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Obama Proposes Changes to the Way Unemployment Insurance Works

Obama Proposes Changes to the Way Unemployment Insurance Works
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Robby Berman

Robby Berman is a reporter, father, and musician who creates and discovers good stuff for the Internet world.

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President Obama recently released a proposal for modernizing unemployment insurance. It strengthens support not just for the out of work, but also people who reenter the workforce with new jobs that don’t pay as much as their previous employment.

The first thing the president proposes is a fix for unemployment as we already know it. He wants all 50 states to finally provide at least 26 weeks of unemployment insurance. Currently, there are eight states that still don’t meet this requirement: Arkansas, Florida, Georgia, Kansas, Michigan, Missouri, North Carolina, and South Carolina.

Next, in what’s likely a recognition of the growing on-demand, or gig, economy, Obama’s proposal would require states to provide unemployment benefits to some part-time workers, as well as low-wage earners.

The most novel aspect of Obama’s unemployment proposal however, is a mechanism that helps people adjust to new jobs that pay less than their old ones.  Many of the jobs added during the financial recovery don’t pay especially well, and workers on average experience a 10% pay cut when they take one of these jobs. Those leaving careers they’ve had for over 20 years wind up with an average 25% cut in pay. Experienced job seekers often choose to keep looking for work at their former pay level rather than settle for less lucrative, but available, positions.

Obama would rather see them get back into the workforce and proposes benefits that would replace half of a worker’s lost income up to $10,000 over two years. To qualify, a worker would have to have been with their prior employer for at least three years and have made less than $50,000 yearly. Obama hopes this will offer some financial stability for workers forced to change careers and begin making their way back up the ladder in a new career.

Robby Berman

Robby Berman is a reporter, father, and musician who creates and discovers good stuff for the Internet world.

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