FRESH PERSPECTIVE SERIES
Wage insurance in an era of non-traditional work
By Susan R. Holmberg and Felicia Wong, The Roosevelt Institute WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 1 - - - is a nonpartisan effortidentify to concrete toways THE FUTURE OF WORK INITIATIVE Copyright © 2016 by the Aspen Institute the © 2016 by Copyright Foundation,Foundation, TheMarkle Peter The Foundation,Peterson G. The Pew Charitable Trusts, TheRockefeller Foundation, Brian Apple,Sheth,BlackRock, Parker, Sean and others. of a broad range of foundations,individuals, and corporate partners, including: Emanu Friedmanel J. Philanthropies, Foundation,The Hitachi Foundation, Ford The The Kresge The Future of Work InitiativeThe Work Future of is made possiblethethrough generousphilanthropic support Senator Mark Warner and Purdue University President Mitch Daniels with Co-Chairs John Bridgeland and Bruce more information Reed. For visit as.pn/futureofwork. ism which rewards fuels work, innovation, and promises a brighter future business for es and alike. workers The Initiative is drivenby leadership the Honoraryof Co-Chairs workforce. The workforce. Initiative focusedis on objectives:key two first,advance to and protect the economic interests Americans of in the independent including workforce, those in the rapidly growing on-demand and economy; second, to inspire a 21st-century capital strengthen the social contract in the midst sweeping of changes in the and workplace WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 2
is a collection independent of from works expert
PERSPECTIVE SERIES PERSPECTIVE ABOUT THE FRESH THE FRESH PERSPECTIVE SERIES authors, with editorial support from Future Initiative Work of staff. sparkingbipartisan policy discussion, andworking togetherto create help healthier a economic climate all for stakeholders.ideas The proposals and included are of those the for how to revitalize how for our social contract and restore the promise The work. of Future Initiative Work of is committed to goals the promotingof new and creative thinking, aspects theof social safetynet couldbe updated tobetter meet needs the ourof 21st century The workforce. economic landscape is changing far faster thanour systemof protectionsworkplace and benefits has been to keepable pace – requiring freshideas authors across the ideological spectrum, each presenting various how new ideas for
WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 3
By Susan R. Holmberg and Felicia Wong, Wong, and Felicia R. Holmberg Susan By Institute Roosevelt The
work
traditional traditional
of non-
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insurance Wage WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 4
INSURANCE PROPOSALS INSURANCE ECONOMY 1099 THE SOURCES THE ABOUT AUTHORS THE RIGHT FIT FOR WAGE INSURANCE WAGE FOR FIT RIGHT THE INTRODUCTION BENEFITS UNIVERSAL FOR CASE THE
HAVE WE TRIED WAGE INSURANCE BEFORE? PAST AND PRESENT WAGE APPLYING WAGE INURANCE TO
EXECUTIVE SUMMARY
PAGE 25 PAGE PAGE 24 PAGE PAGE 22 PAGE PAGE PAGE 19 PAGE PAGE 17 PAGE PAGE 13 PAGE 10 PAGE PAGE 6 PAGE PAGE PAGE 5 TABLE OF CONTENTS TABLE WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 5 ------– a trend dubbed by Jacob Hacker Hacker Jacob – a trend dubbed by 1
over the past few decades, so has economic vol economic so has decades, past few the over Income insecurity can lead to problems and crises like bad can lead to problems and crises like Income insecurity 2
This paper argues that while wage insurance may not be suitable as a long-term suitable as a long-term not be may insurance wage while This paper argues that As our economy endures seismic changes, policymakers are beginning to explore are beginning to explore policymakers changes, endures seismic As our economy The moniker “1099 economy” refers to the trend in the American labor market in American labor market in the to the trend refers “1099 economy” The moniker Abundant research demonstrates that both individuals and households have faced faced have and households demonstrates that both individuals Abundant research
Dynan, Karen E., Douglas W. Elmendorf, and Daniel E. Sichel. “The Evolution of Household Income Volatility.”SSRN Evolution of Household Income Volatility.”SSRN Sichel. “The Elmendorf, and Daniel E. Douglas W. Dynan, Karen E., Electronic Journal (2007): n. pag. Oct. 2007. Web. http://www.federalreserve.gov/pubs/feds/2007/200761/200761pap.pdf Oxford University Press, 2008. https://global.oup.com/academic/product/the-great-risk-shift-9780195335347?c c=us&lang=en& Hacker, Jacob S. “The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream.” Great Risk Shift: “The Hacker, Jacob S. AS INEQUALITY HAS MARKEDLY RISEN RISEN MARKEDLY HAS INEQUALITY AS 1 2 tial suite of policy options for helping the 1099 worker develop and maintain eco oftial suite develop helping the 1099 worker policy options for economy. nomic security in the new a number of new protections and programs, such as universal portable benefits. We benefits. portable ofnumber a universal as such programs, and protections new of recommend further research and exploration as part of insurance wage a poten assistance to workers who have lost their full-time jobs and are moving into 1099 into 1099 lost their full-time jobs and are moving have who assistance to workers of will require the development 1099 workers net for a full safety Ultimately, work. support system for 1099 workers, it could be extraordinarily helpful as transitional helpful could be extraordinarily it workers, 1099 for system support transition quickly back into the job market. But is wage insurance a useful policy idea insurance But is wage back into the job market. transition quickly reliant on 1099 employment? is increasingly that a job market for Obama elevated the idea in his last State of the Union address, wage insurance has last State of the idea in his insurance wage Obama elevated address, the Union workers it could help displaced who believe attracted the attention wonks, of policy compelling ideas to help Americans adjust to the 1099 economy. After President the 1099 economy. Americans adjust to compelling ideas to help rather than hiring full-time workers. Jobs aren’t just being replaced with lower pay just being replaced with lower aren’t Jobs rather than hiring full-time workers. non-jobs – con are essentially being replaced with what but instead are ing jobs, net security or safety tracts that come with no tenure, which companies are contracting independent workers for short-term arrangements short-term arrangements for workers companies are contracting independent which nerability. As the market restructures, relying on more independent contract work work contract independent more on relying restructures, market the As nerability. further. even these vulnerabilities to be exacerbated expect we before, than ever as the “Great Risk Shift.” as the “Great economic vul a family’s then further exacerbate which home, credit and losing one’s much greater instability in income since the 1970s much greater instability atility. atility. EXECUTIVE SUMMARY EXECUTIVE WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 6
3 ------New York York New
6 Robert Schiller, in the in Schiller, Robert 4 we shouldn’t just make sure he can he can sure just make shouldn’t we — magazine called it “the most unorthodox magazine called it “the most unorthodox Time Andrew Stettner ofAndrew Foundation called the Century 5 is undergoing a profound sea change. The Great Recession The Great sea change. a profound is undergoing
him to retrain for a business that’s ready to hire him. If that new job doesn’t pay pay him. If hire to job doesn’t that new ready a business that’s for retrain him to still of so that he can in place should be a system much, there insurance as wage bills. his pay Say a hardworking American loses his job loses his American a hardworking Say encourages that program sure should make we insurance; get unemployment said “At a time of insur wage rising economic inequality and job dislocation, said “At
