Obama wants wage insurance Presented by DoorDash

With Marianne LeVine and Timothy Noah

WHAT’S WAGE INSURANCE?: In Tuesday's State of the Union address President Barack Obama offered a policy fix for workers who lose their jobs and end up in worse-paying ones: wage insurance. If an American worker takes a job that pays less than the one that vanished, "there should be a system of wage insurance in place so that he can still pay his bills,” the president said.


Obama has long urged the Congress to pass some version of wage insurance, albeit with relatively limited scope. In 2011 wage insurance was included in an administration jobs bill . Another wage insurance proposal was part of a job re-training package Obama offered in his 2012 State of the Union address. (“Wage Insurance: the Next Big Thing?” The Wall Street Journal asked after that speech).

That proposal was tailored to workers aged 50 or older. Under the scheme, a worker who lost his job and found a new one that paid less was eligible for two years of wage insurance to “partially offset earnings losses.” Workers were ineligible if they made $50,000 or more in their new job.

Broader wage insurance schemes have bounced around Washington for years; the idea is often pitched as an alternative to (frequently ineffective) job retraining. The Brookings Institution has been particularly enthusiastic about the idea. Brookings economist Gary Burtless and Robert Litan, an economist formerly at Brookings who's now with the Council on Foreign Relations, have both written in favor of wage insurance. "As I conceive wage insurance," Burtless wrote in 2014, "it would provide experienced, laid-off workers with monthly or quarterly earnings supplements, compensating them for a portion of their lost wages. Assume the program insured workers for one-half of their earnings loss. An experienced laid-off worker who previously earned $800 a week who lands a new job paying only $400 would receive a regular insurance check for $200-- lifting his income to $600 a week.”

GOOD MORNING, It's Wednesday, Jan. 13 and this is Morning Shift, POLITICO's daily tipsheet on labor and employment policy. Send tips, corrections and exclusives to [email protected], [email protected], and [email protected]. Follow us on Twitter at @ politicomahoney , @ TimothyNoah1 , and @ marianne_levine

MORE FRIEDRICHS: In Tuesday’s Morning Shift we puzzled over California Solicitor General Edward DuMont’s unwillingness, at Monday’s oral argument in Friedrichs v. California Teachers Association, to dispute Chief Justice John Roberts and Justice Antonin Scalia when they suggested that a ruling for the plaintiffs wouldn’t deal much of a blow to public employee unions. A favorable ruling would likely impose right-to-work rules on public employee unions nationwide (by outlawing the fair share fees that nonmembers pay to cover their portion of collective bargaining costs). As we noted Tuesday, the U.S. has had nearly 70 years to observe the impact of state right-to-work laws on unions. These laws were passed to reduce drastically the power of labor unions, we observed, and they’ve done a pretty good job fulfilling that mission. Why didn’t DuMont say so?

But several readers wrote in to say DuMont was right not to engage the conservative justices on this question because the evidentiary burden was on the anti-union plaintiffs. DuMont’s silence reflected a strategic decision: The pro-union respondents wanted to underscore the complete absence of a factual record to argue that this case was rushed unfairly through the lower courts, where the plaintiffs sought dismissal without fact-finding. “Search the joint appendix in this case — nearly 700 pages of pleadings, docket entries, and opinions — and you won’t encounter even one piece of live testimony from union leaders or state officials,” law professor Garrett Epps wrote Tuesday in the Atlantic. “We want to hurry this case up to the high court, the challengers said; don’t slow us down with facts.”

Morning Shift is willing to believe that this strategy will help the pro-union lawyers get into heaven. We’re not convinced it did them any good in Monday’s arguments. The conservative five-member majority showed no interest in the burden-of-proof question. All DuMont’s silence did was give plaintiff attorney Michael Carvin an opening to taunt him for not demonstrating that the case threatened public sector unions. “Twenty ­five states prohibit agency fees,” Carvin said. “Read the amici. See if you can see one example of the union capitulating…. the notion that anything could happen adversely here simply doesn't square with things.”

This same Michael Carvin later strutted to a reporter’s scrum outside the courtroom and conceded the very point he’d challenged inside: A ruling for the plaintiffs, he said, “may limit their revenue somewhat.” He then offered the helpful suggestion that they might “compensate for that by being less involved in things like politics.”

