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CTC Statement on Peru and Panama FTAs

TAA Politrix

Trade Adjustment Assistance (TAA), also known as burial insurance, is a targeted federal program for trade-displaced workers: hardly anyone that needs it gets it, hardly anyone that is certified as eligible for it ends up receiving it. Wage insurance, one aspect of a retooled TAA package under consideration, is even sadder, as Thea Lee of the AFL-CIO put it in March testimony to Congress:

Wage insurance does not help workers get good jobs. On the contrary, the most frequently invoked rationale for wage insurance is that it promotes “rapid reemployment” by encouraging workers to look for, consider, and accept lower-paying jobs they would not otherwise take.[1] Getting workers to take bad jobs does not fit within any good jobs strategy we would propose.

In fact, getting workers to take bad jobs is not a worthy objective at all. Our national focus cannot be rapid reemployment to the exclusion of job quality, because this would argue for the elimination of all assistance for displaced workers. It is undoubtedly true that eliminating all assistance for displaced workers would result in more higher-skilled workers finding reemployment more quickly at Wal-Mart and McDonald’s, but this would hardly be a desirable outcome for higher-skilled workers, for the lower-skilled workers they displace, or for the economy as a whole.

Across the political spectrum, over at the National Review, TAA and its associated problems are seen in little better light:

Why does a worker who loses his job to foreign competition have any greater claim on public support than a worker who loses his job to domestic competition? Or, for that matter, a worker who loses his job as a result of technological change in his industry? Or the declining popularity of his product? Sen. Olympia Snowe (R., Maine) argues that we have an obligation to help the worker who loses his job to imports because free trade is a “policy choice.” But this is no answer at all. Allowing domestic competition is a “policy choice” too... An additional problem is that much of the extra money spent will go to federal job-training programs, which may not truly constitute “help” since they rarely have any positive effects on trainees.

So why are we even talking about this crummy program? Well, from today's Inside U.S. Trade:

Ways and Means Committee staff are discussing bringing the Peru and Panama free trade agreements, as well as legislation to reauthorize and expand the Trade Adjustment Assistance (TAA) program, to the House floor to be voted on at or near the same time in the fall, sources said... In the absence of fast track trade negotiating authority, TAA could be used as leverage for action on one or more free trade agreements, sources said. A private-sector source said discussions of this possibility are underway in both the House and Senate. He said that consideration of TAA alongside the FTAs would likely make votes in support of trade pacts easier for many Democrats.

Oh, so that's why we are having this discussion: to facilitate further NAFTA expansions. This is not the first time a TAA-for-FTA deal-making gambit but has been attempted. But as we documented in a report from a few years ago, nearly every member who has made these kinds of deals in the past has been left out in the cold, including over TAA. And as the folks over at Inclusion have been making clear for a while, progressives should be working for universal programs for the unemployed/displaced, rather than trying to do stupid and ineffectual burial insurance programs for targeted groups of workers that are going to have a very hard time accessing even the meager help available from a government that doesn't want to give it to them in any case.

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