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Alternative to Layoffs

To the Editor:

Regarding your story last week, "Paterson ... Says Budget Hole So Deep That Without Givebacks, May Need Layoffs," there is another, more creative way. There is a law on the books in New York State that provides a cheaper and better alternative. It is called, "Short-Time Compensation" or "Work Sharing Unemployment Insurance." A simple example:

Suppose, because of reduced demand, the employer of 100 workers is planning to lay off 20 of them. Instead, however, he reduces the workweek of all 100 workers by 20 percent, and the same UI benefits that would have been paid to the 20 laid-off workers are divided among the 100. Even though there would be a slight reduction in earnings of all 100 workers, none would suffer the traumatic hardship of total unemployment, the employer would maintain a balanced, skilled and productive workforce, and there would be no significant additional drain on the UI fund. ("Short-Time Compensation: A Formula for Work Sharing," Ramelle MaCoy and Martin J. Morand, eds., Elmsford, N.Y.: Pergamon Press/Work in America Institute Series, 1984)

The concept, proposed by Eleanor Homes Norton, is endorsed by the AFL-CIO and the Committee for Economic Development, because it avoids the social conflicts of seniority-based layoffs and saves jobs and money.

New York State has made it available to other employers who have used it to good effect.

MARTIN J. MORAND

Professor Emeritus, Industrial and Labor Relations, Indiana University of Pennsylvania