UFCW ENDORSES CLINTON — WILL THE AFL-CIO?: Hillary Clinton got another union boost Tuesday when the United Food and Commercial Workers endorsed her for president.

“We are saying that Hillary provides the best vehicle for preventing a Republican presidency,” UFCW Executive Vice President Stuart Appelbaum told Morning Shift Tuesday. “People may say, in general election matchups, Bernie seems to be doing better than Hillary. But the reason we don't take that into account is that there have been no negative attacks on Bernie from the right. So his poll numbers do not reflect people going after him.”

Appelbaum thinks the UFCW endorsement may give the AFL-CIO sufficient member support to endorse Clinton in the primaries, even though it usually waits for a Democrat to secure the nomination. (The last candidate it endorsed in the primaries was Al Gore in 1999.) For the labor federation to endorse, unions representing two-thirds of the its 12 million members would have to back Clinton.

But will AFL-CIO President Richard Trumka tally the members and convene the executive board for a potential primary endorsement? Appelbaum said that’s at least possible. But we’re skeptical. Just look at UFCW’s Facebook page after yesterday’s announcement, filled with screeds from livid pro-Sanders members. Now imagine what the AFL-CIO’s Facebook page would look like if it spurned Bernie in the primary.

FIRE FIGHTERS MAY SIT OUT PRIMARIES: The 300,000-member International Association of Fire Fighters has decided to postpone its presidential endorsement. IAFF President Harold Schaitberger told POLITICO Tuesday that union leaders had resolved in May to endorse Hillary Clinton, only to discover that she lacked strong support among the rank and file. "I always believe you gotta lead, you can't just follow," he said. "But you also gotta listen to your members. And you can't lead 'em where they may refuse to go." The union may sit out the primaries, altogether, Schaitberger told POLITICO.

“Unless something changes," he added, "we're going to wait until the general election and engage in an issue information campaign." This presidential race would be the first since at least 1992, Schaitberger said, in which the IAFF withheld a presidential primary endorsement.

Member polling revealed some disaffection with both political parties. Where previously the union was about 41 percent Democrat and 44 percent Republican, with the rest identifying as independent or declining to identify, today it's about 29 percent Democrat and 35 percent Republican. "The independent ID just spiked," Schaitberger said.

The New York Times reported in October that the IAFF feared that a Clinton endorsement would divide the union. "Secretary Clinton doesn't sell well here," IAFF board member Sandy McGhee, who represents Texas and Oklahoma, told the Times. "I think the Republican attack machine, the media machine, has made sure of that."

BROWNING-FERRIS REFUSES TO BARGAIN WITH TEAMSTERS: The NLRB found that Browning-Ferris Industries refused to bargain with the Teamsters union after the company was ruled a joint employer with its staffing agency on August 27.

The refusal-to-bargain finding was a foregone conclusion after that decision, which established a more flexible joint employer standard. The unfair labor practice finding will now head to a federal appeals court, where BFI can challenge the new standard.

D.C. CITY COUNCIL CONSIDERS TWO LABOR BILLS TODAY: The District of Columbia City Council will consider two pieces of labor legislation today. The first would require janitorial or building maintenance employees working in large office buildings to receive at least 30 hour of work a week. The second would require employers in the retail or food services industry to provide their employees with their schedules 21 days in advance. In addition, the legislation would require that employees who have similar jobs receive the same hourly wage and the same eligibility for employee benefits. Employers would also need to offer existing employees more work hours before any new hires. The fun starts at 10 a.m.

COFFEE BREAK

— Amazon warehouse in N.J. fined by OSHA, from Asbury Park Press: http://on.app.com/1P8YstA

— Counties still await right-to-work ruling in Kentucky, from B.G. Daily News: http://bit.ly/1UN50lW

— Right-to-Work advocacy group ends first ad campaign in Missouri, from the Missouri Times: http://bit.ly/1N5Vl4d

— “Christie Vetoes Bill To Boost NJ Workers' Comp Atty Fees,” from Law360: http://bit.ly/1Sh4Zcl

— Chicago teacher network settles unfair labor practice allegations, from the American Prospect: http://bit.ly/1J1CFIf

— B.P. to cut 4,000 jobs, from the New York Times: http://nyti.ms/1OZTNAh

THAT’S ALL FOR MORNING SHIFT.

Follow us on Twitter Rebecca Rainey @rebeccaarainey

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