America's unemployment has been worse amid the pandemic than other countries, but Joe Biden has a plan to fix it

• The US saw a bigger spike in unemployment early in the pandemic than many other rich countries that also faced early coronavirus outbreaks.
• Work-share or short-time compensation programs allow employers to reduce a worker's hours while keeping them employed, and the worker can receive partial unemployment benefits rather than facing layoffs.
• Germany is one country that has a successful work share program; it has been effective in keeping the country's unemployment rate low amid the pandemic.
• President-elect Joe Biden plans to reform short-time compensation programs in the US, according to his campaign's website.
• The following looks at what work sharing and short-time compensation programs are, as well as a looking at job retention programs from various countries during the pandemic.

The pandemic caused a massive drop in employment in the US, with a loss of 22 million jobs between February and April. While additional economic support under the CARES Act has helped some Americans financially during this time of uncertainty, many of the programs supporting workers have expired, and others are set to end in the coming weeks.

President-elect Joe Biden has proposed to expand one program that has been successful in keeping unemployment relatively low in some other countries amid the pandemic.

Biden plans to reform short-time compensation programs in the US. Germany and some other countries have used job retention programs to help prevent massive layoffs and retain talent amid the pandemic.

Short-time compensation, or work sharing, is a state-run program that can be an "alternative to layoffs" per the US Department of Labor's website. Instead of furloughing or laying workers off, businesses reduce the hours of some of their workers. Those workers are still employed, meaning they continue to earn part of their wages. To make up for the lost hours, they also are paid partial unemployment benefits by the government.

According to Biden's campaign's website, the reform would include having every state implement and "scale-up" these programs. So far, only 27 states and DC have a short-time compensation program, although Illinois' program is not operational. According to Bloomberg, Virginia also passed legislation during the pandemic to set up its own program that will take effect next January.

The CARES Act also helped these programs out financially. The federal government completely funded all short-time compensation temporarily for states with programs. A May news release from the Department of Labor notes that this temporary support was for both those with existing and new programs. Workers benefiting from this program also were eligible for the extra $600 a week supplemental unemployment benefits from the CARES Act, per CNBC.

Job retention programs in the US and other countries

The pandemic had caused disruptions to the workforce in nearly every country, but some of the hard-hit countries were better at avoiding large layoffs.

The following chart highlights the unemployment rate over the past 12 months in nine countries. The US and Canada both had unemployment rates in the double digits in April and May. The US' rate was 10.7 percentage points higher than Germany's in April.

Some countries benefited from their job retention and short-time programs to help keep unemployment rates low. The following chart includes the share of employees that may have benefited from approved company claims for their country's job retention programs, based on the OECD's annual employment outlook report. The programs covered in this data include short-time work programs, but some countries also have wage subsidy programs.

The OECD writes, "By May 2020, [job retention] schemes supported about 50 million jobs across the OECD, about ten times as many as during the global financial crisis of 2008-09. By reducing labour costs, JR schemes have prevented a surge in unemployment, while they have mitigated financial hardship and buttressed aggregate demand by supporting the incomes of workers on reduced working time." These schemes include both programs with reduced hours and programs supporting furloughed workers.

CNN reporting notes that even despite Germany's GDP declining by 10.1% in the second quarter, which was later revised to 9.7%, the Kurzarbeit work-share program helped the unemployment rate barely change. Under this program, employees get 60% of their pay for the hours that they didn't work, according to the International Monetary Fund.

In the US, state programs did see an increase in the number of work share claims. However, these programs still made up a small percent of the unemployment benefits. For the week ending July 18, there were 413,385 unadjusted claims, compared to 12,810 last year and 1.3% of total unemployment benefits.

Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, told Business Insider the US should have more education and outreach about the programs so workers and businesses can be more aware of their advantages.

"Businesses in the US, this idea of 'Oh we're in a downturn, I'm going to try to hang on to my employees until things get better,' that's not very well socialized in this country, which is unfortunate because it can be a really excellent way for businesses, for employees, and for the overall economy to help make it through a period of weak demand," Shierholz said.

The benefits and concerns of a work share program

Shierholz said that work sharing is beneficial to employees, businesses, and the overall economy.

"By allowing people to remain connected to their job, remain employed even through periods of downturn, you are reducing the share of the labor force that faces the dire consequences of a layoff," Shierholz said.

Researchers at the Federal Reserve Bank of Cleveland wrote in a recent study that "moreover, STC is a less costly way of saving jobs than wage or hiring subsidies because STC targets the most vulnerable jobs."

Companies also get to retain their talent, which helps reduce hiring costs and keep skilled workers, according to the Federal Reserve Bank of Cleveland and Shierholz.

Per reporting from Bloomberg, one business concern amid the pandemic is that not only does this reduce the hours of people working but businesses still have to pay for medical and retirement benefits. A 2016 study by the Congressional Research Service found another concern could be the high administrative and processing costs involved because some states still filled requests by paper.