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Fair Trade Archive: GTW E-Newsletters, Action Alerts, and Updates

Trade Adjustment Assistance (1994-2002)

An estimated 1,113,538 US workers were certified as eligible for the Trade Adjustment Assistance program between 1994 and the end of 2002--the era of NAFTA and the global World Trade Organization (WTO) pacts. This program, established under the Trade Expansion Act of 1962, originally provided assistance to workers who lost their jobs or whose wages had been significantly reduced as a result of increased imports. To qualify, groups of workers at affected facilities first had to apply for certification; if that was granted, then they had to file individual applications for benefits with their local Unemployment Insurance (UI) agency. For the first 12 years of its existence, very few workers received benefits due to rigid eligibility criteria. These were eased in 1974 and between then and 1999 an estimated 3 million workers were certified as eligible for benefits under the program.

Sizeable numbers of workers affected by imports from Canada or Mexico after the implementation of NAFTA are included in these general (non-NAFTA specific) TAA certifications. Some major industrial unions advised their NAFTA-impacted members to apply under the general TAA program because it provided the same benefits as the NAFTA-TAA but had easier administrative requirements. After NAFTA went into effect, workers could apply to be certified under both general TAA and the dedicated NAFTA-TAA, even though they could only receive benefits under one. Our comparison of certification records across NAFTA-TAA and regular TAA found a level of duplication that would make any combination of totals (by state or nationally) from the two databases inaccurate. This, of course, has no impact on the reliability of certification information within each individual program.

It is important to emphasize that relatively few of all eligible workers are likely to have both applied for TAA certification and received benefits. For example, it has been estimated that less than 10 percent of all workers who lost their jobs in import-sensitive manufacturing industries in 1999 received benefits under the TAA program that year (see Howard Rosen, "Reforming Trade Adjustment Assistance" February 26, 2002). Some may not have known about the program, others may have decided not to apply and (as is typical of laid-off manufacturing workers) still others are likely to have moved quickly into lower-paid positions in the service sector without seeking TAA's retraining benefits.

The "Trade Adjustment Assistance Reform Act of 2002" replaced the original program and merged it with the previously separate NAFTA-TAA program. The consolidated program allows certification of new groups of affected workers--including automatic certification of production workers whose employer moved to any country with which the U.S. has a free trade agreement, extremely limited coverage of some secondary workers hurt by a production relocation to either NAFTA country, and farmers and fishermen hurt by increased imports. It also increased benefits to provide an additional 26 weeks of income support for workers on training (to a maximum of 78 weeks after state UI benefits are exhausted), and higher job search and relocation reimbursement. Unfortunately GOP leaders killed a broader health benefit for workers losing jobs to trade and therefore this program only offers a refundable 65 percent tax credit for healthcare costs for the duration of a worker's TAA eligibility (normally not more than two years). In order to take advantage of this benefit, TAA-eligible workers must also have sufficient savings or income to cover their costs which would amount to over 25 percent of their average $800 monthly income support benefit.

Yet this new program still provides unequal access to benefits for workers who are hurt by trade; a worker who loses a job as the result of a production shift to Mexico may be eligible for benefits while a worker whose employer moves his/her plant to China may not be. It also fails to cover the large numbers of permanent and contract high-tech and service workers that have been laid off as a result of increased imports, production facilities being moved abroad, or their jobs being outsourced overseas. Even in manufacturing plants where line workers are eligible for benefits, broad categories of non-production employees (such as those who run the computer systems, transport or box the finished goods, work in the cafeteria, mop the floors, etc.) have no access to benefits.

The consolidated TAA program came into effect at the end of 2002 and data on certifications are available here.

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