Job Went Overseas? Tough Luck, Says Congress

Photo: Worker at Exxel Outdoors plantPlayDahlia Greer Public Relations
WATCH Business Report (11.19.09)

Life just got harder for Americans out of work because of foreign competition.

Congress on Saturday failed to extend the Trade Adjustment Assistance program, which provides aid to some 150,000 workers unemployed because their jobs were outsourced overseas or their company couldn't compete with imported goods. In the past two years about 360,000 Americans have qualified for TAA benefits, which include reimbursement for schooling and retraining costs to find jobs in a new and different industry.

The benefits paid vary by state, but an average worker enrolled in a year-long training program gets around $15,000, in addition to what TAA pays for tuition.

Secretary of Labor Hilda Solis, in a Feb. 9 statement urging Congress to extend the program's benefits, called TAA "an essential lifeline" helping trade-impacted workers get job training, placement assistance and income support needed to help them succeed in "a tough job market."

Enough Cuts? Skepticism of Obama Budget

Connie Thompson, 50, knows just how tough that market is.

Until a year ago, Thompson worked at a paper mill in Frenchtown, Mont. She'd logged 27 years there and expected to retire from her job. Then the mill announced it would be closing, and that she and over 400 of her co-workers would be out of work.

Because competition from imported Chinese wood products contributed to the mill's demise, she qualified for assistance under TAA. She got money for tuition and books and is currently earning a degree in criminology and sociology at the University of Montana -- part of her plan to segue into a new career. She calls TAA "a great program."

Originally created in 1974, TAA has been modified and expanded several times. Economist Howard Rosen, executive director of the Trade Adjustment Assistance Coalition and an architect of part of that expansion, says that until a few years ago TAA was "a tiny program" with modest scope. There were only about 50,000 people enrolled in it, and its budget was about a half a billion dollars a year. But as anxieties about job losses due to globalization have increased, the program has expanded.

The biggest changes came in 2009. Up to then, only workers who'd lost jobs in manufacturing could qualify for benefits. After 2009, however, coverage expanded to include service workers and those who lose jobs when their employers shift production overseas. The expansion also gave benefits not just to makers of finished goods but to makers of components. Result: Funding for retraining has almost tripled.

Republican critics of the program, who call it ineffective, have estimated that its continuation would cost $620 million for the remainder of 2011 and $6.5 billion over the next decade.

Extension of the 2009 enhancements came up for a vote in Congress Saturday, but legislators took no action. That outcome was the result of a Byzantine political stalemate, in which extension of TAA was held hostage by Republicans trying to force Democrats to approve a trade deal involving sleeping bags.

At the center of the bag flap is Harry Kazazian, CEO of Alabama sleeping bag maker Exxel Outdoors. He cried foul when a rival Chinese manufacturer shifted some of its bag production to Bangladesh, which, along with more than 100 other developing nations, doesn't have to pay duty on its exports to the U.S. Kazazian appealed to his Senator, Jefferson Sessions, R-Ala., for help. And Sessions, trying to garner enough votes to amend U.S. trade rules, held up the TAA vote.

Kazazian says he has no beef with TAA and thinks it's a worthwhile program. "It's there to take are of people who have been displaced," he says. Further, he supports free trade: "I'm no protectionist." What he's trying to do with Sessions' help, he says, is make sure none of his own workers get displaced by what he sees as unfair competition.

What does Congress' inaction mean for people now receiving TAA benefits?

Nothing, says Rosen, for persons already approved and receiving benefits. They can expect to receive 100 percent of what's been promised them. The rub comes for new applicants. It's unclear for now exactly what will happen to them.

Unless and until Congress determines otherwise, the program's rules for eligibility will revert to what they were before the 2009 enhancements, meaning, for example, that service sector workers will no longer be eligible to qualify. It also means that any new workers accepted to the program will receive reduced benefits (the ones that existed before 2009's enhancements). Further information can be had through the Department of Labor's website.

Rosen sees the cutbacks in TAA as part of a broader trend. "This isn't an isolated story," he says. "All government training programs are going to come under attack in the next two weeks."

The Republican Study Group has on its wish list some $2 billion worth of budget cuts in worker training. Nor are Republicans the only ones trying to cut. The president, in his budget released today, cuts TAA retraining funds in half.

"It's part of an ongoing effort, not some random attack," says Rosen of TAA's reduction. "This is just the beginning of the story."

Judith Mann, 42, is sorry to see TAA pared back.

Mann worked 22 years hand-sewing shoes for San Antonio Shoe in Pittsfield, Maine, until she lost her job to foreign competition. "Manufacturing jobs in this state are just gone," she says.

Now Mann is sticking a toe into a new field--mental health counseling. She's enrolled in Kennebec Valley Community College, and, with TAA paying for her tuition and books, is on her way to getting an associate's degree in mental health. She hopes eventually to pursue a four-year degree and to get a job in social work as a case manager.

Congress' failure to extend the program she views as a mistake. "It's sad," she says, "because honestly, in order to make America stronger, we have to invest in education." In her case, she says, TAA wasn't a program that wasted taxpayers' money. "It helps restructure people's lives."