Extended Severance Pay

Solution

   Establish a new policy that requires companies to provide up to two years of severance pay for their employees upon termination. One year of severance pay will be provided after ten years of employment, and after twenty years of working at the company, two years of severance pay becomes available.

   Funds contributed to the extended severance program will be held separately at the Labor Dept. so that every worker in America will have their own severance account that is independent from their employer(s). Employers will contribute to the employee's account with each paycheck for the funds to remain current and available at any time.

   Employers will also have the option to contribute more than just the federally mandated two-year coverage in order to prevent the churn of workers who may seek employment elsewhere after every twenty years or so (for another two-year's worth of severance coverage). If so, then over the course of a forty-year career, a worker may have accumulated as much as four years' worth of severance pay in their accounts.

   The payout procedure for benefits will be straightforward. When a person loses their job, they will register with the Labor Dept. to initiate their claim for automatic weekly benefits. The check will be based upon the current amount in their severance account. State unemployment benefits may occur concurrently or after the severance account has been depleted of funds (varies between states).

   The primary reason for having an extended severance program is that it will provide a positive effect for the nation's economy.

   Most recessions in America lasts between 1-2 years. Providing an extended severance program that provides benefits during that length of time or beyond has the potential of preventing a recession from occurring because people will be receiving a weekly paycheck while they are unemployed.

   This will soften the economic impact from any recession, and perhaps, even prevent the recession in its entirety.