Aid May Grow for Laid-Off Workers
Monday, July 23, 2007
As part of their campaign to soothe an anxious middle class, congressional Democrats are preparing legislation that would significantly expand federal aid to the most obvious victims of the global economy: workers whose jobs move offshore or are lost to foreign imports.
Under a Senate bill to be introduced today, computer programmers, call-center staffers and other service-sector workers who make up the vast majority of the nation's workforce would for the first time be eligible for a generous package of income, health and retraining benefits currently reserved for manufacturing workers who lose their jobs to international trade.
Democrats say the expansion of the Trade Adjustment Assistance (TAA) program would begin to reweave the social safety net for the 21st century, as advances permit more industries to take advantage of cheap foreign labor -- even for skilled, white-collar work. By providing special compensation to more of globalization's losers and retraining them for stable jobs at home, they say, an expanded program could begin to ease the resentment and insecurity arising from the new economy.
A similar bill is nearing completion in the House, and Democrats hope to approve the expansion before the program expires Sept. 30. Trade Adjustment Assistance typically gets strong bipartisan support; Sen. Olympia J. Snowe (R-Maine) is co-sponsoring the bill with Sen. Max Baucus (D-Mont.).
But this year, rancorous politics have developed around broader trade issues, threatening the proposed expansion and, potentially, the program's survival.
"This is not going to be a slam-dunk," said Howard Rosen, executive director of the nonprofit Trade Adjustment Assistance Coalition.
The program, established as part of the Trade Expansion Act of 1962, is the nation's primary source of aid to workers who lose their jobs to foreign competition. Laid-off manufacturing workers must demonstrate to the Labor Department that they lost their jobs because of foreign imports or a decision to shift production to a U.S. trading partner subject to a free-trade agreement.
If their applications are approved, workers can receive two years of benefits on top of state unemployment payments, which typically last six months. The benefits include income support payments, job training, job search and relocation assistance, and a tax credit that covers 65 percent of monthly health-insurance premiums. Workers over 50 who take a new job at lower pay are eligible for wage insurance, which makes up half the difference between their old salary and the new one, up to a maximum of $5,000 a year, for two years.
Last year, the Labor Department approved 1,400 petitions covering about 400,000 workers, according to a recent study by the Government Accountability Office, though fewer than 100,000 workers sought and received benefits. The agency denied 800 petitions, mainly because the workers did not produce "an article" and hence fulfill the basic definition of a manufacturing worker. Most of the denials involved two industries, the GAO said: business services such as computer programming and airport-related services such as aircraft maintenance.
"Trade Adjustment Assistance was created in the 1960s, but today's workers live in a different world," Baucus, the bill's chief author and chairman of the Senate Finance Committee, said in a written statement. "TAA should be flexible enough to respond to workers' needs regardless of what they do or where challenges are coming from."
Baucus's proposal, in addition to extending benefits to service workers, would eliminate the rule that reserves benefits for jobs lost to U.S. trading partners. Help would be available for any worker whose job moves anywhere overseas. The bill also would streamline the application process for hard-hit industries, allowing the Labor Department to certify workers industry-wide.
The bill also would improve some benefits while making them easier to claim. The health-insurance tax credit would be increased to cover 85 percent of monthly premiums, making maintaining health coverage more affordable. And workers as young as 40 would be eligible for up to $6,000 a year in wage insurance if they accept new jobs at lower pay.