When Congress passed a trade bill three years ago, it included a program of special aid to U.S. workers who lost their jobs to foreign imports, which the bill didn't limit.
One beneficiary is Jack Hughes, an unemployed shoe factory worker in Portsmith, Ohio. He got the maximum the government can give under the trade adjustment assistance program.
And how much was that? A total of $1,352, or 52 payments of $26 a week. Now, the payments have run out, he's still unemployed, and at age 52, Hughes says he has nowhere to turn.
"Adjustment assistance was a help," he said, "but I'm depressed and tore up, and it ain't much fun sitting on the porch doing nothin'."
Foreign imports have left a lot of American workers "doing nothin'." Of all the shoes sold in the United States last year, 46 per cent were imports. Japanese color television imports increased to 37 per cent of the market in 1976, almost doubling the 1975 figure. In the 10 years ended in 1975, automobile imports rose from 6 per cent to 26 per cent. Textile, steel and sugar imports also have been rising.
More than 70,000 U.S. shoe workers have lost their jobs since 1968, as well as 70,000 in the television industry. No one knows what the figure is for the entire economy.
But even though 50 to 80 per cent of the workers are employed again representatives from organized labor say and federal officials concede that trade adjustment assistance is a failure.
Among the main critcisms are:
The program was supposed to retrain workers for new jobs and tide them over till they got them or returned to their jobs. But few workers have received benefits - less than half of those who applied - and the payments have amounted to little more than welfare payments.
Adjustment assistance was also supposed to give aid to individual companies hurt by foreign imports. But critics call this aid "burial payments," because those that qualify for technical assistance or loans to convert to other manufacturing are usually in so much trouble that recovery is unlikely. Firms must show they can't get commercial loans, but must guarantee repayment of federal loans, often at interest higher than the prime rate.
Quirks in the law exclude workers who should be entitled to assistance, particularly those who manufacture component parts for items affected by imports. The way the law is written, workers who make tubes for televisions or bumpers for cars, for example, aren't eligible for aid because those parts aren't "like or directly competitive to" the imports causing the problem.
But televisions enter this country with tubes already assembled, just as cars come in with bumpers. A plant that made tubes in Albion, Mich., closed because of imports, but the 600 workers who lost their jobs couldn't get aid. Similarly, half the workers in a bumper plant in Huntington, W. Va., were laid off and declared ineligible.
Other workers have been denied assistance because they waited too long to apply or had been laid off a week or two before it was determined the layoff was caused by imports.
A recent General Accounting Office evaluation of the program revealed poor coordination between the Labor Department, which administers the program to workers (Commerce Department does it for firms and communities) and state employment offices, which decide how much money workers are entitled to.
The state offices add the adjustment payments to unemployment payments, and are reimbursed by the federal government. But GAO found that these local offices often knew little about the program and did not suggest it to workers. And they have little incentive to promote it, because they get nothing for doing so, except added paperwork.
The most money a worker can get is 70 per cent of his or her weekly salary - but not more than the average weekly manfacturing wage ($212 as of May). That amount is reduced by whatever unemployment compensation the worker gets or is eligible for.
Because of administrative delay and because many workers are back on the job, the average allowance amounts to only about two or three months of retroactive payments. That's partly because the auto and steel industry account for about 65 per cent of the workers who qualify, and those workers usually aren't laid off for very long.
Those industries have strong unions that know about the program and are quick to get the maximum benefits possible, even though they would prefer tariffs or import quotas to the assistance program. Unorganized workers, women and other minorities, are usually hurt the most.
From April 3, 1975, when the new program got under way, until June 30 of this year, the Labor Department received 2,185 petitions for assistance, covering an estimate 499,430 workers. Of those, the department certified as eligible for aid 735 requests covering an estimated 220,693 workers - about 44 per cent - with payments totaling about $249 million.
"It's a pitiful performance, when you consider a labor force of 100 million people," said an AFL-CIO economist who asked not to be identified. "We've had all these promises, but they're giving aid to 100,000 workers a year. That's one-tenth of 1 per cent of the labor force and doesn't even scratch the surface of the displacement problem."
The figures for aid to firms and communities are even more startling. As of April 30, 18 firms were approved for assistance, for a total of $19.1 million. And of the two communities that applied for assistance, both were denied.
In April, President Carter directed a special task force to review the program and recommend to him administrative changes as well as legislation to correct abuses and expand benefits. Since then, officials in the departments of Labor and Commerce and Special Trade Representative Robert Strauss's office have been doing that, and hope to send their proposals to the White House shortly after Labor Day.
Trade adjustment assistance first began in 1962 as part of the Trade Expansion Act. But the Labor Department denied the first six worker petitions, and didn't pay anything during the first seven years. Between 1969 and 1974, the department certified 54,000 workers and paid $85 million in benefits.
The Trade Act of 1974, under which the new program was established, ceased the eligibility requirements. Now, for workers to get benefits, imports would only have to "contribute importantly" to job layoffs, rather than be the "major cause" - the key phrase under the old law.
"it is not adjustment to a different job, it's welfare," Rudolph Oswald, research director for the AFL-CIO, said last April in testimony before a House subcommittee.
"Adjustment assistance is the declaration of a job eliminated forever and not replaced. Adjustment assistance - in its scale today - is an admission that U.S. trade law changes have allowed the erosion of industries, the loss of occupations, the loss of wages and family security in health care, pension security and self-esteem for millions of Americans."
Howard Samuels, under secretary of labor for international affairs and one of those working on the new proposals President Carter, said in a telephone interview:
"The program as it performed for the last two years is clearing inadequate.It's a hell of a lot better than the old program, but's it's simply not enough to do the job."
Aside from weekly benefits, adjustment assistance was supposed to provide funds for job retraining, job searching and relocation.
Again, a look at the figures suggests shortcomings: in two years less than $1.1 million was spent for workers to learn new skills (half of which went for tuition and books at community colleges). And, $125,000 went to workers who moved to new comunities to find work, and $40,000 was spent on workers looking outside their hone areas.
Another example: the COmmerce Department said it sent letters to 589 shoe companies in May, 1976, advising them of technical assistance and loans to companies hurt by imports. Commerce said it expected responses from about 200, will perhaps 150 eligible. Instead, 60 firms requested petition, and of those, 10 filled them out and returned.
All this could change if administration officials are serious about changing the program and their recommendations can be converted into law. Spokesmen at the Labor and Commerce department including Samuels and Jerry Jasinowski, assistant secretary of commmerce for policy, talk about these kinds of changes:
An early identification system to pinpoint where imports could cause problems for workers, firms and communities, coupled with a commitment to get information about the program.
A new emphasis on rebuilding communities and creating jobs, rather than handing out money. This would include easing the requirements for communities to qualify for assistance.
New legislation to include more workers so that those who manufacture component parts, for example, can get aid.
Public service employment as a last resort for workers too old to learn new skills or to move elsewhere for a job, and fringe benefits, such as health and life insurance. This proposal, however, does not have unanimous support.
More staff to expedite processing worker petitions, clear up administration among federal agencies.
On July 20, Carter administration announced a three-year, $56 million subsidy program for the shoe in lion subsidy program for the shoe company executives on how to modernize their plants and become more efficient in marketing, production and finance.
Commerce officials and shoe industry spokesmen believe this program, coupled with the orderly marketing agreements that trade representative Strauss has negotiated recently with Korea and Taiwan (under which they cut back their imports by about 20 per cent), will give the industry a "breathing spell." This would make adjustment assistance meaningful because the industry would not be in a state of collapse, and the workers would have jobs to return to the officials say. But not everyone is that optimistic.