President Obama’s elevation of the wage insurance idea for the new economy – in of economy the new idea for elevation insurance the wage President Obama’s � President Obama, State of � President the Union 2016 In his final State ofexpanding the for President Obama called the Union address, Wage insurance is a social insurance program designed to help displaced workers displaced workers program designed to help is a social insurance insurance Wage
https://tcf.org/content/commentary/wage-insurance-for-job-loss-not-a-silver-bullet/ 20 Jan. 2016. Web. The Century a Silver Bullet.” The Century “Wage Insurance for Job Loss-Not Foundation. The Stettner, Andrew. Foundation, pany, 11 Mar. 2016. Web. pany, 11 Mar. 2016. Web. www.nytimes.com/2016/03/13/upshot/how-wage-insurance-could-ease-economic-inequality.html?_r=0 Shiller, Robert J. “How Wage Insurance Could Ease Economic Inequality.”New York Times. The New York Times Com New York Times. The York Shiller, Robert J. “How Wage Insurance Could Ease Economic Inequality.”New http://time.com/4178408/state-union-wage-insurance/ 2016. Web. Time. Time Inc., 12 Jan. the Most Unorthodox Time Inc., “Here’s Idea from the State of the Union.” Time. Sweetland Edwards, Haley. While it technically serves called wage insurance because the source of funds is a social as an income supplement, it’s insurance program rather than a transfer program (Wander 2016). THE AMERICAN ECONOMY AMERICAN THE 5 6 3 4 ance makes a great deal ofance makes sense.” of proposals.” the president’s it “the most provocative tary by journalists and policy wonks. journalists and policy wonks. tary by ofState the from idea “curveball.” a and Union” the Times, not only the State ofnot only – led to a flurry the Union but also his final budget of commen social safety net to include wage insurance: net to include wage social safety come downsizing” that can have long-term effects on workers’ economic security. economic workers’ on effects long-term have can that downsizing” come of effects insur disincentive the unemployment can also alleviate insurance Wage effects ance and soften the macroeconomic of aggregate job loss. menting income loss for low and middle-income workers who have lost one job and have who middle-income workers and low menting income loss for of the effects can help alleviate insurance wage “in pay, are taking another at lower transition quickly into their next job with minimal economic disruption. By supple economic disruption. By job with minimal next into their transition quickly No one knows exactly what the future economy will look like, but it is clear that some will look like, the future economy what exactly one knows No will be displaced. workers of income volatility and worker anxiety. Will there be jobs? Will they pay enough? In pay they be jobs? Will there Will anxiety. ofworker and income volatility replace us? Will robots ultimately work? can people find sectors and industries what and its anemic recovery, coupled with the continuation of coupled with the continuation trends in longstanding and its anemic recovery, normal into a new calcified have and technological innovation, global competition INTRODUCTION WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 7 “Jobs aren’t just aren’t “Jobs being replaced paying with lower which is what jobs, insurance wage to is designed they to; respond being replaced are are with what non- essentially as workers jobs, through hired are that contracts with no come or security, tenure, net.” safety ------8 , 7 To critics and those concerned about the 1099 trajectoryAmerican labor in the To Proponents of argue that these arrange arrangements these contractual work The term “gig economy” refers to the host of to the refers “gig economy” The term all are arising, that jobs short-term What is problematic about the current, technology-based discussion of about the current, technology-based What is problematic in wage The earlier wage insurance discussion of discussion insurance wage earlier The to response as a was borne 1990s the chives/2014/0314friedman.html Friedman, Gerald. “The Rise of the Gig Economy.” March/April 2014. Web. http://dollarsandsense.org/ar March/April 2014. Web. Rise of the Gig Economy.” Friedman, Gerald. “The Kaufman, Micha. “The Gig Economy: The Force That Could Save the American Worker?” Wired. Web. http://www. Could Save the American Worker?” Wired. Web. Force That Gig Economy: The Kaufman, Micha. “The wired.com/insights/2013/09/the-gig-economy-the-force-that-could-save-the-american-worker/ 8 7 in a long history of weakening worker bargaining power. A shift to a U.S. labor force labor U.S. shift to a A bargaining power. in a long history of worker weakening made up of create much greater economic insecurity for a majority 1099 jobs would market, this trend is less an exciting moment of this trend is less an exciting market, innovation and market technological another step and more a function of to minimize their costs, ways companies finding more Americans can loosen the shackles ofshackles the loosen can Americans more becoming by market job traditional the entrepreneurs. lowing employees to face competitive bidding amongst different businesses for one’s for one’s businesses different bidding amongst to face competitive employees lowing more and proponents argue, broadening technological access, ever With services. ments allow more flexibility and free employees from the company-specific labor from the company-specific and free employees more flexibility ments allow instead al dynamics, depends on internal company advancement where markets no tenure, security or safety net. security or safety no tenure, which is what wage insurance is designed to respond to; they are being replaced with to; they is designed to respond insurance wage is what which are hired through contracts that come with workers as non-jobs, are essentially what contracting independent workers for short-term arrangements rather than hiring arrangements short-term for contracting independent workers jobs, paying just being replaced with lower aren’t Jobs as regular employees. workers coordinated by a mobile app. The 1099 economy is a similar idea but has a wider but has idea similar is a 1099 economy The app. a mobile by coordinated companies are in which American labor market the trend in the to scope; it refers what is not being addressed in the current wage insurance discussion is the looming discussion is the insurance wage is not being addressed in the current what specter of the “gig” or “1099” economy. ships between workers and employees, a landscape that does not necessarily consist a landscape that does not necessarily and employees, workers ships between of In other words, jobs that are the basis of the traditional proposals. insurance wage logical changes we are seeing (though technology is not the only cause) is that it is cause) is that technology is not the only are seeing (though we logical changes landscape of new and relation entirely an arrangements work propelling us toward ing. Wage insurance is very specifically tailored to helping workers transition from a a from transition workers to helping tailored specifically very is insurance Wage ing. one of of the most striking effects Yet, one. the techno job to a lower higher paying surance is that it does not recognize the fact that the very definition of definition recognize the fact that the very is that it does not surance jobs is chang clude how products are manufactured and services are provided in a new, rapid fire rapid in a new, servicesmanufactured and products are provided are clude how groceries shop for we from the way everything that is transforming digital economy our finances. and manage access transportation we to how worker displacement due to trade globalization and the rapid trend of the rapid trend globalization and due to trade displacement worker outsourcing of discussions displacement in worker today’s with those trends, Along jobs abroad. WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 8 “We find that, find that, “We while wage not may insurance be suitable as a supportlong-term 1099 for system it could workers, be extraordinarily helpful as transitional to assistance who have workers lost their full- time jobs and are 1099 into moving work.”
