Something similar seems a good idea to me, too. Example. Germany has 42 million employees and 3 million unemployeds. Reduce working hours from 40 to 37 hours per week - with reduction in salary, but probably not the full 7.5 % - and hire one new employee for every 13 employees. And there you go - no more unemployment and more leisure time for everybody. Saved unemployment benefits can be used to counter salary reduct…
And this can happen with less than a few percent friction cost?
Explaining why this will fail, let alone describing how it did indeed fail where it was tried is econ 101 material. As someone else pointed out, look up Lump of Labour fallacy.