Income insecurity?

Mort Kondracke:

After Iraq, the most contentious issue in politics is "economic insecurity" -- a jumble of items that includes stagnant wages, inequality of incomes and opportunity, globalization, outsourcing of jobs and immigration.

It's the Lou Dobbs agenda -- the list of complaints that the CNN anchor rails about each night, which has given rise to protectionist populism in both parties and which cries out for some straight talk and novel remedies.

The worst temptation will be for Congress to reject trade agreements that the Bush administration is preparing to submit, cutting the United States off from both export and import opportunities. Instead, the U.S. needs to improve its competitiveness and bolster the safety net for workers who lose their jobs.

One idea that's received little attention --but should get more -- is wage insurance, a relatively inexpensive program to make up part of a worker's salary loss.

Robert Litan of the Brookings Institution, a major proponent of the plan, estimates that it would cost just $3.5 billion a year -- charged to employers at $25 per worker -- to provide permanently displaced workers with 50 percent of their lost wages up to $10,000 a year for two years.

Litan argues that current U.S. safety-net programs, including unemployment insurance and trade adjustment assistance, are inadequate, hard to obtain and actually discourage workers from finding new jobs.

The potency of the insecurity issue was on display when Sen. Jim Webb (Va.) devoted half of the Democratic response to the State of the Union address to it, asserting that "the middle class of this country, our historic backbone and our best hope for a strong society in the future, is losing its place at the table."

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This is demagoguery disguised as a policy argument. Want to talk about income insecurity, talk to a small business owner, the guys who are creating these jobs. While Webb blathers about record corporate profits and bonuses, we also have companies like Ford that are incurring record losses which demonstrate if nothing else the thin line between profit and loss risks that all businesses have. There is nothing really wrong with employees feeling these risks. It makes clear that they have a stake in the results of their efforts.

I heard the story of a carpenter who had gotten his start during the depression and who worked hard and fast swinging his hammer at nails. He said the reason he did it was that if he did not there was a line of carpenters waiting to take his place. Insecurity that increases productivity is a good thing.