German hours reduction scheme saved 1.2 million jobs

 

According to the IAB Institute for Employment Research, over one million German workers benefited last year from a government scheme that provided financial support to companies that reduced workers' hours rather than laying them off.

This scheme was a result of a lesson learnt by the German government in the 2002-2003 recession, when companies floundered in the subsequent upturn due to a lack of skilled workers. Two of the well known German companies involved in the scheme are the car maker Daimler and the airline company Lufthansa.

German unemployment has faired much better in the recent slump than expected, although it is predicted that the rate of unemployment will likely rise in 2010.

 

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