So-called “short-time” work is “en vogue” in Germany with even large companies such as Infineon, Daimler and Siemens making use of it. Short-time work is a state-sponsored program which allows companies to reduce the working hours of their employees with the shortfall in wages being paid by the employment office. The program is designed to prevent companies which are facing temporary economic difficulties from laying off large numbers of workers. While this program has been available for a number of years, the sheer amount of companies currently using the benefits of the program is staggering: In just a few short months, the amount of short-time workers in Germany has already reached the peak level of the 1990s.

It is election year in Germany and the government is satisfied by any measure which keeps unemployment rates as low as possible. Critical voices, however — even those inside the governing Grand Coalition — warn that short-time work is subject to abuse, allowing companies to simply take a “time-out” from high wage costs. One “suspicious” example is the German carmaker Volkswagen which, at the end of February, shifted 65,000 employees to short-time work just as Germany’s so-called “scrapping bonus” led to a boom of new car orders. This means that some customers will have to wait months for their new cars while Volkswagen’s workers have to sit at home.

In a crisis, the state should certainly give help where help is due but does this mean that we should overlook the unavoidable windfall gains arising from efforts to jump-start the market? Or should we rather prevent unacceptable abuse at the taxpayers’ expense even if it means job losses?