3.1 Section Title
Chapter 3 HEADLINE: Services Workers Are Now Eligible for Trade Adjustment Assistance
President Kennedy first introduced Trade Adjustment Assistance (TAA) in the United States in 1962, for workers in manufacturing. This article described how it was extended in 2009 to include service workers. The TAA program was reauthorized by the 2011 U.S. Congress through the end of 2013, and we can expect its continued reauthorization in the future to support workers who are displaced by trade.
In today’s era of global supply chains, high-speed Internet connection, and container shipping, Kennedy’s concerns remain relevant: technology and trade mean growth, innovation and better living standards, but also change and instability. (Research early in this decade typically found that international competition accounted for about 2 percent of layoffs.) But while concerns may be permanent, specific programs and policies fade unless they adapt to changing times. And despite its periodic update, until this week TAA remained designed for an older world. Most notably, it barred support for services workers facing Internet-based competition… .
In this context, yesterday’s … bill signing contained the first fundamental change to the TAA program in a half-century. An accord three years in the making, overseen by Senators Max Baucus (D-MT) and Charles Grassley (R-IA), reshapes TAA for the 21st century. The new program, set out in 184 pages of legal text, has three basic changes:
- More workers are eligible: Service industry employees will be fully eligible for TAA services, making the program relevant to the high-tech economy. So will workers whose businesses move abroad, regardless of the destination. The reform also eases eligibility for farmers and fishermen.
- They get more help: The reform raises training support from $220 million to $575 million, hikes support for health insurance from 65 percent to 80 percent of premiums, gives states $86 million a year to pay for TAA caseworkers, creates a $230 million program to support communities dealing with plant closure, and triples support for businesses managing sudden trade competition.
- They are more likely to know their rights: The bill also creates a special Labor Department TAA office to ensure that eligible workers know their options.
Kennedy’s innovation is thus adapted to the 21st-century economy, guaranteeing today’s workers the support their grandparents enjoyed. A bit of good news, in a year when it is all too rare.
Source: Excerpted from Progressive Policy Institute trade fact of the week, “Services Workers Are Now Eligible for Trade Adjustment Assistance,” February 18, 2009.
Question
Why do you suspect the original TAA program introduced by President Kennedy didn’t include protection for service workers?
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Services were largely non-tradable goods when TAA was first introduced by President Kennedy thus employees working in service sectors weren’t likely to be displaced by trade and therefore didn’t require protection under the Trade Adjustment Assistance program.
Question
It is sometimes argued that TAA is just a more expensive form of unemployment insurance and therefore should be eliminated in favor of the latter. Proponents argue this would be more equitable as it would provide equal unemployment coverage regardless of a worker’s reason for job loss. Would you agree or disagree with this argument?
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Answers will vary. Students might favor TAA over, or in addition to, traditional unemployment insurance, suggesting workers displaced by trade warrant additional coverage/job training because, when there are limited alternatives, they may require additional training and/or job assistance for re-employment.