By Bob Davis. Wall Street Journal.

Trying to build a consensus on globalization has to be one of the most thankless jobs in Washington, D.C. Give some credit to the Financial Services Forum, a trade group of 20 of the largest banks, insurance companies and investment firms, which is holding “town hall meetings” around the country on the effects of globalization on communities and workers.

This isn’t simply the usual business cheerleading for expanded trade. Clearly that hasn’t been sufficient to help sell congress on new trade deals. The forum has also commissioned a provocative study by Harvard Prof. Robert Lawrence, Dartmouth Prof. Matthew Slaughter and Grant Aldonas, a former Undersecretary of Commerce for trade in the Bush administration.

Among the recommendations –which the forum’s CEOs haven’t backed, but put out for discussion — are a more progressive tax code (i.e., the wealthy pay more than they do now)., wage-loss insurance and a new form of community insurance.

The wage-loss insurance was the subject of debate at a chicago session today. Under the plan, workers who lose their job and get a new one that pays less - a common situation - would get government funds to make up part of the difference in wages for some period of time.

Free-trade liberals love the idea of wage insurance, which has been talked about for years, because it’s a way to ameliorate some of the downsides of job loss, and could give workers an incentive to take a new job rather than hunt and hunt only for better-paying ones.

But unions are very skeptical, as was on evidence in Chicago. “I don’t think wage insurance by itself is the answer,” said Jorge Ramirez, secretary-treasurer of the Chicago Federation of Labor. “I folks knew they had that kind of insurance, I’d be afraid [employers] would think it more acceptable to send jobs overseas.”

Lawrence disagreed. “I don’t see firms reluctant to lay off workers today,” he said. He doubted that the insurance would spur more job loss.

Lawrence is now working to perfect another idea that he thinks could help ease opposition to globalization. When factories fold up their operations, it can devastate a community in many ways, including by reducing their tax base. Without sufficient funds, schools suffer as do other services making the community less able to attract new firms.

Sometimes the feds step in with money, but that’s unreliable. Instead, Lawrence says communities should purchase a kind of “insurance,” which would kick in with payments when tax collections fall below a certain pre-set level. The money would come from communities pooling a percentage of tax revenue - probably less than 0.5% — in good times. The pool would make payments in bad times.

He says the plan wouldn’t only help Rust Belt cities waiting for the next shoe to drop. But it could be used by wealthier communities that pool funds and find tax collections falling because, say, real-estate receipts tank.

The plan is still being worked on and may be discussed at the next financial services forum meeting, which is expected in about three months. – Bob Davis