1. Archive


Millions of Americans lose their jobs every month for a host of reasons: falling demand for the goods and services they produce, efficiency gains, bad management decisions, a company restructuring.

Foreign competition is way down the list of reasons for job losses, though you would never know that from listening to the politicians debating the issue.

For almost 50 years special benefits have been available to factory workers who can demonstrate that their jobs disappeared because of imports - or in recent years that their employer shifted production to a country with a free-trade agreement with the United States.

This Trade Adjustment Assistance program, or TAA, expires at the end of next month, and some members of Congress want to extend it and make service industry workers eligible for help.

On July 23, Harvard University economist N. Gregory Mankiw, a former chairman of President Bush's Council of Economic Advisers, posted two questions on his Web site:

"Can you really tell whether a worker is losing his job due to trade or due to other forces, such as technological change?

"Is a worker who loses a job due to trade deserving of a more generous safety net than a worker who loses his job due to other forces, such as technological change?"

The answer to the first is often, "No." The answer to the second is simply, "No."

The justification for special assistance for workers hurt by trade is based on the notion that freer trade benefits the nation as a whole even though employees in some industries will suffer.

But what about the effect on jobs of other types of national policies, such as environmental regulations that may cause a plant to close because it isn't economical to upgrade its emissions controls? Or perhaps the limits on cutting old growth forests on public lands in the Pacific Northwest because of damage to spotted owl habitat?

Instead of an expansion of the TAA program, Congress should be examining the adequacy of the safety net for anyone who loses a job in an economy as dynamic as that of the United States.

The Labor Department tracks one group of job losers: those affected by "extended mass layoffs" - layoffs or discharges affecting groups of 50 and up for more than a month with all the workers eligible for unemployment benefits.

In the first three months of this year, only 1,830 workers in such groups became unemployed because their jobs were shifted outside the country. Three times as many jobs were lost because of relocations within the United States.

In an article in the March/April 2006 issue of Foreign Affairs magazine, Princeton University economist Alan Blinder Blinder wrote, "Thinking about adjustment assistance more broadly, the United States may have to repair and thicken the tattered safety net that supports workers who fall off the labor-market trapeze - improving programs ranging from unemployment insurance to job retraining, health insurance, pension and right down to public assistance."

That's an ambitious list. It's what Congress should be thinking about instead of focusing on the loss of jobs somehow linked to trade.