A Dutch Formula Holds Down Joblessness
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The Netherlands, Germany and Austria have all relied heavily on so-called short-work programs to keep people in their jobs in the wake of the financial crisis. All three have managed to keep unemployment from soaring, but the Dutch have been particularly effective, The Wall Street Journal reported. At 3.7% in October, according to the European Union statistics office, the country's jobless rate is one of the lowest among the world's wealthy nations. After the crisis hit, the Dutch government, labor unions and employers quickly reached an agreement to begin payroll subsidies. Piet Hein Donner, Dutch Minister for Social Affairs and Employment, says the jobs measures aimed to prevent companies from having an "overreaction" to the financial crisis, laying off skilled workers they would have to rehire when the economy picked up. Some who backed the programs have doubts. Dutch Finance Minister Wouter Bos worries about the effect of state aid. "It makes it harder for the market to determine which companies should survive and which should be allowed to fail," he says. Read more. (Subscription required.)