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Obama proposes new unemployment insurance plan

The plan would require states to provide wage insurance to workers who lose their jobs and find new employment at lower pay.

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Carolyn Kaster/AP
President Obama speaks in Baton Rouge, La., in Thursday. After giving his State of the Union address, the president is traveling to tout progress and goals in his final year in office.
  • By Associated Press

| Washington

President Obama on Saturday proposed changes to the US 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," Mr. 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.

The proposal also would require states to make unemployment insurance available to many part-time and low-income workers, and it would mandate that states provide at least 26 weeks of unemployment insurance. Nine states fall short of the benchmark, the White House said.

The proposal comes as US businesses, outside the manufacturing sector, are experiencing strong demand and adding employees. A recent government employment report showed that employers added a net 292,000 jobs in December as the unemployment rate held at 5 percent.

Obama has begun claiming some credit for this progress, hoping to push back against Republican presidential candidates he says are talking down the economy. But the White House also has acknowledged the many jobs added since the recovery are lower paying, and many Americans continue to see no wage growth.

Obama said Saturday he believed his proposal would provide some stability for workers willing to switch careers and begin working their way up the ladder in a new field.

Experienced workers on average see a pay cut of 10 percent when they lose their jobs. Workers with more than 20 years on the job see an average 25 percent pay cut, according to the White House.

Obama's proposal will be included in the budget proposal he's set to send to Congress next month.

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