Wednesday, September 09, 2015
Trade Adjustment Assistance (TAA)
Summary: Why the Trade Adjustment Assistance program is viewed as ineffective and how Congress can amend it.
I am a former TAA benefit recipient, in theory and on paper, following a 2008 factory shut down by Dell Inc. in Austin, TX. The initial seamless transition from Dell to my next employer the week after the layoff was pushed back until 4 months later. It was during this period that I drew Unemployment Insurance. (see White House blog by Jeffrey Zients article on TAA)
It was during a session at Texas Workforce Commission (TWC) with a Career Specialist that I was informed about the funds available for me through my TAA benefit. I was informed that there was no expiration date on this benefit; a seriously wrong bit of information repeated often by that Career Specialist. The benefit expired without being of any benefit for me. Yet, in theory and in paper I expect I am counted as a TAA benefit participant "hurt" by this program.
Congress has the opportunity to reauthorize the TAA program before September 30, 2015 when it is due to expire.
The TAA impact evaluations, cited in 2014 by David B. Muhlhausen, Ph. D. and James Sherk from The Heritage Foundation, by Paul T. Decker, Leah E. Marcel and Kara M. Reynolds all seem to corroborate each other's related conclusions on the ineffectiveness of TAA, namely, that TAA training 1) had no effect on raising the earnings of participants, and 2) "little evidence that it helps displaced workers find new, well-paying employment opportunities." (Reynolds) This is true. Why is it true and is the decision to let TAA benefits expire a true response to what seemed an ineffective program? A related and valid question is how much of the one billion dollars which Congress authorized for TAA was "wasted," that is, actually paid out to TAA participants? What about funds which were never dispersed?
Yes, I can heartily concur with their conclusions and I can attest that my experience with TAA, in theory and on paper, resulted in neither raising my earnings nor well-paying opportunities. The reason for this result and that of other TAA participants is directly related to the flawed way as to how the TAA benefit was designed.
For example, I lost my employment in international export. I decided to pursue a Project Management credential through the TAA benefit; a field in which I had no experience. The response from TWC was that the area which I chose for training under TAA must be one in which I had experience. Really. How many training programs are out there for training in the non-academic, eight years experience, same job, same pay which I already know how to do? Hence, the worker's future is to turn him or her back into the same job, same pay just as indicated by the TAA impact evaluations and which result in no raise in earnings and no well-paying opportunities. One can only wonder about this turnstile design of the TAA benefit program which turns back participants and leaves untold millions or hundreds of millions of the $1 billion which were never dispersed.
The conclusions of the TAA impact evaluations are themselves ineffective and wasteful because although they corroborate each other they fail to reveal a true and fruitful understanding of the reason why the TAA benefit was ineffective and wasteful. It is egregious to urge Congress to stop, "a program that does not help—and may hurt—unemployed workers." Really. In hindsight, given how the TAA benefit was designed doing away with it hardly relieves the economic hurt experienced by affected workers anymore than the TAA program hurts displaced workers. Congress has the authority to reauthorize the TAA benefit and amend it so that participants can indeed train for positions in which they do not have experience. This is no different than high school and college graduates when they enter the job market without experience. This proposed emendation to make the TAA benefit program effective is evident whether quasi-experimental evaluation or scientifically rigorous evaluations are employed to examine the effectiveness of the TAA benefit program.