America’s safety net for workers affected by globalization is crumbling

WASHINGTON — In September, the lighting factory in Logan, Ohio, where Jeff Ogg has worked nearly every day for the past 37 years, will close its doors due to an often-made switch from fluorescent lighting to LED technology. cheap in china.

At 57, Mr. Ogg is not yet ready to retire. But when he applied for a national retraining program that helps workers who have lost their jobs due to foreign competition, he was dismayed to see his application turned down. A follow-up request for reconsideration was immediately denied.

The program Ogg turned to for help, known as Trade Adjustment Assistance, has for the past 60 years been America’s main antidote to the pressures that globalization has unleashed on its workers. More than five million workers have participated in the program since its inception.

But a lack of funding from Congress has put the program in jeopardy: Business assistance officially ended July 1, though it continues to temporarily serve those currently enrolled. Unless Congress approves new funding for the $700 million program, it will cease to exist entirely.

Established in 1962, business assistance was intended to help workers whose factories and other jobs were increasingly moving overseas as companies looked for cheap labor outside the United States. Provides services such as recycling subsidies, job search assistance, tax credits for health coverage, and relocation allowances.

But the benefits it offers have been phased out due to lack of funding, including limiting who qualifies for assistance. A year ago, the program was restricted to workers who make goods, excluding those in the service sector, even though those jobs have also suffered a wave of offshoring as companies locate call centers and accounting departments in abroad. Additionally, only those whose jobs relocated to countries that have a free trade agreement with the United States, such as Canada and Mexico, but not China, were eligible for assistance.

On July 1, the program stopped reviewing new applications and appeals from workers whose applications were denied, and will be phased out.

While often criticized for being inefficient and bureaucratic, it has been the country’s main response to business competition for decades. Its disappearance may leave thousands of workers without critical support as they search for new jobs. In 2021, the Department of Labor certified 801 applications for trade adjustment assistance from various workplaces, covering approximately 107,454 American workers.

The decision on whether to reauthorize the program has become a victim of an intense fight in Congress over what to include in a sprawling bill aimed at making the United States more competitive with China. The centerpiece of the legislation is $52 billion in funding for semiconductor manufacturing in the United States, but lawmakers have disagreed over whether to include several other trade-related provisions, such as funding for retraining workers.

House Democrats had proposed including other trade provisions as well, including measures to increase scrutiny of outbound investments that could send American technology abroad and to eliminate tariff exemptions for small-value goods imported from China.

On Tuesday, the Senate voted to promote a smaller legislative package that included funding for the chip industry and broader research and development, but lacked funding for Trade Adjustment Assistance or other trade-related measures. The chip legislation will still require further approval in both the House and Senate.

Supporters of Trade Adjustment Assistance say they won’t stop pushing for it to be reauthorized, and that funding for the program could still be included in other legislation.

Sen. Sherrod Brown, a Democrat from Ohio, blamed Republican lawmakers for “holding the TAA hostage” and said he will continue to fight to reauthorize the program.

“They have sold out American manufacturing time and time again by voting for trade deals and tax policies that send jobs overseas, and they continue to block investments to empower workers who lose their jobs because of those bad trade deals,” Brown said in comments. sent by email. . “TAA serves workers, like those in Logan, Ohio, who have their lives turned upside down through no fault of their own.”

The program and its benefits are already out of reach for Mr. Ogg and 50 others who work at the Logan plant, which makes the glass tubes in the fluorescent lighting fixtures that were once ubiquitous in schools and offices. The plant tried to transition to making LED lights in recent years, but found that those lights could be bought cheaper abroad.

“Our plant, our people, most of them have been there more than 25 years,” said Mr. Ogg, president of the United Steelworkers local union. “You work in the same place for so long, that’s all you know.”

Mr. Ogg said he had no complaints about his career at the plant, where he estimates the average salary is $25 to $30 an hour, enough to buy a house and raise three children. But he’s not sure what to do next. He previously worked as a mechanic, but said the type of machinery he worked on no longer exists.

“A lot has changed,” added Mr. Ogg. “If he’s been stuck in one place for 30 years, he’s going to need help to get to the next level.”

Trade Adjustment Assistance was meant to do just that: help workers who need new skills to compete in a more global economy. The program offered income support to workers who lost their jobs and exhausted unemployment benefits while training for other jobs. Those who are age 50 or older and accept lower-paying jobs may qualify for a wage insurance program that temporarily increased their take-home pay.

Some academic research has found benefits for those who signed up for the program. Workers gave up about $10,000 in income while they were in training, but 10 years later had about $50,000 higher cumulative income relative to those who didn’t retrain, according to 2018 research by Benjamin G. Hyman, an economist at the Bank. of the New York Federal Reserve. .

Still, those relative gains fell off over time, Hyman’s research shows. After 10 years, the incomes of those who received assistance and those who did not were the same, perhaps because the jobs workers at TAA were trained for had already become obsolete as a result of automation and business competition. However, Mr. Hyman concluded that the program’s earnings returns “may be higher and more effective than previously thought.”

The program fell victim to concerns about its cost and efficiency, as well as what was left out of the broader package of trade legislation. In the past, funding for the program was combined with something called the Trade Promotion Authority, which streamlined the process for Congressional approval of new US trade deals.

The combination of the Trade Promotion Authority and Trade Adjustment Assistance was a policy formula that worked for decades, said Edward Alden, a senior fellow at the Council on Foreign Relations. The presidents promised companies greater access to foreign markets and pledged to provide unions and their supporters with compensation if jobs were lost in the process.

But American views on trade have grown more negative in recent years, as China began to dominate global industries and income inequality widened. Democrats are so disillusioned with the effects of global trade and divided by its benefits that the Biden administration has refused to push any new deals.

Before drafting new trade deals, Biden said he would first focus on boosting American competitiveness, including through investment in infrastructure, clean energy and research and development. And when the Trade Promotion Authority expired last year, Biden administration officials did not press Congress to reauthorize it.

Some Republicans are wary of reapproving trade adjustment assistance at a time when the president shows little intention of opening up new business opportunities abroad through trade deals.

“The United States is on the sidelines right now on trade, and President Biden’s moratorium on new trade deals seems firm,” Rep. Kevin Brady, R-Texas, told reporters late last month. “There would have to be a much stronger ironclad commitment to resume American leadership on trade to even start this discussion on extending the TAA”

“We’re open to creative ideas here, but if we don’t have a serious and meaningful trade agenda that opens markets for American workers, the TAA doesn’t make much sense,” Brady added.

Mr. Biden’s plans to boost American competitiveness have only been partially fulfilled. While Congress has approved billions of dollars for new infrastructure investment, other aspects of the president’s domestic agenda, including financing for the energy transition, have collapsed. Lawmakers have struggled to muster support even for legislation in favor of expanded funding for the semiconductor industry, which is seen as key to US industry and national security.

With so many other legislative goals at stake, ending a decades-old solution to free trade trade-offs has received little attention.

“The old consensus on trade is gone,” said Alden of the Council on Foreign Relations. “And we don’t have a new one.”

Catie Edmondson contributed report.

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