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802            <div class="rich-text"><p><em>This post was originally published in </em><a href="https://www.governing.com/magazine/14-big-ideas-for-the-next-era-of-government#:~:text=BRING%20BACK%20WAGE%20INSURANCE" data-entity-type="external"><em>Governing</em></a>.</p><p>Amid concerns about AI-driven job displacement, state lawmakers are searching for tools to help displaced workers land on their feet. Fortunately, one of the most promising evidence-based options has already been piloted.</p><p>Wage insurance supplements the earnings of workers who move into jobs that pay less than their previous positions. Previously, the United States offered wage insurance to some workers age 50 or older through the Trade Adjustment Assistance (TAA) Program. In 2024, researchers found that workers just above the age cutoff experienced shorter periods of unemployment and earned about $18,000 more over four years than similar workers just below the cutoff. Those outcomes suggest wage insurance reduced the earnings penalty of taking a lower-paying job, making earlier reemployment more financially viable.</p><p>Today’s policymakers can learn from the TAA-era wage insurance program to help displaced workers rebuild earnings, reduce long-term unemployment and navigate career transitions in an AI-driven economy. For one, the program largely paid for itself as higher earnings increased tax revenue while workers drew fewer unemployment benefits. At the same time, many eligible workers never claimed TAA wage insurance because of administrative delays and confusing eligibility requirements.</p><p>To address those challenges, policymakers could launch wage insurance pilots with universal eligibility, low-friction approval processes and evidence-backed earn-and-learn training opportunities. If successful, wage insurance could prove to be a no-regrets policy: a cost-effective way to support workers and employers regardless of how AI reshapes labor market opportunities.</p></div>
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