Mr Obama wants the government to provide workers with wage insurance. If a worker blamelessly loses her job and takes a new one which pays less—and less than $50,000 the government would make up half the shortfall for two years, up to a total of $10,000. An estimate from 2007 suggests this would cost $3 billion-4 billion a year. That means it could be financed with a tax, which supporters would describe as an insurance premium, of around $25 per year, per worker. The proposal is likely to remain theoretical for the foreseeable future; it has few takers among Republicans, who control Congress and therefore the budget. Yet as an example of how the American left is thinking about how to respond to globalisation and automation it is worth examining, not least because whomever the Democrats nominate as a presidential candidate in July is likely to borrow it.
The government already offers the same terms to workers over 50 who lose their jobs as a result of foreign competition. The logic of this proposal is the same: trade benefits all consumers by filling shops with cheap imports, but harms those whose jobs disappear overseas. Why, ask advocates of wage insurance, should this apply only to trade-related job losses? Is a factory worker replaced by a robot any less deserving than one who is displaced by foreign goods?