Study Prompts Chamber Push For Economic 'Stabilizer'

Brinegar says costs to the state and employers would be nominal. Brinegar says costs to the state and employers would be nominal.
INDIANAPOLIS -

The Indiana Chamber of Commerce has released a report designed to encourage legislators to create a program that would serve as a "clear stabilizer" during the business cycle. The chamber says most other states already have voluntary work share programs and one in Indiana would especially to manufacturers. Work share would allow workers to stay on the job in a reduced capacity and collect partial unemployment benefits during economic slumps.

A bill has been proposed in the Indiana House to set up a work share structure. House Bill 1014 is authored by David Ober (R-82) and co-authored by Martin Carbaugh (R-81) and Karlee Macer (D-92).

The report is a partnership between the chamber and the Indiana Department of Workforce Development was crafted by Ball State University Center for Economic Research Director Mike Hicks. The chamber says, despite bipartisan support in recent years, the program has not gained much legislative traction. Hicks says a work share program would "reduce business costs for participating firms by reducing search and hiring costs, and would stabilize families and communities. We anticipate that unemployment and earnings will suffer less volatility associated with an economic downturn. This may have longer term impacts by reducing long-term unemployment and increasing consumer spending and growth in sales tax revenues over the short run."

Work share is one of the six 2016 legislative priorities previously outlined by the chamber. The organization has been pushing for the program for years and Chamber President Kevin Brinegar says "the benefits are real and significant. Work share allows employers to maintain a skilled, trained and stable workforce, while at the same time, employees keep their jobs and benefits instead of facing unemployment and further financial uncertainty. There is no negative impact on the state's unemployment insurance fund. Instead of paying full benefits to a smaller group of recipients, a larger group of employees will receive reduced benefits."

Measures supporting its creation have received support from the Indiana AFL-CIO and big players in the private industry, such as Lafayette-based Subaru of Indiana Automotive Inc. Executive Vice President Tom Easterday, who has previously served as chair of the chamber's board of directors. In past legislative sessions, Governor Mike Pence has not been in favor of such a measure, citing a potential for abuse. Easterday tells Inside INdiana Business any new measures should include safeguards to prevent misuse.

Brinegar estimates a statewide work share program would cost up to $1.5 million annually. The chamber suggests a yearly surcharge of around $10 or $15 for Hoosier businesses currently paying into the unemployment insurance fund to cover the program.

Chamber President Kevin Brinegar says the study is important because work share is a relatively new concept throughout the country.
Subaru of Indiana Automotive Inc. Executive Vice President Tom Easterday says the time is right for a work share program.
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