As featured in The Wall Street Journal, Money Magazine, and more!

Wage Insurance?

This article was written by in Career and Work. 14 comments.

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.

Updated December 20, 2011 and originally published March 1, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

Email Email Print Print
About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 7 comments… read them below or add one }

avatar Saving Advice

It sounds like a nice political thing to do, but I agree, the money could likely be spent in a much better way…

Reply to this comment

avatar Allison

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.

Reply to this comment

avatar Hamburger Flipper

Encouraging education is useless to those who cannot afford to pay for it. Or is government going to pay for education and (re)training?

Reply to this comment

avatar Lazy Man and Money

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.

Reply to this comment

avatar Luke Landes

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.

Reply to this comment

avatar Jesse

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.

Reply to this comment

avatar Luke Landes

I saw an article somewhere (sorry no source) saying it would be paid for by employers, $20 or $25 per employee.

Reply to this comment

Leave a Comment

Note: Use your name or a unique handle, not the name of a website or business. No deep links or business URLs are allowed. Spam, including promotional linking to a company website, will be deleted. By submitting your comment you are agreeing to these terms and conditions.

Notify me of followup comments via e-mail. You can also subscribe without commenting.