Chuck Schumer, a senator from New York, wants to introduce a bill that will provide a “wage insurance” federal benefit. For example, if a worker earning $80,000 is laid off and can only find a job earning $60,000, half of that difference will be paid by the government.
The amount of the benefit could be limited to two years or a maximum of $10,000 per worker. According to Marketplace, even with these limits, the benefit would likely cost $4 billion.
While I’m in favor of federal benefits for workers in general, I’m not sure this program would be the best use of the money. It’s an interesting way to mitigate the *individual* risk of outsourcing and improvements in technology, but possibly encouraging education would be a better solution.
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{ 7 comments… read them below or add one }
It sounds like a nice political thing to do, but I agree, the money could likely be spent in a much better way…
Most of the time when you work for a company for a number of years and then get laid off especially for manufacturing you are most likely to get the same amount of pay that you did prior. Most likely you are not going to be able to be up to speed and are going to need training at your new job. I agree that this is not the best place for our money. Too high of salaries may have been one of the reasons why that the former company had to have layoffs.
Encouraging education is useless to those who cannot afford to pay for it. Or is government going to pay for education and (re)training?
What if the wage loss is due to overseas outsourcing? For instance there are a lot of software engineers who are certainly very educated in the US (some may consider me one of them). If someone in India can do my job for 1/10 the cost and that catches on in scale, is more education really going to be answer for me? I suppose maybe different education could be an answer…
I’d be more comfortable with there being an option to buy wage insurance. This is something that I would actually look into.
Hamburger: I’m no policy maker, but using the money to provide education (whether it’s in the same field or a related field for Lazy Man’s software engineers) rather than to cover the wage gap may be better in the long run.
One problem I see with this is it would take more money per employee to provide an education benefit than a wage benefit… it would probably be more expensive, or if it’s a fixed pool of money, fewer people would be able to take advantage of it.
Would participants be required to pay a premium, or would this just be another entitlement?
I’d rather let private markets take care of it, if there’s a market for it.
I saw an article somewhere (sorry no source) saying it would be paid for by employers, $20 or $25 per employee.