The U.S. is taking small steps toward looking like Sweden and the Netherlands when it comes to the economic safety net. And those aren’t bad places to be, whether you’re an employer or an employee.

A recent report from the National Employment Law Project advocacy group shows many U.S. states are changing their laws on unemployment benefits to qualify for $7 billion in funding included in the stimulus package signed by President Obama earlier this year. Those state modifications amount to expanding the reach of unemployment insurance to cover more low-wage workers as well as other groups including part-time workers.

Over the past four months, 25 states have enacted unemployment insurance reforms that qualify for incentive funding, according to the National Employment Law Project.

In addition, according to the project, 21 states changed their laws to provide “extended benefits” when their unemployment rates reached 6.5 percent, helping about 1 million workers who are exhausting their state and federal benefits.

Apart from expanding the coverage and duration of jobless benefits, the stimulus package boosted weekly payments by $25. U.S. unemployment insurance checks have been paltry: The average weekly benefit in 2008 was $297, or just 35 percent of the average weekly wage.

Those payments have been part of a skimpy safety net overall in the United States. Other developed nations have had much more generous jobless benefits, with northern European countries such as Denmark, Sweden and the Netherlands among those providing the most assistance.

Such social welfare policies typically carry the price tag of higher taxes, either on corporations or individuals. Higher tax levels also have been accused of slowing economic growth. In the first quarter, both Sweden and the Netherlands saw their economies contract at a faster pace year-over-year than the U.S. economy did.

But those two nations outperformed the U.S. in another key measure of business strength earlier this year. Public relations firm Edelman’s annual trust survey found that while trust in business plunged in the U.S. and slipped worldwide last year, it rose in both the Netherlands and Sweden. (It also rose in fast-developing Brazil and China.) Just 38 percent of U.S. respondents to the survey said they trust business to do what is right, compared with 62 percent of respondents from the Netherlands and 51 percent of respondents from Sweden.

In addition, the survey found that the most trusted global companies are headquartered in Sweden. The Netherlands ranked fifth on that list, behind Germany, Canada and the U.K.

Given how important trust is among an organization’s employees and in the broader consumer population, those northern European countries and the businesses located there are well-positioned to climb out of the current global recession.

I would argue that part of the business trust in Sweden and the Netherlands has to do with the fact that citizens in those countries have a significant degree of economic security. If a firm goes out of business or someone loses a job, the ability to survive and provide for a family isn’t nearly as jeopardized as it is in the United States. In America, getting the ax hurts a lot more. And that pain likely translates into anger at companies.

If the U.S. is looking for guidance out of the current trouble, it could do worse than to follow Sweden and the Netherlands.

One of the recession’s casualties could be the further erosion of employee trust in employers, with a corresponding hit to business bottom lines.

Trust can seem esoteric, a nice-to-have. But it actually plays a major role in the economy and within a company. Just as consumer trust in a brand can make or break a retailer, employee trust can make or break a firm’s productivity and innovation. As consultant Stephen M.R. Covey has pointed out, lower trust taxes a firm through lower speed and higher cost.

Recently, there have been hints of an economic recovery in the United States. And there has been some evidence of increased employee commitment to firms, part of what might be called a Three Musketeers moment of shared sacrifice amid hard times.

But other signs point to growing cynicism toward businesses and business leaders. In January, public relations firm Edelman said that only 38 percent of U.S. respondents to its annual trust survey said they trust business to do what is right—a 20 percent drop since last year. Just 17 percent said they trust information from a company’s CEO. Both are lower levels of trust than those Edelman measured in the wakes of the Enron scandal, the dot-com bust and the September 11 terrorist attacks.

In recent months, companies have shown greater interest in furloughs, which keep employees connected to employers and can preserve morale. But the initial response to the downturn at many firms appears to have been panicked job cutting. Seventy-two percent of organizations surveyed by consulting firm Watson Wyatt Worldwide in April laid off employees or otherwise reduced their workforce.

This recession, then, has continued the disintegration of the social contract around work in America. For the past three decades or so, risk has been shifted from government and businesses to workers in the form of less-secure jobs, health care and retirement benefits. And the U.S. safety net, although bolstered under the Obama administration, remains relatively skimpy.

For companies and the country to enjoy sustainable success, it seems a new compact around work will be needed. It may not mean a return to guaranteed jobs for life, but it will probably involve a still-stronger government safety net and new efforts to rebuild trust between companies and employees.

A new report from The Conference Board research group underscores this point. The report found that trust, transparency and clear communication are vital to preserving engagement and productivity in the wake of layoffs.

“The downsizing action itself pits a management team’s interests against employees’ interests—essentially promoting an ‘us against them’ atmosphere,” report author Stephanie Creary says in a statement. “Survivors will perceive the layoffs as either fair or unfair based on the extent to which they believe the decision to layoff employees was either strategic or impulsive.”

Communications consultant Alison Davis adds that flooding employee e-mail in-boxes with sophisticated memos isn’t the answer. It’s an era of interactive media, and workers want authenticity from leaders, she said in an essay earlier this year for The Conference Board Review publication: “Employees want to hear what leaders really think and feel, not listen to carefully scripted talking points.”

Experts are predicting another jobless recovery in the wake of this recession. If companies don’t do more to rebuild their reputations among workers, we may have a trustless recovery as well.

Growing attention to furloughs in recent months suggests some companies are getting back to basics about how to treat their employees.

Reducing workers’ scheduled hours can help businesses cut costs amid the recession. But furloughs also preserve ties with employees in an old-fashioned way that may pay off today.

An April survey of U.S. companies by consulting firm Watson Wyatt Worldwide found that 17 percent had used mandatory furloughs, up from 11 percent in February. Another 4 percent expected to implement a mandatory furlough sometime in the following 12 months.

Framed as an alternative to layoffs, furloughs can play a big role in bolstering morale. That’s a point I make in a paper that will be available later this month as part of a webcast on furloughs. In the course of writing that paper, I learned that door and window manufacturer Pella has utilized mandatory and voluntary furloughs this year.

In some cases, noble intentions motivated employees. “People are saying, ‘I can afford to take some time off, because I’ve got a co-worker with young kids to feed,’ ” company spokeswoman Kathy Krafka Harkema told me. “It’s really brought out the best in people.”

In a way, furloughs are from an earlier era. They’ve been used for decades in manufacturing and in the airline industry to deal with slumping demand. But furloughs—and the ways they keep employees and firms connected through hard times—fit today’s growing recognition of the power of relationships.

Furloughs are of a piece with new corporate social networks designed to strengthen ties among co-workers and forge them with alumni, as well as with the rise of LinkedIn and Facebook as recruiting and business development tools.

I recently heard interesting comments on the significance of social networking and employer-employee bonds from Allen Stone, an HR professional with 40 years in the field. Stone said he sees the explosive growth of Twitter and the like as a consequence of younger people seeking out secure relationships. He says they often didn’t have them in their families, and now struggle to find them with employers.

“The younger generation will move around every two to three years just looking for that stability because they didn’t have it in their homes,” he says. “That’s what they’re looking for—those connections. We all look for that.”

Stone, who was laid off from a mining company this year and is looking for work, says a major challenge for companies coming out of the recession will be to restore a sense of loyalty. Companies “can’t afford the continued chaos of people leaving,” he says. “We need to get back to the basics.”

The furlough is a form of those basics. So is providing a degree of employment stability for workers, so they feel secure enough to focus on their work and inspired to put in extra effort for the firm.

Is your organization getting back to people management basics?