9 ------
culated; draws conclusions about the efficacy draws of those programs; the basic specifications of proposals being cir insurance wage the current and volatility associated with working in the 1099 economy, while providing providing while in the 1099 economy, associated with working and volatility ofsome examples policy solutions being proposed to deal with these trends; and policies, wage-insurance designed Canada and the U.S. stances in which The third section, Past and Present Wage Insurance Proposals, describes Proposals, Insurance Wage Present Past and The third section, The second section, Have We Tried Wage Insurance Before?, details two in two details Before?, Insurance Wage Tried We Have section, second The The first section, The Case for Universal Benefits, describes the insecurity Benefits, Universal for The first section, The Case We find that, while wage insurance may not be suitable as a long-term support suitable as a long-term not be may insurance wage while find that, We As we consider both wage insurance and the broad transformation of broad transformation and the insurance both wage consider American the As we Just how many people are currently impacted by the 1099 economy? While esti While the 1099 economy? by impacted people are currently many how Just
1995-2015. Working paper. Princeton University, 29 Mar. 2016. Web. https://krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws_-_march_29_20165. pdf The Rise and Nature of Alternative Work Arrangements in the United States, Rise and Nature of Alternative Work Katz. The F. and Lawrence Krueger, Alan B., OUR ANALYSIS CONSISTS OF THE FOLLOWING SECTIONS: FOLLOWING THE OF CONSISTS ANALYSIS OUR 9 in the new economy. in the new further research and exploration offurther research and exploration of as part insurance wage of a suite potential and maintain economic security develop helping the 1099 worker policy options for mately, a full safety net for 1099 workers will require development of will require development of a number 1099 workers net for full safety a mately, We recommend portable benefits. as universal such protections and programs new system for 1099 workers, it could be extraordinarily helpful as transitional assistance it could be extraordinarily 1099 workers, for system Ulti into 1099 work. are moving lost their full-time jobs and have who to workers help 1099 workers. That is the objective of wage That is the objective whether explore this policy note – to help 1099 workers. in the 1099 economy. social insurance could provide insurance economy, we should ask ourselves whether wage insurance would be a useful policy to be a useful policy would insurance wage whether should ask ourselves we economy, efits often tied to full-time employment – medical benefits, retirement savings, paid savings, retirement benefits, – medical employment full-time to tied often efits compensation. workers off and illnesses, vacation and days for is a jump of over 56% in ten years and represents an increase ofincrease an represents and of jump workers. a million is years ten in 56% 9.4 over are losing out on a host ofworkers that more and more This trend means social ben of workers engaged in alternative work arrangements – both 1099 relationships and 1099 relationships – both arrangements work of in alternative engaged workers in 2015, which in 2005 to 15.8% from 10.1% W2 relationships – rose certain contingent mates vary, economists Lawrence Katz and Alan Krueger found that the percentage percentage that the found Krueger Alan and Katz Lawrence economists mates vary, American families, who would be left unable to penetrate the existing system of system existing the penetrate unable to be left so would who families, American job settings. through traditional offered primarily cial insurance WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 9 - 1099 economy. prescribe for the 1099 economy would not provide a consistent, long-term not provide would the 1099 economy prescribe for career of a potential it could but over contract jobs, device income smoothing transitioning into the disruption ofbe a crucial means for work contingent the on debate policy the in explored and be considered therefore should and likely not a beneficial policy choice for 1099 jobs; policy choice not a beneficial likely from traditional transition to help workers tool can be a powerful surance that we insurance transitional wage the believe We life. jobs to a 1099 work the concept of wage insurance to the contract jobs landscape – an idea we call ofthe concept an idea we jobs landscape – to the contract insurance wage of the limitations also discuss income insurance the We “income insurance.” is it of that, because idea, concluding effects, disincentive the problematic The final section, The Right Fit for Wage Insurance, concludes that wage in that concludes Insurance, Wage for The Right Fit The final section, The fourth section, Applying Wage Insurance to the 1099 Economy, applies Economy, to the 1099 Insurance Wage Applying section, fourth The
WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 10 “Not only does this mean that experiencing we’re disparities vast and in wealth but it also income, means Americans a feeling are sense of economic of not insecurity, knowing whether forthcoming will income and be steady consistent.” ------Katz and Katz 14 Income in 13
– a trend dubbed by Jacob Hacker Hacker Jacob – a trend dubbed by 11
in the midst ofto – our eco – and is connected
Not only does this mean that we’re experiencing vast vast experiencing does this mean that we’re only Not 10 According to Hacker, family incomes (ofincomes family 25 ages working Hacker, to According 12
THE CASE FOR CASE THE UNIVERSAL BENEFITS UNIVERSAL
As the market restructures, including more independent contract work than ever than ever including more independent contract work restructures, As the market As inequality has markedly risen over the past few decades, so has income volatili decades, the past few risen over As inequality has markedly 1 Alvaredo, Facundo, Anthony B. Atkinson, Thomas Piketty, and Emmanuel Saez. 2013. “The Top 1 Percent in International Top Emmanuel Saez. 2013. “The Piketty, and Atkinson, Thomas Alvaredo, Facundo, Anthony B. and Historical Perspective.” Journal of Economic Perspectives 27(3):3-20. and Historical Perspective.” http://krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws_-_march_29_20165. pdf 1995-2015. Working paper. Princeton University, 29 Mar. 2016. Web. The Rise and Nature of Alternative Work Arrangements in the United States, Rise and Nature of Alternative Work Katz. The F. and Lawrence Krueger, Alan B., Universal Insurance: Enhancing Economic Security to Promote Opportunity. Publication no. 2006-07. Publication no. Universal Insurance: Enhancing Economic Security to Promote Opportunity. Hacker, Jacob S. The Brookings Institution, Sept. 2006. Web. The http://www.hamiltonproject.org/assets/legacy/files/downloads_and_links/Universal_Insurance_Enhancing_Eco nomic_Security_to_Promote_Opportunity.pdf Oxford University Press, 2008. https://global.oup.com/academic/product/the-great-risk-shift-9780195335347?c c=us&lang=en& Hacker, Jacob S. “The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream.” Great Risk Shift: “The Hacker, Jacob S. Dynan, Karen E., Douglas W. Elmendorf, and Daniel E. Sichel. “The Evolution of Household Income Volatility.”SSRN Evolution of Household Income Volatility.”SSRN Sichel. “The Elmendorf, and Daniel E. Douglas W. Dynan, Karen E., Electronic Journal (2007): n. pag. Oct. 2007. Web. http://www.federalreserve.gov/pubs/feds/2007/200761/200761pap.pdf THE 1099 ECONOMY HAS DEVELOPED HAS ECONOMY 1099 THE 13 14 12 10 11 alternative work arrangements, defined as temporary help agency workers, on-call workers, as temporary defined help agency arrangements, work alternative and independent contractors or freelancers. contract workers, workers, ar work of in these alternative that the percentage engaged found Krueger workers data which can be compared to the 2005 BLS data. Their 2016 paper presents the can be compared to the 2005 BLS data. Their 2016 paper presents data which of number rise in the a notable documenting