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Job losses go further than offshoring

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KAI RYSSDAL: How you feel about NAFTA probably depends a lot on how you feel about this question. Is free trade the reason the U.S. is losing blue collar jobs? Or could there be some other things like technology or the efficiencies of innovation that are responsible. Whichever it is, people who have lost their jobs at least in part because of trade deals can get some government help.

Commentator and economist Glenn Hubbard says Congress ought to just let the program die.

GLENN HUBBARD: The Congress is considering a reauthorization and expansion of Trade Adjustment Assistance, a program to assist workers who can show that they lost their jobs because of international trade. Sounds good, right?

Last year, the U.S. economy created about 30 million jobs while eliminating 28 million, for a net gain of about two million jobs. But few serious commentators would point to trade as a primary engine of this job creation and destruction, really a byproduct of our dynamic and competitive economy. Economists are more likely to finger technology than trade in explaining job shifts. For example, going forward, job losses due to offshoring are likely to add less than 5 percent to normal weekly job turnover.

President Reagan pointed this out about Trade Adjustment Assistance. He said “We wind up paying greater benefits to those who lose their jobs because of foreign competition than we do to their friends and neighbors who are hard off due to domestic competition. Anyone must agree that this is unfair.”

And while Congress is keen to talk about Trade Adjustment Assistance, it doesn’t seem so keen on trade.

Increasing traditional unemployment benefits won’t relieve the need to retrain for other occupations. There is a better way forward.

We should make funds available to workers whose job loss is likely to be long lasting for whatever reason. Placed in a Personal Reemployment Account, such funds could be used for individualized training and income support, letting individuals keep the balance if they find a new job quickly gives a reemployment bonus.

We should also pursue tax reforms that would give all workers access to affordable health insurance that’s portable. And, of course, we should redouble our efforts to ensure that all workers have the education and skills to compete in a global economy.

All in all, a better trade.

KAI RYSSDAL: Glenn Hubbard is the dean of the business school at Columbia University. He used to run the Council of Economic Advisors for President Bush.

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