Hyper-competitive job market training

Chris Farrell

TEXT OF INTERVIEW

Lisa Napoli: We hear a lot about outsourcing. But what happens to those faceless workers when their jobs are shipped overseas isn't a followup most stories get to.

There is a federal program called Trade Adjustment Assistance. It allocates money to send for people who lose their jobs back to school. Sounds great? Now, changes are being proposed to it. I talked economics correspondent Chris Farrell about them:

Chris Farrell: Oh, it sounds like an absolutely great idea! It's been around since 1962. And what does it do? If you're a manufacturing worker and you lose your job to foreign competition, there's this wonderful program that offers all these benefits that are in addition to filing for unemployment insurance, so that you can get a new job.

Napoli: That sounds good to me, Chris. What's the problem, then?

Farrell: Well, there are a couple of problems. The Trade Adjustment Assistance Program expires in September unless it's continued. Now, this program accounts for 0.03 percent of federal spending — that's about a billion dollars.

We spend hardly anything. It's poorly advertised — and, by the way, it's concentrated in one sector of our economy, the manufacturing sector of our economy. And in case you haven't noticed over the past three decades, we basically have become a service-sector economy.

And with offshoring, you know, of all kind of call centers and other types of service-sector jobs, there's a lot of job loss going on in the service sector. Which is why Congress wants to expand it. That sounds like a good thing. This is Congress — it's become controversial.

Napoli: But what is it that Congress wants to do in expanding this program that's controversial — is it simply just spending more money on it?

Farrell: The issue is, there's a movement by Republicans to tie it to fast-track authority for the president with free-trade agreements. And a lot of Democrats are saying no.

Napoli: Meaning the government wants to expedite trade agreements that could cause more people to lose their jobs — and the "gimmie" on it is that more people get training if they lose their jobs.

Farrell: That's right. So, here's the big problem that I have: Do we really know, and do we really care, whether the worker loses their job because of international competition, technological change or deregulation?

I mean, those three forces together account for a lot of the job turmoil -- why is it that someone is more deserving if they have lost their job to international competition than someone who's lost their job to technological change? Which, by the way, the technological change was probably driven by competition from overseas competitors...

This is a little, tiny Band-Aid in what is a much bigger issue: How do you create a safety net in an economy that has become hyper-competitive?

Napoli: Commentator Chris Farrell is our economics correspondent. In Los Angeles, I'm Lisa Napoli.

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