call they what ofresults this survey, economists Lawrence Katz and Alan Krueger recently conducted the RAND-Prince recently Alan Krueger and Katz economists Lawrence version of that offers a the CWS – effectively (RPCWS) Survey Worker ton Contingent rent Population Survey (CWS) since 2005 – more than a decade’s gap in the agency’s gap in the agency’s since 2005 – more than a decade’s (CWS) Survey rent Population However, in the U.S. arrangements work primary contingent tracking data source for before, we expect these vulnerabilities to be exacerbated even further. The Bureau of The further. even exacerbated these vulnerabilities to be expect we before, to the Cur Supplement Worker Contingent Labor Statistics has not conducted the then further exacerbate a family’s economic vulnerability. economic vulnerability. a family’s then further exacerbate to 61) have become over twice as unstable since the 1970s. Volatility is highest for is highest for Volatility since the 1970s. twice as unstable over become to 61) have hold less education. who those and for African-Americans, for women, which home, bad credit and losing one’s like security can lead to problems and crises much greater instability in income since the 1970s much greater instability in income since Shift.” Risk “Great the as ty. Abundant research demonstrates that both individuals and households have faced and households have Abundant research demonstrates that both individuals ty. of economic insecurity, of income will be steady forthcoming of whether not knowing economic insecurity, and consistent. fore the Great Depression. fore a sense are feeling Americans but that also means and income, disparities in wealth nomic inequality crisis. According to economists Thomas Piketty, Emmanuel Saez, Piketty, to economists Thomas According nomic inequality crisis. as just be economic inequality now almost as much have we and their colleagues, WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 11 “These arrangements suggest the need an urgent for about conversation retrofit to how safety our existing - which net system so.” relies ------Other exam Other 17
16 Additionally, it should be noted that be noted that it should Additionally, 15
Other portable benefits tie protections to work by either encouraging or requir work portable benefits tie protections to Other The most familiar example of a portable benefit established without employers, example ofThe most familiar a portable benefit established without employers, What would this kind of safety net entail? The developing conversation prescribes this kind of conversation What would net entail? The developing safety What this trend means is that more and more workers, because they are legal are they because workers, more and more is that means trend this What 2016. Web. 2016. Web. https://tcf.org/content/report/protecting-workers-patchwork-economy/ Schmitt, Mark, and Shayna Strom. Protecting Workers in a Patchwork Economy. Rep. The Century The Foundation, 7 Apr. Rep. Schmitt, Mark, and Shayna Strom. Protecting Workers in a Patchwork Economy. Big Economic Benefit to Obamacare That Isn’t Getting Much Atten A Big Economic Benefit to Obamacare “Dean Baker: There’s Julie. Verhage, http://www.bloomberg.com/news/articles/2015-08-07/dean-baker-there-s-a-big-economic-benefit-to- obamacare-that-isn-t-getting-much-attention Bloomberg. Bloomberg L.P., 17 Aug. 2015. Web. tion.” Bloomberg. Bloomberg L.P., 15 From 14.2 million in 2005 to 23.6 million in 2015. 16 17 different employers. Through unions as a conduit, construction workers earn a mul workers Through unions as a conduit, construction employers. different benefits, but administered across multiple employers rather than a single employ across multiple employers but administered benefits, often workers as construction example, us one provides The construction sector er. multiple for sometimes simultaneously, the course of jobs over the year, several have ing multiple different businesses to pay a part of businesses to pay ing multiple different the cost of the benefits provided or -funded is more akin to traditional employer-provided This their workers. for citizen with a regular sum ofcitizen with a regular sum their income. to supplement with which money ples include proposals for creating publicly funded and distributed 401k plans, and 401k plans, funded and distributed creating publicly ples include proposals for American every provide would which basic income (UBI), the more radical universal ing those who did not want to be tied to their full-time jobs for the sole purpose of the to be tied to their full-time jobs for did not want ing those who for less time. and elsewhere work to health care benefits the flexibility through the state, is the Affordable Care Act. Economist Dean Baker argues that the Economist Dean Baker Act. Care Affordable is the through the state, allow voluntary in part-time employment uptick Act has spurred a Care Affordable lish benefits that can be provided across employers.” across lish benefits that can be provided with them from job to job, including when workers hold multiple jobs at once. Shay hold multiple jobs at once. workers including when with them from job to job, portable benefits as benefits “not connected categorize na Strom and Mark Schmitt but estab employers involve programs that at all; or through or the employer to work “portable benefits” for workers, which are available to all workers and can be carried workers to all available which are workers, for “portable benefits” conversation about how to retrofit our existing safety net system – which relies so – system net safety existing our to retrofit how about conversation and insecure workforce. a more transient - for support on employer heavily risks that individuals and families are personally absorbing in an economy that is in absorbing in an economy are personally and families that individuals risks for an urgent the need suggest These arrangements unequal and insecure. creasingly social benefits, such as medical benefits, retirement savings, paid days days vaca paid for off savings, retirement such as medical benefits, social benefits, exacerbates the economic compensation. This only and workers tion and illnesses, ly classified as independent contractors rather than employees or because they face or because they contractors rather than employees classified as independent ly losing out on a host of are relationships, employment contingent other arms-length an online app such as Uber or Task Rabbit, suggesting that we are seeing more of are seeing more that we suggesting Rabbit, a as Uber or Task app such an online a gig economy. than simply 1099 economy representing an increase ofrepresenting workers. million 9.4 work through – of accessed workers 0.5% these – a small number that only find they rangements rose from 10.1% in 2005 to 15.8% in 2015, a jump of over 56% in ten years, of a jump in 2015, in ten years, 56% to 15.8% in 2005 from 10.1% rose over rangements WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 12 - Multiemployer plans must Multiemployer 18 These examples showcase some ofthe generated in examples showcase These being the interesting ideas http://bostonreview.net/us/steven-hill-uber-economy-individual-security-accounts July 2015. Web. The Future of Work in the Uber Economy. Boston Review, 22 Future of Work in the Uber Economy. The Future of Work in the Uber Economy.” Hill, Steven. “The 18 1099 economy – we turn to the two main examples of main examples in the United turn to the two insurance, – we wage 1099 economy from their results. can draw we States and in Canada, and the conclusions policy space about how to fill the gaps that contract jobs leave wide open. In order to gaps that contract jobs leave to fill the how policy space about those in the for of the main questions work insurance answer this paper – could wage have the ability to collectively bargain – but this could still serve as a model for how how for model a as serve still could this – but bargain to collectively ability the have be collected across multiple employers. contributions could prised of and management. both labor representation not do contractors generally a union, and independent by bargained be collectively per hour for each hour of each employee. Through payroll deductions, the amount is the deductions, payroll Through each hour offor per hour each employee. a board of by trustees com is governed which each worker, for allocated into a fund system that pro-rates contributions depending on how many hours a worker puts in. puts hours a worker many on how depending pro-rates contributions that system $3 to $4 contract, usually in the labor is established the employer by paid The amount tiemployer plan that offers them comprehensive benefits. Generally, participating participating Generally, benefits. comprehensive them that offers plan tiemployer on an “hour bank” based hire, they each worker amount for a certain pay employers WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 13 softenthese macroeconomic effects and make more the economy resilient.” “In other words, “In other words, job aggregate losses ultimately consumer lead to spending shocks then lead that furtherto losses of in terms job investment, tax creation, and revenue, Wage more. insurance, acting by to smooth income, can potentially - - - - -
