Trade has winners and losers. For the most part, the winners are U.S. consumers: we typically get much cheaper goods from abroad. And many American companies also benefit, selling more products overseas, even hiring extra workers. But there are plenty of losers in this process too, and those people often belong to big groups that lose in big ways. As we are constantly reminded in the current debates over the decline of the American middle class, across many regions of the country factories have been closing for decades, while the jobs they once provided are shipped overseas… to the very places where we now get those cheap products that consumers enjoys.
So how do we make trade actually benefit everyone. Some consider the following proposal as an idea that makes a lot of sense: take some of the money, some of the gains, from the people who have benefitted from trade and give it to the losers.
Sound unrealistic? As it turns out, this isn’t just a theoretical idea. It’s an entire government program.
Since 1974, the Trade Adjustment Assistance (TAA) program has given support to workers who’ve lost their jobs as a result of trade policy. TAA is considered the gold standard of retraining programs. From a certain perspective, workers who lose employment because of trade are in a far better position than counterparts who lose their jobs from other reasons: recession, bad management, whatever. Because those who lose their jobs to trade qualify for TAA, which means the government will help them land a job in an industry that isn’t dying. TAA actually pays for school and training, relocation and job-seeking expenses, and many other expenses needed to help a former factory worker find a new job that’s not at risk of being outsourced.
So why don’t we hear more about this program? Why does it seem like there’s no hope, and no prospects for workers after factories are shut down because of trade?
On a recent episode of Planet Money, journalists tackled this very issue. The episode “Retraining Day” explored life and work one of the cities where trade has had a major impact: Erie, Pennsylvania. When General Electric downsized a locomotive factory in the city, 1,500 people lost their jobs. Many of them were eligible for TAA benefits. But unfortunately things aren’t going as smoothly as the system might suggest. Planet Money explains why: http://www.npr.org/sections/money/2017/01/27/512060753/episode-750-retraining-day