November 23, 2024
Editorial

BEYOND TRADE

Changes pending in Congress would expand special federal assistance to workers who lose their jobs because of trade. Providing help to more laid-off workers is a positive move. Easing the distinctions between those who lost their jobs because of trade, as determined by the federal government, and those whose jobs disappeared for other reasons would be better.

Trade Adjustment Assistance was initiated in 1962 as a way to ease the loss of manufacturing jobs to foreign competition. To qualify, the company, workers, union officials or the state Department of Labor must apply to the U.S. Department of Labor and demonstrate that the job loss was tied to moving production to a country that has a free-trade agreement with the United States or because of foreign imports. The department reviews sales data and surveys customers to determine if moving jobs offshore or foreign imports are responsible for the layoffs. About 1,000 Maine workers are receiving TAA benefits, a small percentage of the workers who have lost their jobs in recent years.

Workers can qualify for benefits that far exceed those available to employees who lose their jobs for other reasons. Regular unemployment benefits last for a maximum of 26 weeks. Workers who qualify for TAA can extend these benefits, including retraining, for two years. Workers over 50 may get a wage subsidy, and additional health care benefits are available.

This disparity prompted Harvard economist and former Bush administration official Greg Mankiw to ask two questions: “Can you really tell whether a worker is losing his job due to trade or due to other forces such as technological change?” Second, “Is a worker who loses a job due to trade deserving of a more generous safety net than a worker who loses his job due to other forces, such as technological change?”

The answer to the first is “not exactly” and the second, certainly not. However, as recent debates have highlighted, trade is a difficult topic politically and TAA allows more lawmakers to justify voting for trade agreements. So, it’s no surprise that TAA advocates are pushing for an expansion as Congress debates a trade agreement with Peru.

Sen. Olympia Snowe is a sponsor of legislation that would extend TAA benefits to more workers, such as fishermen and service workers. Rep. Michael Michaud sponsored similar legislation that was recently passed in the House. That bill also increases training benefits and would streamline the process for determining which workers qualify for the assistance.

When a worker is out of a job, it doesn’t much matter whether the factory downsized or closed because of cheaper products from other countries, technological upgrades that reduced the need for human labor or decreased demand. So, instead of being more individually generous with benefits deemed warranted because of trade, a better program would help thousands more workers, regardless of why they lost their jobs.


Have feedback? Want to know more? Send us ideas for follow-up stories.

comments for this post are closed

You may also like