21 The Pew Research Center found that, Research Center Pew The 22
23 BEFORE? HAVE WE TRIED WE TRIED HAVE INSURANCE WAGE According to Kletzer “Research over the past 15 years shows that lower earnings earnings lower that shows the past 15 years over to Kletzer “Research According 20 19 There are only two main examples of de facto wage insurance programs, albeit examples of main programs, two insurance There are only wage de facto These effects are only compounded by the spillover effects In other loss. of income spillover the by compounded only are effects These Yet the consequences for that loss of the consequences for jobs are also important. income between Yet Fifteen years ago, Dr. Lori Kletzer and others brought the idea back in the context Lori Kletzer and others brought the idea back in the context Dr. years ago, Fifteen 2 unemployment_and_earnings_losses_a_look_at_long-term_impacts_of_the_gr/ social insurance program rather than a transfer program (Wander 2016). http://www.hamiltonproject.org/papers/ 2011. Web. Hamilton Project. Nov. Recession on American Workers.” The Greenstone, Michael and Adam Looney. “Unemployment and Earnings Losses: The Long-Term Impacts of The Great Impacts of The Long-Term The “Unemployment and Earnings Losses: Greenstone, Michael and Adam Looney. While it technically serves called wage insurance because the source of funds is a as an income supplement, it’s www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2013/empreporthardchoicesnavigatingtheeco nomicshockofunemploymentpdf.pdf “Hard Choices: Navigating the Economic Shock of Unemployment.” Pew Charitable Trusts. April 2013. Web. http:// April 2013. Web. “Hard Choices: Navigating the Economic Shock of Unemployment.” Pew Charitable Trusts. org/2016/01/why-the-u-s-needs-wage-insurance Kletzer, Lori G. “Why the U.S. Needs Wage Insurance.” Harvard Business Review. Jan. 2016. Web. https://hbr. Harvard Jan. 2016. Web. Needs Wage Insurance.” Business Review. “Why the U.S. G. Kletzer, Lori https://hbr.org/2016/01/why-the-u-s-needs-wage-insurance 25 Jan. 2016. Web. Harvard Harvard Needs Wage Insurance.” Business Review. Publishing, Business School “Why the U.S. G. Kletzer, Lori 23 21 20 19 20 Wage insurance, by acting to smooth income, can potentially soften these macroeco these soften potentially can income, smooth to acting by insurance, Wage more resilient. the economy and make nomic effects words, aggregate job losses ultimately lead to consumer spending shocks that then that shocks spending consumer to lead ultimately losses job aggregate words, more. and ofterms in losses further to lead revenue, tax creation, job investment, families. controlling for a variety of factors, families who experienced job loss between 1999 of a variety job loss between controlling for experienced families who factors, other during that timeframe than wealth to lose more likely times 1.3 and 2009 were 2007 and 2009 were estimated to lose a total of $774 billion in income over the next the next estimated to lose a total of and 2009 were 2007 over billion in income $774 if employment. new even those get 25 years, Research by the Hamilton Project showed that workers who lost their jobs between jobs between lost their who that workers the Hamilton Project showed by Research rity. and consequen far more serious are potentially regains employment worker after a jobs.” and families than the period in between workers tial for job and are taking another at lower pay, wage insurance can help alleviate the effects the effects can help alleviate insurance wage pay, job and are taking another at lower secu economic workers’ on effects long-term ofhave can that downsizing” “income anxiety of workers who were unequipped to take advantage of service advantage jobs. unequipped to take well-paid anxiety of were who workers lost one have who and middle-income workers low income loss for supplementing By of loss of globalization, the accompanying intensifying and the manufacturing jobs, employment checks, which can discourage job searchers from taking a lower paying paying a lower job searchers from taking can discourage which checks, employment job. to their concern about the potential disincentive effects of effects insurance. the potential disincentive to their concern about unemployment un forego to means having job ultimately a new getting argued, they In other words, Economists first put forth the idea of wage insurance a few decades ago in response in of ago idea the decades forth put first few Economists a insurance wage WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 14 ------24
25 ESP was a trial project, tested on a group ofESP was from 5 different displaced workers In 2006, the ATAA program paid out approximately $15 million in wage subsidies. subsidies. million in wage $15 program paid out approximately ATAA the In 2006, Workers age 50 or older are eligible for this wage subsidy if subsidy obtain full-time this wage 50 or older are eligible for they age Workers
Wage Insurance as a Policy Option in the United States. Working paper. W.E. Upjohn Institute, 17 Wandner, Stephen. Wage Insurance as a Policy Option in the United States. Working paper. W.E.
30 Participants in the supplement group in the supplement Participants 27
29 26 The program may have motivated some workers to take jobs with lower wages wages lower jobs with to take workers some motivated have The program may The average payment was $8,705 for 64 weeks during the two-year period and re and period the two-year during weeks 64 for $8,705 was payment average The In terms ofterms In of end the at employment, on effects peri eligibility the sixth-month 70% of qualified workers in the supplement group signed up and received pay of70% received and up signed group supplement the in workers qualified Approximately 20% of displaced workers placed in the supplement group received 20% of group received placed in the supplement Approximately displaced workers In 1999, the SRDC published their research evaluation of the ESP. The following is following The of evaluation published their research the SRDC the ESP. In 1999, The supplement was provided to displaced workers who took new, full-time jobs who took new, workers to displaced was provided supplement The The ESP measured the effect of the wage insurance program by conducting a ran by conducting the effect measured The ESP program insurance wage of the Trade-related Job Loss and Wage Insurance: A Synthetic Review. Rep. University of California, Santa Rep. and Wage Insurance: A Synthetic Review. Job Loss Trade-related Kletzer, Lori. Cruz, June 2003. Web. A Financial Incentive to Encourage Employment among Repeat Users of Employment Insurance: The Doug. A Financial Incentive to Encourage Employment among Repeat Users of Employment Insurance: The Tattrie, Bloom, Howard, Saul Schwartz, Susanna Lui-Gurr, Jason Peng, and Wendy Bancroft. Earnings Supplement Project: Earnings Supplement Project. Rep. Social Research and Demonstration Corporation, May 1999. Earnings Supplement Project. Rep.
