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Strengthening Unemployment Insurance |
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From Economic Policy Institute: As the most recent government data show, job growth is continuing to trend downward as unemployment edges higher. In this climate, Washington lawmakers are turning more attention to programs and proposals designed to help workers increasingly caught between the rock of protracted unemployment and the hard place of new jobs that pay less than their old ones. Among the options before Congress are bills in both Houses to modernize unemployment insurance (UI) and a Senate bill to reauthorize the Trade Adjustment Assistance program (TAA) that would expand wage-loss insurance for workers uprooted by international trade. A plan presented in congressional hearings in September by Jeffrey Kling of the Brookings Institution and the Hamilton Project has as a central feature replacement of the current UI system with individual accounts for each worker, to create a kind of personal rainy day fund that could be drawn on during periods of unemployment. With the money saved by eliminating the UI system, Kling would fund wage-loss insurance, shifting payments from the unemployed to the employed A new report issued today by the Economic Policy Institute's Agenda for Shared Prosperity analyzes the strengths and weaknesses of the current UI program and the Trade Adjustment Assistance program (TAA) in helping workers harmed by the loss of jobs through globalization. This countercyclical feature of UI is a strong plus both for the unemployed workers who receive its benefits and for the economy, as a whole, which benefits when more people have money to spend. Kling's proposal introduces further uncertainty in that the three components are untested and the costs are likely to be much higher than he estimates.
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