BEYOND TRADE

When the Senate Finance Committee turns its attention to the Trade Adjustment Assistance Program next week, it should begin by reconsidering why there are separate, and more generous, benefits for workers deemed by the government to have lost their jobs to trade, rather than decreased demand for goods or rising manufacturing costs. Rather than include more people in TAA or expand its benefits, senators should consider expanding unemployment benefits generally.

Congress recently moved in that direction with a 13-week extension of unemployment benefits as part of a war funding bill. The extension expires March 31. While extending benefits is helpful, it pales in comparison to what is available through Trade Adjustment Assistance.

Trade Adjustment Assistance was started in 1962 as a way to ease the loss of manufacturing jobs to foreign competition and to get political support for trade pacts. 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 whether moving jobs offshore or foreign imports are responsible for the layoffs.

Only a small fraction of laid-off workers qualify for TAA benefits, which 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 years old may get a wage subsidy, and additional health benefits are available.

About 8.5 million people are looking for work, according to Howard Rosen of the Trade Adjustment Assistance Coalition. Only 50,000 of them are getting TAA assistance.

“Why are we helping those people?” he wonders.

Although Mr. Rosen advocates for expanding TAA benefits to reach more people, his question should apply to all those who are unemployed. It is one senators should keep in mind as they consider extending TAA benefits to service sector workers and workers in industries affected by imports from China and India, as Sen. Olympia Snowe, a member of the Finance Committee, has proposed.

When a worker is out of a job, it doesn’t much matter whether the factory closed because of high oil prices, increased automation or because of cheaper products from other countries. So instead of being more individually generous to a small group deemed affected by trade, a better approach would be to increase general unemployment benefits. This would help more workers and the economy in general.