America’s Safety Net for Workers Hurt by Globalization Is Falling Apart

WASHINGTON — In September, the lighting factory in Logan, Ohio, where Jeff Ogg has clocked in nearly every day for the last 37 years, will shut its doors, driven out of business by a shift from fluorescent lighting toward LED technology that is often made cheaply in China.

At 57, Mr. Ogg is not yet ready to retire. But when he applied to a national retraining program that helps workers who have lost their jobs to foreign competition, he was dismayed to see his application rejected. A follow-up request for reconsideration was immediately denied.

The program that Mr. Ogg looked to for help, known as Trade Adjustment Assistance, has for the past 60 years been America’s main antidote to the pressures that globalization has unleashed on its workers. More than five million workers have participated in the program since its inception.

But a lack of congressional funding has put the program in jeopardy: Trade assistance was officially terminated on July 1, though it continues to temporarily serve those currently enrolled. Unless Congress approves new money for the $700 million program, it will cease to exist entirely.

Established in 1962, trade assistance was intended to help workers whose factory and other jobs were increasingly moving overseas as companies chased cheap labor outside the United States. It provides services like subsidies for retraining, job search assistance, health coverage tax credits and allowances for relocation.

But the benefits it offers have been gradually scaled back given a lack of funding, including limiting who qualifies for assistance. A year ago, the program was restricted to workers who make goods, excluding those in the services sector, despite the fact that those jobs have also undergone a wave of offshoring as companies locate call centers and accounting departments overseas. In addition, only those whose jobs shifted to countries that have a free-trade agreement with the United States — like Canada and Mexico, but not China — were eligible for assistance.

On July 1, the program stopped reviewing new applications and appeals from workers whose applications have been rejected, and it will gradually be phased out.

While often criticized as inefficient and bureaucratic, the program has been the country’s primary answer to trade competition for decades. Its disappearance may leave thousands of workers without critical support as they seek new jobs. In 2021, the Department of Labor certified 801 petitions for trade adjustment assistance from various workplaces, covering an estimated 107,454 American workers.

The decision over whether to reauthorize the program has become a casualty of an intense fight in Congress over what to include in a sprawling bill aimed at making America more competitive with China. The centerpiece of the legislation is $52 billion in funding for semiconductor manufacturing in the United States, but lawmakers have been clashing over whether to include various other provisions related to trade, such as funding for worker retraining.

House Democrats had proposed including other trade provisions as well, including measures to increase scrutiny on outgoing investments that might send American technology overseas and eliminate tariff exemptions for small-value goods imported from China.

On Tuesday, the Senate voted to advance a smaller legislative package that included funding for the chips industry and broader research and development, but lacked funding for Trade Adjustment Assistance or other trade-related measures. The chips legislation will still require further approval in both the House and Senate.

Supporters of Trade Adjustment Assistance say they will not stop pushing for its reauthorization, and funding for the program could still be included in other legislation.

Senator Sherrod Brown, Democrat from Ohio, blamed Republican lawmakers for “holding T.A.A. hostage” and said he would continue fighting to reauthorize the program.

“They have sold out American manufacturing over and over by voting for trade deals and tax policy that send jobs overseas, and continue to block investments to empower workers who lose their jobs because of those bad trade deals,” Mr. Brown said in emailed remarks. “T.A.A. serves workers — like those in Logan, Ohio — who have their lives upended through no fault of their own.”

The program and its benefits are already out of reach for Mr. Ogg and 50 others who work at the Logan plant, which manufactures the glass tubes in fluorescent lighting fixtures that were once ubiquitous in schools and offices. The plant tried to transition to making LED lights in recent years, but found those lights could be purchased more cheaply from abroad.

“Our plant, our people, most of them have been there 25-plus years,” said Mr. Ogg, who is the president of the local United Steelworkers union. “You work in the same place that long, that’s all you know.”

Mr. Ogg said he had no complaints about his career at the plant, where he estimates the average wage is between $25 and $30 an hour — enough for him to buy a home and raise three children. But he’s feeling unsure about what to do next. He previously worked as a mechanic, but said the type of machinery that he worked on is no longer around.

“A lot has changed,” Mr. Ogg added. “If you’ve been stuck in one place for 30-some years, you’re going to need some help to go to the next level.”

Trade Adjustment Assistance was intended to do just that — help workers who need new skills to compete in a more globalized economy. The program offered income support to workers who have lost their jobs and exhausted unemployment benefits while they retrained for other jobs. Those who are 50 and older who take on lower-paying jobs could qualify for a wage insurance program that temporarily boosted their take-home pay.

Some academic research has found benefits for those who enrolled in the program. Workers gave up about $10,000 in income while training, but 10 years later they had approximately $50,000 higher cumulative earnings relative to those who did not retrain, according to research from 2018 by Benjamin G. Hyman, an economist at the Federal Reserve Bank of New York.

Still, those relative gains decayed over time, Mr. Hyman’s research shows. After 10 years the incomes of those who received assistance and those who did not were the same — perhaps because the jobs workers in T.A.A. trained for have themselves already become obsolete as a result of automation and trade competition. Yet Mr. Hyman concluded that earnings returns from the program “may be larger and more effective than previously thought.”

The program fell victim to concerns over its expense and efficiency, as well as what was left out of the broader package of trade legislation. In the past, the funding for the program was coupled with something called Trade Promotion Authority, which streamlined the process for congressional approval of new U.S. trade agreements.

The combination of Trade Promotion Authority and Trade Adjustment Assistance was a political formula that worked for decades, said Edward Alden, a senior fellow at the Council on Fore­­­ign Relations. Presidents promised businesses more access to foreign markets, and they made commitments to providing labor unions and their supporters with compensation if jobs were lost in the process.

But American views on trade have turned more negative in recent years, as China began dominating global industries and as income inequality widened. Democrats have grown so disillusioned with the effects of global trade and split over its benefits that the Biden administration has declined to push for new pacts.

Before writing any new trade deals, Mr. Biden said he would first focus on boosting American competitiveness, including by investing in infrastructure, clean energy and research and development. And when Trade Promotion Authority expired last year, Biden administration officials did not lobby Congress to reauthorize it.

Some Republicans are balking at re-approving trade adjustment assistance at a time when the president shows little intention to open up new overseas business opportunities through trade agreements.

“America’s on the sidelines right now on trade, and President Biden’s moratorium on new trade agreements seems firm,” Representative Kevin Brady, Republican of Texas, told reporters late last month. “There would have to be a much stronger ironclad commitment to resuming American leadership in trade to even begin this discussion on extending T.A.A.”

“We’re open to creative ideas here, but if we don’t have a serious, significant trade agenda that opens up markets for American workers, T.A.A. doesn’t make much sense,” Mr. Brady added.

Mr. Biden’s plans to boost American competitiveness have only been partially fulfilled. While Congress approved billions of dollars for new infrastructure investments, other aspects of the president’s domestic agenda, including funding for the energy transition, have crumbled. Lawmakers have struggled to amass the support even for legislation in favor of expanded funding for the semiconductor industry, which is widely seen as key to American industry and national security.

With so many other legislative goals at stake, the termination of a decades-old solution to the economic trade-offs of free trade has garnered little attention.

“The old consensus on trade is gone,” said Mr. Alden of the Council on Foreign Relations. “And we don’t have a new one.”

Catie Edmondson contributed reporting.

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