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Assisting Workers in Global Competition

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Sen. Max Baucus (D-MT) introduced bipartisan legislation this week that would significantly expand Trade Adjustment Assistance, or TAA, benefits, the primary lifeline for workers who have lost their jobs to global competition. The bill would offer assistance to more workers, double retraining programs to $444 million, and increase health care tax credits.

As it stands, the TAA provides worker retraining, job search assistance, relocation allowance, income support if workers are forced to take lower paying jobs, and health care credits while a worker remains unemployed. These services have lent a measure of relief to eligible workers who lost their jobs to foreign competition.

But with the recent rapid pace of globalization leading to white-collar and service jobs joining the longtime flow of manufacturing jobs being outsourced to cheaper foreign labor, a major adjustment and expansion of the TAA has been long overdue.

After intense pressure from the U.S. Court of International Trade, the Department of Labor opened up TAA benefits to digital experts, such as software coders. Now, further TAA expansion will continue to soften the burden on displaced workers.

While any effort to expand TAA to help displaced workers is laudable, Center for American Progress Senior Fellow Gene Sperling argues that we need broader adjustment assistance reform. Adjustment assistance cannot merely be burial insurance for when things go wrong. Policies should address job dislocation due to globalization and technological change before they happen.

Such preemptive assistance—offered to any displaced worker, no matter the cause of job loss or the broader state of the economy—is essential to renewing the social compact in the United States. Specifically, Sperling has proposed a One Stop Shop system for adjustment and reemployment. One Stop Shop would be a national system of centers—and a single help number such as 1-800-NEW-JOBS—that would bring all unemployment benefits together in one place and offer immediate assistance to workers who lose their jobs. In addition to the One Stop Shops, a comprehensive adjustment plan would include:

  • Expanding TAA’s wage insurance program to benefit all workers over 50 who lose their jobs.
  • Creating a universal guarantee for health care between jobs until a broader system of universal healthcare is established.
  • Adding mortgage insurance into the package of available benefits for the unemployed.
  • Developing Community Adjustment Compacts, which offer business investment incentives and wage tax credits to those who bring business investment into communities identified as “at risk” of suffering dislocation due to trade.
  • Implementing Flexible Education Accounts, which would broaden the current Life Time Learning Tax Credit and further empower workers to seek adult education and skills building courses in order to invest in themselves before as well as after job loss.

While the Trade Adjustment Assistance Act does not create the type of expansive, aggressive worker assistance program that Sperling and the Center for American Progress have suggested, it is a crucial first step toward relieving the burden globalization has placed on millions of American workers and ensuring that workers and their communities can become more competitive in the global marketplace.

For more reading about these ideas, please see “The Pro-Growth Progressive" by Gene Sperling, Chapter 4, as well as the following links:

 

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