31 insurance in his last State of in his last State insurance Presi the Union,
PAST AND PRESENT PRESENT AND PAST PROPOSALS WAGE INSURANCE INSURANCE WAGE Lori Kletzner, a labor economist who specializes in wage insurance, proposes that insurance, specializes in wage who a labor economist Lori Kletzner, The space where different wage insurance policy ideas would likely diverge is how is diverge would likely policy ideas insurance wage where different The space Most of the U.S. wage insurance proposals that have circulated over the last few the last few circulated over proposals that have insurance wage ofMost the U.S. This is essentially identical to the proposal sponsored by Congressman Jim McDer by Congressman Jim identical to the proposal sponsored This is essentially 3 Maximum salary earned — $50,000 years — $10,000 two over Maximum benefits Benefits 50% oftwo salaries between difference Benefits for two years starting from the date ofyears starting from the date for two unemployment Benefits The New York Times. The New York Times New York Times. The New York Andrews, Edmund L. “Why Wage Insurance Is Dividing Democrats.” The Company, 17 Mar. 2007. Web.
- 34 - - - This is Brookings Institute Robert Institute Brookings This is 32 Alternatively, Republican Congressman Jerry Weller (IL) Weller Jerry Congressman Republican Alternatively, 33 The next section ofThe next can be utilized in these ideas how explore to paper seeks this The New York Times. The New York Times New York Times. The New York Andrews, Edmund L. “Why Wage Insurance Is Dividing Democrats.” The Company, 17 Mar. 2007. Web. this program could be implemented and 35 ofdiscussed forms in the insurance wage APPLYING APPLYING WAGE 1099 ECONOMY INSURANCE TO THE THE TO INSURANCE State governments generally fund unemployment benefits with predominantly predominantly benefits with fund unemployment generally State governments How would funding of this income insurance work? In the framework that Strom funding of In the framework would work? this income insurance How As an example, if a 1099 worker’s baseline income is determined to be $45,000 and $45,000 be to determined is income baseline ifexample, an As worker’s 1099 a Once we have a baseline income determined, the logical extension of a baseline income determined, the logical extension insur wage have Once we Wage insurance proposals start from a baseline income from which to measure to measure a baseline income from which proposals start from insurance Wage 4 https://tcf.org/content/report/protecting-workers-patchwork-economy/ 2016. Web. Schmitt, Mark, and Shayna Strom. Protecting Workers in a Patchwork Economy. Rep. The Century The Foundation, 7 Apr. Rep. Schmitt, Mark, and Shayna Strom. Protecting Workers in a Patchwork Economy. ONE DIFFICULTY WITH THE APPLICATION THE WITH DIFFICULTY ONE 35 state and federal payroll taxes paid for by employers. Lori Kletzner argues that a fully Lori Kletzner argues that a fully employers. by paid for taxes payroll state and federal federal program could be financed with a small addition to the insurance scaled wage them with the help of unions. and Schmitt suggest for portable benefits, suggest and Schmitt or through places (a public option), the funds distributed either apart from work be distributed quarterly. be distributed quarterly. she made $35,000 in a subsequent year, the following year she would be provided a be provided she would year the following year, in a subsequent she made $35,000 such as a tax credit, or it could sum, be in one lump This might ofsupplement $5,000. ance, the maximum baseline income could be at $50,000. If a contract worker’s annu If worker’s a contract the maximum baseline income could be at $50,000. ance, no supplement. she receives the baseline amount, then above were al earnings baseline income, the following year the worker will receive an income supplement an income supplement will receive the worker year the following baseline income, of insur wage payment for the standard proposals 50% ofFollowing the difference. ance for 1099 would be that when a worker’s annual income dips below that original, annual income dips below a worker’s be that when 1099 would ance for moving to only contract work. It could be an average income over the past 3 to 5 years. the past 3 to 5 years. income over It could be an average contract work. to only moving the trickiest aspect ofFinding the right baseline is possibly this idea. insurance for 1099 workers, we would also need a baseline income, which is more is which income, baseline a need also would we workers, 1099 for insurance at their regular job before were making workers what It could be difficult to identify. the decline in income when a worker moves from one job to another. That baseline from one job to another. moves a worker the decline in income when an income In order to implement or salary job. from the former income is the wage would this work? For the sake of this thought experiment, we will call this hybrid of sake the hybrid this call will For we experiment, thought this work? this would “income insurance.” surance would have to be a hybrid of sorts between wage insurance and unemploy and of insurance wage to be a hybrid between sorts have would surance that addressed both of need a policy How would these issues. We ment insurance. in the previous section is that contract workers face both the potential for income face both the potential for is that contract workers section in the previous in wage proposal involving Any unemployment. and the potential for downsizing WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 20 - - - - - The same logic could apply to a to apply could same logic The 36 As review, through unions as a conduit, construc through unions as a As review, 37 The main difference between the construction workers workers the construction between The main difference 38 Another issue in designing policy is that the situations that income insurance insurance income that situations the that policy is in designing issue Another Another possibility is for income insurance to be funded and distributed directly directly funded and distributed to be income insurance is for Another possibility https://hbr.org/2016/01/why-the-u-s-needs-wage-insurance 25 Jan. 2016. Web. Harvard Harvard Needs Wage Insurance.” Business Review. Publishing, Business School “Why the U.S. G. Kletzer, Lori The Future of Work in the Uber Economy. Boston Review, 22 Future of Work in the Uber Economy. The Future of Work in the Uber Economy.” Hill, Steven. “The http://bostonreview.net/us/steven-hill-uber-economy-individual-security-accounts July 2015. Web. LIMITATIONS OF THE INCOME INSURANCE IDEA INSURANCE INCOME THE OF LIMITATIONS 38 36 37 Independent contractors cannot currently access multiemployer plans. significant benefit. Alternatively, someone who had been earning $25,000 through who had been earning $25,000 someone Alternatively, significant benefit. no supplement. get out the same period would would be helping to smooth could be so wildly different. For example, someone who someone example, For different. be helping to smooth could be so wildly would a receive would $25,000 and accepted a job paying years several for earned $35,000 income insurance. income insurance. nearing the end offor another job offered with a salary She was of year the $35,000. decline the of she would home pay It is possible to likely with take $7500. $10,000, from her $5,000 and get not work rather would that she was job with the expectation with a baseline income that seems entirely arbitrary. It is also important to think of arbitrary. with a baseline income that seems entirely was with a baseline income ofworker the same $45,000, Say effects. the disincentive What are some of the problems that might arise from this idea of income insurance? the plan avoid structuring how to is to resolve As mentioned, the most difficult issue The income insurance policy would be distributing the income insurance supple income insurance the distributing be would policy income insurance The ment described above. tors