Trade adjustment assistance
Date posted: November 11, 2011
The U.S. and the world have been moving toward more open and freer trade. Although this has benefits, it also certainly costs some workers. Do we have any specific programs for helping workers who have been disadvantaged by the more open world trade? N.C. State University economist Mike Walden responds.
“And before I answer your question … let me give our listeners some context here. I think you’d be hard-pressed to find a state other than North Carolina where this is more of an issue. As many people know — especially people who have lived here a long time — we have lost tens of thousands of jobs in the last few decades in the textile and apparel area and in the furniture area.
“Many of those due to free-trade agreements, where it’s now easier for companies to buy, let’s say, furniture or socks or shirts made in foreign countries. And obviously that’s resulted in many of those households and workers who did those tasks having to retrain or perhaps having to work at lower-paying jobs.
“And the flip side, of course, is that consumers in North Carolina are able to buy their furniture cheaper and their shirts and their socks and their suits cheaper. So, so we’ve had tradeoffs. The idea of trade assistance … is to try to balance those benefits and cost to say, ‘Look, we recognize free-trade does create benefits, but it also creates heavy costs, particularly those people who’ve lost their jobs. So, let’s set some money aside to help those folks who have lost their jobs.’
“And this is called a trade adjustment assistance. In fact Congress just reauthorized it, and it really has gotten bipartisan support. Congress allocates about $500 million a year for trade adjustment assistance.
“Now you do have to qualify. There are very strict rules on who can qualify. The funds can be used for retraining, relocation, if necessary. So the supporters say these goals are very laudable. However, they say it’s just not enough — $500 million for the entire country is not enough.
“So, I think the concept’s here. The question is whether we have the money to back it up.”
Category: Economic Perspective