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Thu Jan 14, 2016, 10:59 AM

Obama’s program for a 'new economy' includes wage insurance policy

With his time in office dwindling, President Barack Obama’s final State of the Union address was perhaps understandably short on ambitious new policy proposals. But it did include at least one idea that hasn’t received much attention from lawmakers and the media: A plan to subsidize the wages of people who move from one job to another with lower pay.

“Say a hardworking American loses his job — we shouldn’t just make sure he can get unemployment insurance; we should make sure that program encourages him to retrain for a business that’s ready to hire him,” said the president during his annual address to Congress on Tuesday evening. “If that new job doesn’t pay as much, there should be a system of wage insurance in place so that he can pay his bills."

The United States already has a limited wage insurance system in place, targeted exclusively at workers over the age of 50, and called Re-employment Trade Adjustment Assistance (RTAA). The program is intended to support older workers who lose their jobs and then re-enter the workforce by finding another job that pays less than their previous salary. For the first two years of the new job, RTAA will pay for 50 percent of the difference between the old salary and the new one.

Obama’s call for a wage insurance program was barely a throwaway line in the State of the Union, and administration officials did not respond to a request for more information about what he was proposing. In addition to specifying an age limit, RTAA in its current form only applies to workers making $55,000 or less annually in their new job. The maximum benefit a worker can receive through the program is $12,000.

http://america.aljazeera.com/articles/2016/1/13/obamas-program-for-a-new-economy-includes-wage-insurance-policy.html

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