who are unable to unionize to access such a plan. The multi-employment plan a plan. The multi-employment such are unable to unionize to access tors who through traditional employers. offered typically benefits comprehensive provides multiemployer plans and the way an income insurance model could be administered an income insurance plans and the way multiemployer independent contrac and the ability for is the nature of receive, those workers what of each employee. Through payroll deductions, the amount is allocated into a fund for into a fund the amount is allocated deductions, Through payroll of each employee. a board of by trustees comprised of is governed which both labor repre each worker, sentation and management. an “hour bank” system or how many hours a worker puts in. The amount paid by the puts in. The amount paid hours a worker many or how system an “hour bank” hour each for hour per $4 to $3 usually contract, labor the in established is employer tion workers are often able to access multiemployer plans that offer comprehensive comprehensive plans that offer are often able to access multiemployer tion workers on based worker, for each amount a certain pays the employer Generally, benefits. the main differences would be the benefits provided, and the ability for independent and the ability be the benefits provided, would the main differences a plan. such contractors to access through contract “employers” and a third party similar to a union, such as a guild. as to a union, such third party similar and a “employers” through contract example; model as the construction worker same multiemployer the It could follow tax paid by contract “employers” of 1099 workers, and distribute the funds. the funds. and distribute of 1099 workers, contract “employers” tax paid by unemployment insurance tax paid by employers. by tax paid insurance unemployment could collect a government the federal whereby program, income insurance federal WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 21 “Proponents of “Proponents insurance wage often assert that it is not a silver bullet and should be one component of a broader ensure agenda to middle class wage but there growth, that is concern policymakers them will treat as substitutes than rather complements.” ------ But the income insurance we de we insurance income the But 39 41 More recently, Andrew Stettner at the Century Foundation argued that Foundation argued Stettner at the Century Andrew recently, More 40 Again, this raises a similar issue for income insurance. Will this idea be used to this idea be used Will income insurance. for this raises a similar issue Again, As mentioned earlier, a hesitation about wage insurance is that, while it is the it is while that, is insurance wage a hesitation about earlier, mentioned As Labor activists would likely make a similar argument for an income insurance. In an income insurance. a similar argument for make likely would Labor activists It also may be helpful to look at the criticisms of be helpful to look at the criticisms It also may as it pertains to insurance wage There is also the issue of cost. Lori Kletzner says that a traditional wage insurance insurance ofwage issue is also the There traditional that a says Kletzner cost. Lori tives Committee on Education and Labor Cong. (2007) (testimony of Thea Mei Lee). Print. Mei Lee). Cong. (2007) (testimony of Thea tives Committee on Education and Labor https://democrats-edworkforce.house.gov/imo/media/doc/032607TheaLeetestimony.pdf How Effective Are Existing Programs in Helping Workers Impacted by International Trade?, U.S. House of Representa U.S. How Effective Are Existing Programs in Helping Workers Impacted by International Trade?, https://hbr.org/2016/01/why-the-u-s-needs-wage-insurance 25 Jan. 2016. Web. Harvard Harvard Needs Wage Insurance.” Business Review. Publishing, Business School “Why the U.S. G. Kletzer, Lori dation, 20 Jan. 2016. Web. https://tcf.org/content/commentary/wage-insurance-for-job-loss-not-a-silver-bul dation, 20 Jan. 2016. Web. let/ The Century a Silver Bullet.” The Century “Wage Insurance for Job Loss-Not Foundation. The Stettner, Andrew. Foun 41 39 40 who do not receive the traditional health insurance, pension contributions or any any or contributions pension insurance, health traditional the receive not do who compensation insurance. and workers insurance contribution to unemployment 1099 economy, policies that would have much more effect than an income smoothing much more effect have policies that would 1099 economy, workers to 1099 benefits safety-net provide options that need policy We insurance? draw resources from our traditional unemployment insurance and, further, will it and, further, insurance resources from our traditional unemployment draw a need for about the policy infrastructure we distract us from a broader conversation than complements. than complements. bullet and should be one component of middle class wage to ensure a broader agenda rather will treat them as substitutes but there is concern that policymakers growth, ly to propose using unemployment benefit funds to pay for a broad sweeping wage wage sweeping for a broad funds to pay benefit using unemployment to propose ly ofProponents program. insurance silver a not is it that assert often insurance wage type ofvotes because of to attract that is likely policy on returning to the emphasis who are like there will be legislators benefits, collecting unemployment over work pay a tax or percentage based on workers’ hours, employers would have “skin in the in “skin have would employers hours, workers’ on based or percentage tax a pay game.” other words, income insurance would only make it easier for companies to eliminate it easier for make only would income insurance other words, required to if were employers of Conversely, traditional jobs in favor contract jobs. benefits, and wage insurance gives them an out. gives insurance wage and benefits, pays better. pays and wage livable a their workers paying for companies should be held accountable bility by subsidizing low wages. Thea Lee from the AFL-CIO argued at the time that AFL-CIO the Thea Lee from wages. low subsidizing bility by something that for rather than wait jobs quickly bad to take workers it encourages debate on wage insurance a decade ago, several organizers on the Left opposed the organizers on the Left several a decade ago, insurance debate on wage mo in promoting downward aid companies argued that it would idea. Labor leaders market, implying that the costs would be much higher. be much higher. the costs would that implying market, the U.S. During the 1099 economy. think through problems for to the labor market years, would cost several billion dollars per year. per dollars billion several cost would years, labor contract-based structured, newly a for program a continuous be would scribed program, which would provide income supplements for dislocated workers for two two for workers dislocated for supplements income provide would which program, WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 22 - - - - income insurance as applied to 1099 work, per to 1099 work, as applied income insurance THE RIGHT FIT FOR FOR FIT RIGHT THE INSURANCE WAGE wage and the total income from contract work. and the total income from wage Benefits 50% of the traditional job salarytwo incomes: or between difference Benefits for two years starting from the date of unemployment and /or subse /or the date ofyears starting from and for two unemployment Benefits work quent shift into contract Maximum salary earned – $50,000 years –$10,000 two over Maximum benefits Of this type of course, should be thought of insurance wage as one component of Some of the problems we described above, particularly the political and budget budget and political the particularly ofSome above, described we problems the The same funding logic as conceived for income insurance could be applied here. could be applied here. for income insurance The same funding logic as conceived 5 GIVEN THE ISSUES WITH LONG-TERM WITH ISSUES THE GIVEN table benefits that