs it is better for the government to subsidize employment than to provide unemployment benefits. 

Since I still have friends and family in Germany, I know a number of people who have benefited directly from this policy both as employers and as employees.  Based on this anecdotal evidence and on some statistics about the policy it seems to be quite effective.  Conversely, in the US we appear to have qualified people who were laid off and are finding it hard or impossible to regain employment even when hiring in their fields picks back up once they have been unemployed for more than a few months. 

Chris Dixon a while back proposed a related idea, which was for a VC firm to "guarantee” employment to top engineering talent so as to reduce the risk of joining any particular startup.  Whether through a private mechanism or a government one, I believe the general concept has merit. I suspect though that it runs deeply against basic American cultural concept and we are therefore unlikely to see much of it here.

It’s too soon to know how long Germany’s current apparent economic strength will last or if it is even entirely for real.  Nonetheless, there is one interesting aspect of German employment policy that is worth considering because it appears to be working.  

Germany has the concept of “Kurzarbeit,” which literally translated means “Shortwork."  It is a program that permits companies to keep employees partially employed with the government funding some (but not all) the balance to their most recent paycheck.  This allows companies that are going through a period of difficulty to retain human capital.  Conversely it allows the employees to maintain their skills and experience and stay current in the labor market.  Put differently, the premise of the policy is that for some types of qualified jobs it is better for the government to subsidize employment than to provide unemployment benefits. 

Since I still have friends and family in Germany, I know a number of people who have benefited directly from this policy both as employers and as employees.  Based on this anecdotal evidence and on some statistics about the policy it seems to be quite effective.  Conversely, in the US we appear to have qualified people who were laid off and are finding it hard or impossible to regain employment even when hiring in their fields picks back up once they have been unemployed for more than a few months. 

Chris Dixon a while back proposed a related idea, which was for a VC firm to "guarantee” employment to top engineering talent so as to reduce the risk of joining any particular startup.  Whether through a private mechanism or a government one, I believe the general concept has merit. I suspect though that it runs deeply against basic American cultural concept and we are therefore unlikely to see much of it here.