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Strengthening the Safety Net for American Workers

Policy proposals by Gene Sperling simplify the benefits process and implement preemptive programs to the fall for unemployed workers.

America’s safety net for dislocated workers is in a sorry state, particularly for those who lose their jobs to trade. That’s why 309 workers in Galax, Virginia, have been protesting this week. Although they were theoretically eligible for Trade Adjustment Assistance—the federal adjustment assistance package for those who have lost their jobs due to foreign trade—only about 100 signed up for TAA’s health insurance subsidy. The others were either deemed ineligible, were unaware of the benefit, or were unable to pay the remaining 35 percent of the monthly cost for insurance premiums not covered by TAA.

The bottom line is clear: Our current system for helping workers who lose their jobs to trade is impossible to navigate and so narrowly tailored that even the people who the program was created for cannot capture many of its benefits. To ensure economic dignity for all workers—those who lose jobs to trade and otherwise—our current system of unemployment insurance, TAA, and other dislocation benefits, need to streamlined and significantly expanded.

Center for American Progress Senior Fellow Gene Sperling has proposed an effective new policy solution that will fix the broken system by setting up a universal One Stop Shop for Adjustment and Reemployment.

One Stop Shop would be a national system of centers—and a single help number such as 1-800-NEW-JOBS—that would bring all unemployment benefits together in one place and offer immediate assistance to workers who lose their jobs.

As a part of One Stop Shopping, Gene Sperling has suggested that TAA’s expand its wage insurance program to benefit all workers over 50 who lose their jobs, that the federal government universally guarantee health care between jobs until a broader system of universal healthcare is established, and that the federal government build mortgage insurance into the package of available benefits for the unemployed.

Yet a stronger safety net is not enough. We must also work on putting policies in place that preempt job loss. In his work on this issue, Sperling has also presented new policy ideas such as Community Adjustment Compacts, a Flexible Education Account, and preemptive retraining assistance.

Community Adjustment Compacts are modeled on the New Markets Tax Credit and Empowerment Zones programs, which offer business investment incentives and wage tax credits to investors who open businesses and stimulate job growth in low income urban areas. Community Adjustment Compacts make these same benefits available to those who bring business investment into communities identified as “at risk” to suffering dislocation due to trade. The Flexible Education Account is another innovative policy idea that would broaden the current Life Time Learning Tax Credit and further empower workers to seek adult education and skills building courses in order to invest in themselves before as well as after job loss.

For more reading about these ideas, please see “The Pro-Growth” Progressive by Gene Sperling, Chapter 4, as well as the following links:

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