TUESDAY CAME the news that what was previously thought of as an unassuming federal program, trade adjustment assistance, was about to blow the federal budget out of shape (yet again) with an unexpected billion-dollar increase. The story of this program is instructive; like many others, it came into being largely as an element in the negotiations over major changes acted initially in 1962 in order to gain labor support for the Trade Expansion Act, and then liberalized significantly as the price of labor's agreement to the trade act of 1974. The aims of the program are to provide cash (at a more generous rate than ordinary unemployment benefits) and education and retraining to workers displaced by the effects of free trade. These objectives are humane and they make sense. Helping hatters and shoemakers to find other work is certainly smarter than maintaining protectionist trade policies.
The trouble is that, although almost $270 million was spent on the program in 1979 -- and much more is expected to go out this year -- the program is not really addressing the needs and the distress it was meant to relieve. One recent national study found that almost three-fourths of the workers who received trade adjustment assistance (TAA) benefits went back to work at their old firms, apparently at their original jobs. Few industries, it appears, are so affected by trade that they have massive and permanent shutdowns. For the workers who had gone back to their old jobs, the federal government had only financed a temporary layoff at a substantially higher rate than standard unemployment insurance.
The same study also found that half of the beneficiaries got their money only after they had gone back to work.Finally, there was no evidence that the "adjustment" (education and training) part of the program was much used by anyone.
Despite the imprecision of the program, copies of it have begun to spring up. The Redwood Parks Act of 1978 provided handsome cash, education and medical benefits to loggers who lost their jobs. Since it went into effect, loggers with seniority have been vying to be fired in order to enroll in the program.
The policy-makers who agreed to add adjustment assistance to their bills have gone back to concentrating on foreign trade, or national parks, or whatever. If asked, many would probably say that even a badly functioning, expensive program was a small price to pay for such important new policies. Maybe so. But the cost of such measures is mounting. The country cannot afford to keep shoveling out aid that is chronically misdirected and comes to those who actually need it too late.