On Monday, I traveled to Rhode Island to visit the Pilgrim Screw Corporation with members of the state’s Congressional delegation. I toured Pilgrim’s offices and factory with Senators Jack Reed and Sheldon Whitehouse, Congressman Jim Langevin, and senior officials from the Rhode Island Department of Labor and Training, as well as Pilgrim’s President Geoff Grove and other members of the Grove family. This family-owned and operated company manufactures and sells bolts, pins, rivets and other fasteners, and employs more than 60 people across three states. Pilgrim has been in the Grove family since it was founded in 1932.
The purpose of our visit was to highlight an innovative proposal in President Obama’s American Jobs Act– a federal Work-Sharing program. Work-sharing allows employers to retain skilled workers at reduced hours when business slows down, instead of laying them off. Under the President’s proposal, employees working fewer hours would receive partial unemployment insurance benefits while maintaining part-time employment with their employer. Employees avoid being laid off, keep their skills sharp, and stay attached to the active labor force. Small businesses like Pilgrim are able to hold on to their experienced workers during tough economic times, and retain the capacity to scale up production quickly when orders increase.
Twenty states have work-sharing programs, including Rhode Island. The results have been impressive. In the Ocean State, one in every six workers in the UI system receives partial work-share benefits instead of full UI benefits. From 2007 through the middle of 2010, Rhode Island’s Work-Sharing program prevented more than 13,000 layoffs. The program helped Pilgrim avoid laying off 35 workers in their Rhode Island facility over the last several years. Similar programs in countries like Germany and Japan have reduced levels of unemployment between 0.5 and 1 percentage point.
The success of Rhode Island’s work-sharing program led Senator Jack Reed to propose federal legislation earlier this year. Senator Reed’s bill served as the basis for the work-share proposal in President Obama’s American Jobs Act. President Obama’s proposal would support all 50 states creating work-share programs. While we were on-site Monday, Geoff Grove – who’s seen the benefits of work-sharing first-hand – said it best: “The work-sharing program in Rhode Island has been a lifeline for Pilgrim. It’s helped a small manufacturing business like ours to maintain the institutional knowledge and skills that are crucial for our success.” Small businesses and workers across the country are eager to have the same opportunity Pilgrim has had.
Rhode Island’s work-share program allowed Jorge DeLeon, an employee of Pilgrim for the past 17 years, to stay on Pilgrim’s payroll when demand for the company’s products slowed down. Instead of laying him off, the company reduced Jorge’s hours by 20%, with the state UI system making up part of the difference in lost wages. After 6 months, Pilgrim restored Jorge’s full-time schedule. Pilgrim kept an experienced worker on its payroll, and didn’t have to search for a new employee when orders increased. Jorge maintained most of his wages, and stayed employed instead of joining the rolls of the full-time unemployed.
Work-sharing is only one of the unemployment insurance reforms President Obama has proposed in his American Jobs Act to transform the unemployment system into an employment and re-employment system. He has also proposed to provide tax relief to small businesses and working families, put construction workers back on the job repairing roads and bridges, and keep teachers in the classroom while modernizing schools around the country.
Small business leaders like Geoff Grove and workers like Jorge DeLeon are looking to the federal government to take action to get our economy moving again and put Americans back to work. The President sent his American Jobs Act to Congress on Monday. America’s small businesses and working families need action now.