offer the same type same type the offer that benefits table em traditional through provided security of a suite of policy options that must be considered to provide support for workers in a ofa suite workers for support policy options that must be considered to provide por also need universal bullet. Workers is not a silver insurance Wage 1099 economy. as it is being debated in Congress. work. Using this model of wage insurance to expand the wage insurance plans being insurance this model of Using the wage to expand insurance work. wage heft political additional some them give also may workers 1099 include to circulated effects to not work, and the problem of to not effects would be alleviated finding a baseline income insurance traditional wage be starting at the same place as with would because we into contract moving had lost before worker – the traditional job that the contingent significantly less than the income insurance idea (given wage insurance is a more a is insurance wage (given idea income insurance the less than significantly less disincentive be some but certainly there would solution), short-term targeted, issues, would certainly apply to this form of wage insurance, but the cost would be of to this form but the cost would apply certainly insurance, would wage issues, It could be implemented and the funds distributed as either apart from work places distributed as either apart from work It could be implemented and the funds with the help of or through them, third party. a union-like (a public option), longer as its intention is to soften the blow for workers ofwork. workers into contract for moving the blow soften is to intention as its longer This is similar to the partial unemployment benefits for people who are working part- working who are for people benefits This is similar to the partial unemployment would last being it the difference full-time job, time due to their inability to find a The set up could be very similar to typical wage insurance proposals: insurance wage very similar to typical The set up could be into 1099 work. into 1099 work. haps the best way to apply wage insurance to 1099 workers is to design it to soften the is to design it to soften to 1099 workers insurance wage to apply haps the best way jobs and are moving are displaced from their traditional who workers transition for WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 23 - policy debate on the 1099 economy. policy debate career ofinto the dis transitioning crucial means for but it could be a contract jobs, ruption ofin the and explored be considered therefore and should work contingent ployment. The transitional wage insurance that we prescribe for the 1099 economy economy 1099 the for prescribe we that insurance wage transitional The ployment. a potential over device income smoothing a consistent, long-term not provide would WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 24 - - - - - Article Corak, Miles. “Why Children Need Wage Insurance.” http://www.brookings.edu/blogs/ Insurance.” Wage Children Need “Why Corak, Miles. social-mobility-memos/posts/2014/02/14-why-children-need-wage-insurance-corak. http://www.brookings.edu/blogs/social-mobility-memos/posts/2014/02/19-how- Article much-canwage-insurance-help-children-burtless. Burtless, Gary. “How Much Can Wage Insurance Help the Prospects of Help Insurance Children?” Can Wage Much “How Gary. Burtless, www.brookings.edu/~/media/research/files/papers/2005/5/macroeconomics%20 brainard/2005btf_brainard.pdf. Paper Brainard, Lael, Robert E. Litan, and Nicholas Warren. A Fairer Deal for America’s Work America’s Deal for Fairer A E. Litan, and Nicholas Warren. Brainard, Lael, Robert Sept. 2005. http:// Institution, 14 Era of The Brookings ers in a New Rep. Offshoring. funemploymentpdf.pdf ment.” Pew Charitable Trusts. April 2013. http://www.pewtrusts.org/~/media/legacy/ April 2013. Charitable Trusts. Pew ment.” uploadedfiles/pcs_assets/2013/empreporthardchoicesnavigatingtheeconomicshocko Boguslaw, Janet, Hannah Thomas, Laura Sullivan, Tatjana Meschede, Sara Chaganti, Meschede, Tatjana Sullivan, Laura Hannah Thomas, Janet, Boguslaw, Economic Shock of the Navigating “Hard Choices: Unemploy and Thomas Shapiro. ers. Rep. Social Research and Demonstration Corporation, May 1999. http://www.srdc. 1999. May and Demonstration Corporation, Research Social Rep. ers. Paper org/media/195754/testing.pdf. Bloom, Howard, Saul Schwartz, Susanna Lui-Gurr, Jason Peng, and Wendy Bancroft. 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Tattrie, Doug. A Financial Incentive to Encourage Employment among Repeat Users ofUsers Repeat among Employment to Encourage Incentive Financial A Doug. Tattrie, WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 28 - - Felicia came to the Institute from the Democracy Alliance, where she led the devel where Alliance, came to the Institute from the Democracy Felicia Holmberg served as a research analyst at the Center for Rural Studies in Vermont Vermont in Studies Rural for at the Center a research analyst as served Holmberg FELICIA WONG FELICIA SUSAN R. HOLMBERG R. SUSAN received the 2000 American Political Science Association award in Race, Ethnicity, and Ethnicity, in Race, Association award Science American Political the 2000 received Politics. torney General and a political appointment in the Office torney Secretary of the Navy. of the Her of University in political science from the Berkeley. California, She holds a Ph.D. doctoral dissertation on the role of public education politics in K-12 framing race and Felicia ran operations and product development at a venture-funded education services at a venture-funded ran operations and product development Felicia in the Office At of the Fellowship public service includes a White House Her company. opment and assessment of the organization’s strategic investment portfolio. Previously, Previously, portfolio. strategic investment opment and assessment of the organization’s Felicia Wong is the President and CEO of the Roosevelt Institute, which seeks to re-imagine seeks which Institute, is the President and CEO of the Roosevelt Wong Felicia the 21st century. for the social and economic policies of Franklin and Eleanor Roosevelt the work ofthe work Elinor Ostrom. the Nobelist offers economic education for social activists. Her dissertation research developed an Her dissertation research developed for social activists. education economic offers based on cooperatives) coffee theoryeconomic of Ethiopia’s on (focusing cooperatives American Economy and Rewrite the Racial Rules. the Racial and Rewrite American Economy an organization that Economics, Popular for and as a program director at the Center including economic inequality, corporate governance, and CEO pay. She most recently She most recently and CEO pay. corporate governance, inequality, including economic of the Rules reports: Rewriting the foremost Institute’s ofco-authored two Roosevelt the earned her Ph.D in economics from UMass, Amherst, the premier center for heterodox heterodox for premier center Amherst, the UMass, from economics in Ph.D her earned of researches and writes on a range and research. Holmberg economics teaching issues, Susan Holmberg is the Research Director and a Fellow at the Roosevelt Institute. She Institute. at the Roosevelt and a Fellow Director is the Research Holmberg Susan ABOUT ABOUT AUTHORS THE WAGE INSURANCE IN AN ERA OF NON-TRADITIONAL WORK PAGE 29 - www.aspeninstitute.org. the Wye River on Maryland’s Eastern Shore. It also has offices in New York New in has offices also It Shore. Eastern Maryland’s on River Wye the visit more information, ofCity and an international network For partners. during values and to provide a nonpartisan venue for dealing with critical with dealing for venue a nonpartisan to provide and values during and on Aspen, Colorado; DC; Washington, based in The Institute is issues. The Aspen Institute is an educational and policy studies organization Institute is an educational and policy Aspen The leadership based on en Its mission is to foster DC. based in Washington,