President Barack Obama has plans to include a new wage insurance scheme that will benefit unemployed workers by giving them supplemental payments.
Workers who lost their jobs and ended up with new jobs with lower salaries can greatly benefit from this. The wage insurance payments could help uplift displaced middle-class workers after being hit financially from the global crisis which also includes those who have been affected by free trade, technological change and globalization.
Wage insurance, economists indicated, is used as a way to address falling incomes among the middle class and as another means to keep people from leaving the labor force, especially for those who have been affected by free trade and technological change.
In a statement from The White House, the wage insurance plan is said to replace half of the lost wages.
Displaced workers making less than $50,000 who were with their prior employer for at least three years would be able to leverage these resources to help them get back on their feet and on the way to.
The U.S. President's budget proposal will provide new securities for those who lost their jobs. It also includes plans to get them back to work as quickly as possible.
The proposal has not been fully approved yet as it still faces the verdict of the Republican Congress.
According to Obama's State of the Union Address, Obama made it clear that there is a need for wage insurance:
Say a hard-working American loses his job - we shouldn't just make sure that he can get unemployment insurance; we should make sure that program encourages him to retrain for a business that's ready to hire him. 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.
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