With hiring only now beginning to pick up across the country, it’s worth looking back at the American unemployment insurance system to figure out how it can be more effective in the future. Seventeen mostly Democratic states have turned to a more proactive approach – one that uses unemployment dollars to keep people employed:

Called work sharing, or short-time compensation, the program has helped thousands of companies avoid layoffs in New York and 16 other states. This year, lawmakers in seven more states are considering bills that would authorize the widely praised approach to saving jobs.

Here’s how it works. When a business enters a slump and needs to cut payroll, it can seek state approval for a plan to reduce employees’ hours instead of cutting jobs. For example, a 20 percent reduction in the workforce could translate to a 20 percent reduction in hours, or a four-day workweek. To help employees stay afloat, the state would pay workers about half of their lost wages through the federal-state unemployment insurance program, which temporarily provides laid-off workers with a portion of their paychecks.

“Every day, workers tell me they’d rather work at least part of their regular week instead of face a layoff,” says New York Labor Commissioner Colleen Gardner. At no additional cost to states, the program helps businesses retain skilled employees, allows workers to stay on the job and keep their benefits and boosts the local economy.

Twelve of the seventeen states that offer this kind of program have Democratic-controlled legislatures. And that’s no surprise – Democratic legislators across the country have been proactive about protecting jobs ever since the recession began.