Congress should be preparing for more job displacement, not less

On July 1, the long-standing Trade Adjustment Assistance (TAA) program expired, marking a symbolic reversal of over a half-century of government support for workers whose jobs are impacted by trade. Unless Congress acts, communities will no longer have access to dedicated funding to help residents recover after mass layoffs. 

While the TAA program’s reach has been modest in recent years, its quiet decline sends a troubling message. Rather than modernizing in the face of new challenges, the government is reneging on its pledge to help workers adapt to a changing economy.  

For 60 years, TAA has served as both an acknowledgment and a reminder that government policies can sometimes, even by design, cause suffering for some workers. When the program was initiated in 1962 as part of global agreements to reduce barriers to trade, the country stood on the precipice of a new era in globalization. Policymakers accurately foresaw that the changes that were coming would not be good for everyone and incorporated TAA in the negotiations as a response. While the TAA program never came close to fully compensating the losers from globalization, at a minimum it provided temporary relief and support to the five million workers it served.  

Last month’s termination represents a marked departure from that commitment. Before the July expiration, the program had been successfully reauthorized at least eight times, spanning both Democratic and Republican administrations. This bipartisan support reflected a shared national sentiment that workers shouldn’t be left alone to weather economic shocks. Indeed, over 2 million U.S. manufacturing jobs were lost between 2001-2019 due to Chinese import competition alone. Of course, this figure does not account for the jobs that have been gained due to trade, but it is informative because communities hit the hardest by these job losses have seen larger increases in drug and alcohol abuse, single parenthood and childhood and adult poverty, among other adverse outcomes.    

While underutilized, the program included many evidence-backed services critical to successful employment transitions — for instance, subsidies for transportation to training or job interviews, relocation assistance and income support for the time taken to do job training. A rigorous 2018 study comparing the labor market outcomes of workers receiving TAA funding with those deemed ineligible found that workers that received TAA had approximately $50,000 more in cumulative earnings after 10 years. 

Indeed, our active labor market programs are rarely ambitious enough. Even before the expiration, the TAA program was systematically weakened. With increasingly restrictive eligibility requirements and a lack of funding available to the state agencies responsible for administering the program, the number of workers deemed eligible steadily declined, even as globalization accelerated. In addition, the program was too often targeted toward traditional classroom-based models and too rarely deployed to support promising models of adult learning, like work-based experiences. 

Unfortunately, TAA is more the norm than the outlier for U.S. human capital policy. For instance, the U.S. ranks among the bottom of the Organization for Economic Cooperation and Development’s economies in public spending to support and stimulate employment. For older workers, the situation is even more dire.

It is ironic that the end of one of America’s main programs to assist dislocated workers comes at a moment of massive global disruption. Rapid technological change is affecting many industries and occupations, with even more automation-induced displacement on the horizon. Trade flows are being disrupted by COVID-19 supply chain shocks and a strong U.S. dollar. In sum, job loss due to structural change is not disappearing, it is accelerating, and workers without college degrees are those most likely to face the headwinds.   

Most recently, Democrats tried to extend TAA through the CHIPS Act, but the bill passed without the extension due to Republican opposition. This leaves only a few legislative paths to passage before the midterm elections. The decision to allow the program to expire would be not just shortsighted, it is symbolically treacherous. Instead of abandoning workers when their employment is disrupted due to factors beyond their control, we should be increasing investments to help them weather these changes. 

Instead, Congress’s inaction sends a message of indifference to wide swaths of our society. That message is ultimately not just bad for our economy, but bad for our democracy too. 

Rachel Lipson is the director of Harvard’s Project on Workforce. Gregory Wright is a fellow at the Brookings Institution where he leads the Workforce of the Future initiative.