As a way of curbing the unemployment rate, California has a "shared-work compensation" program. Under this program, a company faced with a layoff of its workers may place its entire workforce on a four-day workweek during the period of hardship. During this period of reduced workweeks, the employees collect partial unemployment benefits. When business rebounds, the firm returns to its normal five-day workweek, and the unemployment compensation benefits cease. Participation in the program must be approved by both the employer and the unions. If, however, the firm is not unionized, management has the discretion of putting the plan into effect.
a. What are the benefits of such a shared-work compensation program to
(1) The employer and
(2) The employees?
b. What disadvantages do you see in the operation of a shared-work compensation program, especially from the viewpoint of organized labor?