Suppose you lost your job. Would you take one at lower pay? Maybe not. What if the government gave you part of the wage difference? Would you take the job then?

Such make-up payments are called “wage insurance.” Senator Schumer wants to help you get some. When Congress reconvenes after its 2-week recess he will introduce a wage-insurance bill in tandem with Rep. Jim McDermott of Washington..

According to Mr. Schumer, “We have to make sure that job disruptions caused by globalization become manageable transitions for families rather than the economic crises they are today.”

Curiously, both unions and employers have reservations about wage insurance, for different reasons. If neither is for it, why should it even exist?

Workers already have some protection from job loss. About 97% of wage and salary workers have unemployment insurance, a federal-state program funded by employer payments that rise with the number of firm layoffs. The program gives unemployed workers, who numbered 7.3 million in 2006, benefits for up to six months. Qualifications and benefit levels are set by individual states.

Wage insurance goes beyond unemployment insurance. It pays a worker who has a job. The most often-cited version of the proposal was developed by Brookings Institution scholars Lael Brainard, Robert Litan, and Nicholas Warren. Full-time workers would receive half the difference between the wages of a lost higher-paying job and a new lower-paying job, with benefits capped at $10,000 a year for two years.

Testifying before the House Committee on Education and Labor on March 26, Ms. Brainard stated, “Under such a program, an average trade-displaced worker, who earned $37,382 in 2004 and was reemployed with a 26% loss rate at $27,662 would instead receive $33,522 for the first two years after reemployment, thus enabling them [sic] to smooth their income while becoming more valuable in the new job.”

A more narrow version of wage insurance, Alternative Trade Adjustment Assistance, now compensates manufacturing workers ages 50 and older who lose jobs to imports. Benefits are capped at $5,000 annually for two years. In 2005, the latest full year available, 2,349 workers signed up.

Wage insurance might expand ATAA to the entire workforce, or it could be limited to those who work full-time, have been in their jobs for at least two years, and are above a certain age, perhaps 40 or 50. Wage insurance might encourage workers to return to work sooner than they would otherwise, arresting the decay of skills and reducing payments of unemployment benefits.

The largest union coalition, AFL-CIO, is concerned that wage insurance would induce workers to take lower-paying jobs instead of staying unemployed and receiving training for higher-paying jobs. The policy director of the AFL-CIO, Thea Mei Lee, said at House Education and Labor hearings on March 26 that “Workers who accept lower-wage employment because of wage insurance are likely to be no better off at the end of their eligibility period.”

Further, Ms. Lee suggested that the government subsidy for taking a lower-paying job might effectively benefit the employer, not the worker. If an employer knows that a worker is eligible to receive a $10,000 annual government payment, the employer might hire the worker at a lower salary than he would otherwise offer, and capture some of the benefit for himself. Wages for workers of similar skills employed by the same firm might fall too.

On the other hand, the director of Workforce Development for the State of Alabama, Tim Alford, understands that the payments required of all employers for wage insurance could have negative consequences for hiring. He says: “I would be leery of wage insurance as a national policy until I got more details. We don’t want to unintentionally put more people out of work.”

Mr. Alford testified that the remedy was not wage insurance, but more training for workers, offered by business, schools, and states. Alabama’s strong economy means that Alabama is no longer asking “where are the jobs?” but “where are the workers with the skills I need?” Some workers at the Mercedes plant right outside Tuscaloosa without college degrees earn more than $100,000.

And the president of UWC — Strategic Services on Unemployment and Worker’s Compensation, Douglas J. Holmes, testified on March 15 before a Ways and Means subcommittee that “The cost of a federally imposed across the board wage insurance program simply is not justified by its benefit. At $40 per employee, a new wage insurance tax would cost employers approximately $5 billion.”

So wage insurance faces some critics who say it does too little for workers because it encourages them to take low-wage jobs, and others who say it hurts workers by raising employment costs and discouraging hiring.

Because unemployment varies widely by locality and industry, the challenge is to encourage workers either to get retrained for skills with expanding demand or to relocate to where the new jobs are located. Will wage insurance motivate unemployed workers in Rochester to move to Tuscaloosa to take six-figure jobs that don’t require a college degree, or will it encourage them to stay where they are?

Americans don’t know whether wage insurance will solve problems of economic insecurity from globalization. But it might be worth trying it in a few states to see if it works before imposing a federal mandate Mr. Schumer could spend part of his two-week break finding out whether New York is a suitable candidate.

Ms. Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.