Monday, October 18, 2010

Kurzarbeit, a German compositum referring to employee retainment during times of recession

The German term Kurzarbeit is composed of the adjective kurz, meaning short, and the noun Arbeit, meaning work or employment. For an employee, Kurzarbeit means staying employed, but working for a reduced number of hours. The employer pays the salary gap (up to two-thirds), which, however, is covered by the Bundesagentur für Arbeit or Arbeitsagentur, by most Germans simply called Arbeitsamt (German Federal Employment Agency). During a downturn or short recession the advantage for all sides is clear: The employee keeps his job and often receives special training, which improves his career prospects. The company, then, has a skilled workforce ready as soon as production is taking off again. And the government can show off better-looking statistical data of unemployment. A recent article in C&EN describes how the chemical industry in Germany managed a brief period of difficult times with the Kurzarbeit program [1].

The program has frequently been praised. Of course, there also is criticism for this type of costly public subsidy and a biased support of already established businesses. What about the seeding of new innovative start-ups? For most Kurzarbeiter, though, the program worked and they are back to Vollarbeit, full-time work.

[1] Paige Marie Morse: German Industry's Special Edge. Chemical & Engineering News October 4,
2010, 88 (40), pp.20-21.

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