President Obama on Tuesday night called for a system of wage insurance to alleviate the problem of job loss.
Obama in his State of the Union address talked about the need for greater economic security and cast wage insurance as a policy that could complement the existing program of unemployment benefits.
Not only should laid-off workers receive unemployment insurance, Obama said, but they should also be encouraged to get training for a new job.
“If that new job doesn’t pay as much, there should be a system of wage insurance in place so that he can still pay his bills,” Obama said.
Existing wage insurance proposals involve a levy placed in addition to the unemployment insurance tax that would be used to subsidize wages for workers who were laid off and then subsequently found a lower-paying job. The idea behind the policy would be to encourage people to quickly move into new work and begin rebuilding their job skills.
The wage insurance idea is one of the few specific economic policy proposals Obama mentioned in his speech, but it is not a new one for him. He called for versions of wage insurance in the American Jobs Act legislation he backed in 2011 and in his 2012 State of the Union address.
Those calls, however, did not translate into legislative success.
