More Proposals From "Aftershock" by Robert Reich(2011)

Other proposals by Robert Reich include a reemployment system rather than an employment system.It is a system that speeds and smooths the way for those who become unemployed to find new jobs.One piece of the reemployment system would be wage insurance.Any job loser who takes a new job that pays less than his/her former job would be eligible for 90% of the difference,for up to two years.Hopefully,after two years,many workers would have acquired enough on-the-job training to render wages nearly as high as their former ones.Wage insurance would speed the movement of laid-off workers into new jobs and save the costs of unemployment benefits and would also generate added revenues as reemployment workers began paying income taxes.

For workers who need additional skills,income support of 90% of the former wages would be provided up to a year while a worker is engaged in full-time training or education programs.Total costs for the reemployment system would be around $3 billion a year which is above the $2.35 billion that the federal government now spends.However,costs would drop as the skills of the labor force improved and the rate of long-term unemployment declined.

Any remaining shortfall in revenues would be made up by a severance tax on profitable corporations that lay off their workers.Companies would be less inclined toward layoffs if they had to pay these costs(this is done in Germany).What is needed,according to Reich,is a one-time severance tax on any layoff equal to 75% of the full cost of the laid-off workers yearly salary for all workers under the median wage,50% for all workers above it,and up to 200% of the median.Such a tax would not only give employers more incentive to keep workers on,but would also help pay for the wage insurance and skill upgrades of the reemployment system.

Reich believes tuition should be free at all public colleges and universities,and borrowers of federal loans should be required to pay a fixed percentage(10%) of their taxable earnings for the first ten years of full time work into a fund that finances public colleges and universities.After that,graduates would have no further obligations.This way,graduates who pursue low income occupations(social work,teachers,legal services) would be subsidized by graduates who pursue high-income occupations including business,finance and corporate law.

More to come in the near future.