America’s Safety Net for Workers Hurt by Globalization Is Falling Apart

Washington — In September, Jeff Ogg’s lighting plant in Logan, Ohio, which had been timed almost every day for the past 37 years, closed its doors due to the transition from fluorescent to LED technology. Cheap in China.

At the age of 57, Mr. Ogg is not yet ready to retire. But when he applied for a national retraining program to help workers who lost their jobs in foreign competition, he was disappointed to see his application rejected. The review follow-up request was immediately rejected.

The program Ogg sought help with, known as trade coordination assistance, has been America’s leading antidote to the pressure globalization has released on workers for the past 60 years.more Over 5 million workers I have been participating in the program since it started.

However, the program is at stake due to a lack of congressional funding. Trade assistance, which continues to provide temporary services to currently registered people, officially ended on July 1. Unless Congress approves new money for the $ 700 million program, it will be completely nonexistent.

Founded in 1962, Trade Assistance was aimed at helping factories and other jobs move more and more abroad as companies chased cheap workers outside the United States. We provide services such as retraining subsidies, employment support, health insurance tax credits, and relocation allowances.

However, due to lack of funding, such as limiting who is eligible for assistance, the benefits it offers are gradually diminishing. one year ago, The program is Despite the rush of offshoring as companies place call centers and accounting departments abroad, they are limited to those who manufacture goods, with the exception of workers in the service department. In addition, only those who have changed jobs to countries that have free trade agreements with the United States (such as Canada and Mexico, which are not China) are eligible for assistance.

On July 1, the program will suspend the review of new applications, suspend appeals from workers whose applications have been rejected, and will be phased out gradually.

Often criticized for being inefficient and bureaucratic, it has been the country’s main answer to trade competition for decades. Its disappearance can make thousands of workers unable to receive critical assistance in looking for new jobs. 2021, Ministry of Labor Authenticated 801 petitions for trade adjustment assistance from various workplaces for an estimated 107,454 American workers.

The decision to reapprove the program was the victim of a fierce parliamentary battle over what to include in a vast bill aimed at making the United States more competitive with China. At the heart of the law is $ 52 billion in funding for U.S. semiconductor manufacturing, but lawmakers are clashing over whether to include various other trade-related provisions, such as funding for worker retraining. increase.

The Democratic Party of the House of Representatives has proposed including other trade clauses, including measures to send US technology abroad and strengthen scrutiny of foreign investment that could eliminate tariff exemptions. Small-value items imported from China..

On Tuesday, the Senate resolved to proceed with a smaller legislative package, including funding the chip industry and broader R & D, but lacked funding for trade coordination assistance or other trade-related measures. Was there. The tip method requires further approval in both the House of Representatives and the Senate.

Proponents of Trade Adjustment Assistance say they will not stop seeking its reapproval, and funding the program may still be included in other laws.

Ohio Democratic Senator Sherrod Brown has accused Republicans of “taking the TAA hostage” and said he would continue to fight to reapprove the program.

“They sold out the American manufacturing industry many times by voting for trade agreements and tax policies that send jobs abroad, and they got jobs because of those bad trade agreements,” Brown said in an email. It continues to block investments to empower lost workers. ” .. “TAA serves workers who have changed their lives due to their own negligence, such as workers in Logan, Ohio.”

The program and its benefits are already out of reach for Mr. Ogg and the other 50 who work at the Logan factory, which manufactures glass tubes for fluorescent lighting fixtures that were once popular in schools and offices. In recent years, factories have tried to move to the manufacture of LED lights, but found that these lights are cheaper to buy from abroad.

“Our factory, our people, most of them have been there for over 25 years,” said Ogg, chairman of the local United Steelworkers. “You have been working in the same place for a long time, that’s all you know.”

Ogg said he wasn’t dissatisfied with his career at the factory and estimated average wages to be between $ 25 and $ 30 per hour, which is enough to buy a home and raise three children. .. But he is not sure what to do next. He used to work as a mechanic, but he said the kind of machine he worked on no longer exists.

“There have been many changes,” Ogg added. “If you’ve been stuck in one place for more than 30 years, you’ll need some help to move on to the next level.”

Trade Adjustment Assistance was aimed at doing just that — helping workers who need new skills to compete in a more globalized economy. The program provided income support to workers who lost their jobs while retraining for other jobs and ran out of unemployment benefits. People over the age of 50 who work in low-paying jobs can qualify for a wage insurance program that temporarily raises takeaway wages.

Some academic research has benefited those who enrolled in the program. Workers gave up about $ 10,000 in income during training, but ten years later, their cumulative income was about $ 50,000 higher than those who did not retrain. research From 2018, by Benjamin G. Heymann, Federal Reserve Bank of New York economist.

Still, these relative benefits have diminished over time, Heymann’s study shows. Ten years later, the incomes of those who received and those who did not were not the same. Perhaps TAA-trained workers are already obsolete as a result of automation and trade competition. Still, Heimann concluded that the revenue from the program “may be greater and more effective than previously thought.”

The program has come at the expense of its cost and efficiency, as well as concerns about what has been excluded from the broader package of trade law. In the past, funding the program was combined with what is called a trade promotion authority that streamlines the process of parliamentary approval of the new US trade agreement.

Edward Alden, a senior researcher at the Council on Foreign Relations, said the combination of trade promotion and trade adjustment assistance was a political formula that worked for decades. The president promised businesses more access to foreign markets and provided compensation to trade unions and their supporters in the process of unemployment.

But America’s view of trade Becoming more negative In recent years, as China has begun to dominate the world’s industry and income inequality has increased. Democrats were disillusioned with the effects of world trade and split their interests, so the Biden administration refused to promote the new agreement.

Before writing a new trade deal, Biden said he would first focus on increasing America’s competitiveness, including investment in infrastructure, clean energy and R & D.And the trade promotion authority Expired last yearBiden administration officials did not urge Congress to reapprove it.

Some Republicans oppose the reapproval of trade adjustment assistance at a time when the president has little intention of opening new foreign business opportunities through trade agreements.

“The United States is currently on the sidelines of trade, and President Biden’s new trade deal moratorium looks solid,” Texas Republican Rep. Kevin Brady told reporters late last month. “To begin this debate on the expansion of TAA, we will need a much stronger ironclad commitment to resume US leadership in trade.”

“We are embracing creative ideas here, but without a serious and important trade agenda that opens the market for American workers, TAA doesn’t make much sense,” Brady added.

Mr. Biden’s plan to increase America’s competitiveness has only been partially realized.Congress approved Other aspects of the president’s domestic agenda, including billions of dollars for new infrastructure investment and financing for energy transformation, have collapsed. Parliamentarians have struggled to gain legal support in support of increased funding for the semiconductor industry, which is widely regarded as the key to US industry and national security.

The end of decades-old solutions to the economic trade-offs of free trade has received little attention, as many other legislative goals are at stake.

“The old consensus on trade is gone,” said Alden of the Council on Foreign Relations. “And there is nothing new.”

Katie Edmondson Report that contributed.