Semi-retired president pitches proposal to "fix" unemployment insurance

What with the flurry of executive orders and foreign policy disasters coming out of the White House these days, it’s hard to keep track of all the plans which Barack Obama is proposing for his final year in office. (This, despite the fact that there’s virtually nothing on the legislative front that will actually come to fruition during a presidential campaign.) When he’s not planning the moon shot to fix cancer, though, Barack Obama has other ideas simmering away on the back burner. One of them which cropped up last week was his Saturday morning radio address topic dealing with ways to “fix” the unemployment insurance situation.

Now, if you find yourself wondering why the President would be dipping a toe in what is arguably an issue reserved for the states, you’re not alone. But that wasn’t about to stop him. (Yahoo News)

President Barack Obama on Saturday proposed changes to the U.S. unemployment insurance system that he says would offer more security to the jobless and encourage experienced workers to rejoin the workforce, even if it means taking a pay cut.

“We shouldn’t just be talking about unemployment; we should be talking about re-employment,” Obama said in his weekly radio and Internet address.

The president’s proposal would require states to provide wage insurance to workers who lose their jobs and find new employment at lower pay. The insurance would replace half of the lost income, up to $10,000 over two years. It would be available to workers who were with their prior employer for three years and make less than $50,000 in their new job.

Rather than immediately raining all over the President’s parade, I’ll start by saying that there are a couple of ideas in here worth looking at… possibly. One of the great downfalls of the Obama Recovery is that so many of the new jobs we’ve seen filled as the published unemployment rate falls are lower paying and/or part time positions. For many workers it may be better than sitting home completely unemployed, but not by much. In an ideal world we would be spurring job creation at a rate where employers would need to compete for reliable workers and wages would rise of their own accord. Sadly, that’s not the case yet and may not be for a while given national policies in place today. With that in mind, some states might want to consider some form of buffer insurance to make up for lost wages while workers look for a position closer to what they used to have. (If nothing else it’s probably still cheaper than paying them full unemployment benefits.)

But with that said, this remains a state issue and each state has to evaluate their own budgets and needs to see if such a program would work. (And more to the point, determine if it’s acceptable to the state’s residents and worth the cost to them.) The only way it’s less of an issue is if Obama somehow imagines the federal government footing the bill for these benefits all across the nation, and who does he suppose is going to pay for that? His plan also calls for mandating that states offer unemployment benefits to part-time and low-income workers, as well as fixing the minimum benefits period run for 26 weeks. Again, these things might be possible but it’s a state issue.

Unemployment insurance is far from a perfect system in most states. One of the biggest problems is that it tends to discourage people from taking part time work because when you file each week, most states immediately slash your benefits hugely if you do any paid work at all on a given day. It’s always seemed to me that it would make more sense to allow workers to do as much part time work as they can find and them simply deduct the amount they earn from their benefits up to the point where they earn the same amount as their unemployment check. This could deliver multiple benefits. For one thing, workers who are in a field with few job openings may find themselves sending out resumes for a very long time. A plan such as this might allow them to stretch their benefits out further without draining more money from the system. Further, any part time work you do might, at least in some cases, open up opportunities for a full time position to follow.

Again, this is mostly just spitballing ideas here, and they’re worth looking at. But such plans need to be done on a state by state basis and tailored to the needs of each state’s citizens, not mandated from above in a typical, one size fits all Washington solution.