White House Proposes Wage Insurance

March 13, 2012 • The Hamilton Project • Employment & Wages, Economic Security


Part of yesterday’s White House announcement on new training proposals included a wage insurance provision for workers age 50 or older who obtain new, full-time employment at wages of less than $50,000.  The Hamilton Project previously released two discussion papers dealing with wage insurance that can help inform this discussion. In his paper, Jeffery Kling proposed the fundamental restructuring of unemployment insurance to a dual system wage-loss insurance and temporary earnings replacement.  The wage insurance would equal 25 percent of the difference between the old wage (up to $15 an hour) and the new wage, for up to six years. Learn more about Kling’s proposal here. As part of a series of proposed reforms to the existing UI system, Lori Kletzer and Howard Rosen advocated for a wage loss insurance program to provide an earnings supplement for those workers who become reemployed at a wage lower than the wage they earned at their previous job. Read more about Kletzer and Rosen’s proposal here.

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