The big political challenge around economic globalization concerns how best to assist and support those whose livelihoods are adversely affected by economic competition. Observers from all sides of the political spectrum agree that the US government does a poor job on this front, and lots of interesting new ideas are bubbling up about how best to assist dislocated workers. The Financial Services Forum has recently presented a new approach crafted by alumni of both the Bush and Clinton Administrations. The authors propose a new Adjustment Assistance Program (AAP) that would commit $22 billion annually to provide a wider menu of benefit options for workers affected by globalization and technological change. The AAP would provide, among other things, wage loss insurance to workers struggling to find new jobs at wages comparable to their previous employment, continued health insurance while unemployed, and enhanced eligibility for various training programs. The proposed program will help ease the transition for affected workers by providing them with a stronger safety net as well as incentives to retrain and build a prosperous new career in alternative fields.

Download the July 2008 Financial Services Forum White Paper, "Succeeding in the Global Economy: An Adjustment Assistance Program for American Workers," by Grant D. Aldonas, Robert Z. Lawrence, and Matthew J. Slaughter.