President Obama Proposes Unemployment Insurance Reforms

The plan would ensure workers have access to wage insurance that would replace half of lost wages, up to $10,000 over two years. People out of work who were making less than $50,000 and were with their prior employer for at least three years could use it to help them prepare for a new career.

President Obama in his Jan. 16 Weekly Address announced new proposals to provide workers with wage insurance, stronger unemployment insurance protections, and support for retraining to find another job. A summary posted on the White House website said they are "part of the Administration's broader push to strengthen and modernize our Unemployment Insurance system by closing holes in coverage and strengthening connections to work."

"The United States is in the midst of the longest streak of private-sector job growth in our history, with more than 14 million new jobs created during the past 70 months. Yet even as the unemployment rate has had its fastest two-year decline in thirty years – and has been cut in half overall - we have further work to do to strengthen our safety net and modernize it for a changing economy. Unfortunately, even as the economy has strengthened, fewer than one in three unemployed Americans receive unemployment insurance benefits today," it says.

There are three elements in the package he proposed:

  • Ensuring workers have access to wage insurance that would replace half of lost wages, up to $10,000 over two years. People out of work who were making less than $50,000 and were with their prior employer for at least three years could use it to help them prepare for a new career, according to the president.
  • Fixing holes in the U.S. unemployment insurance (UI) system, including by expanding coverage to part-time, many low-income, and intermittent workers and workers who leave work for compelling family reasons, as well as ensuring that states provide at least 26 weeks of coverage.
  • Making it easier for companies to avoid layoffs through work-sharing and incentivizing states to offer and allow retraining for workers on UI or to provide relocation vouchers or subsidized employment. The plan also calls for expanding intensive career counseling to the long-term unemployed, discouraged, and part-time workers.

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