Obama Calls for 'System of Wage Insurance'

Craig Bannister | January 12, 2016
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In his State of the Union address Tuesday, Pres. Obama called for the institution of a "system of wage insurance" to ensure that people who take lower-paying jobs than they used to have won't have to change their lifestyles.

Obama likened his "wage insurance" to Obamacare, which mandates that Americans buy health insurance:

"Now, I’m guessing we won’t agree on health care anytime soon.  But there should be other ways both parties can improve economic security. 

"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.  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.  And even if he’s going from job to job, he should still be able to save for retirement and take his savings with him.  That’s the way we make the new economy work better for everyone."

Obama provided no details - such as whether this "wage insurance" would apply to professional athletes, such as Washington Redskins' backup quarterback Robert Griffin III, who earned about $3.4 million in each of his first four years in the NFL, but might be cut and signed at a lower wage by another team.

And, what about the million-dollar CEO who gets fired and has to settle for a mere six-figure salary with another company? Would this wage insurance make up the difference so he can "still pay his bills" for his gated-community mansion?

Most importantly, will Americans be forced to purchase this wage insurance just as they're required to buy health insurance?

Obama also dismissed the concept of supply-and-demand, suggesting that an increased supply of labor does not suppress wages - that's the fault of greedy businessmen:

"Immigrants aren’t the reason wages haven’t gone up enough; those decisions are made in the boardrooms that too often put quarterly earnings over long-term returns.  It’s sure not the average family watching tonight that avoids paying taxes through offshore accounts."

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