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In theory, trade is a Pareto-improving for an economy as a whole — that is to say, through free trade, some people can be made better off without others being made worse off. Now, that doesn’t necessarily work in practice, unless the losers from trade are compensated by the winners. In theory, Trade Adjustment Assistance ...
In theory, trade is a Pareto-improving for an economy as a whole -- that is to say, through free trade, some people can be made better off without others being made worse off. Now, that doesn't necessarily work in practice, unless the losers from trade are compensated by the winners. In theory, Trade Adjustment Assistance -- a program introduced in 1974 -- provides exactly this form of compensation. According to this Labor Department fact sheet, such benefits include:
In theory, trade is a Pareto-improving for an economy as a whole — that is to say, through free trade, some people can be made better off without others being made worse off. Now, that doesn’t necessarily work in practice, unless the losers from trade are compensated by the winners. In theory, Trade Adjustment Assistance — a program introduced in 1974 — provides exactly this form of compensation. According to this Labor Department fact sheet, such benefits include:
Training for employment in another job or career. Workers may receive up to 104 weeks of approved training in occupational skills, basic or remedial education, or training in literacy or English as a second language. Income Support known as trade readjustment allowances (TRA) are weekly cash payment available for 52 weeks after a worker’s unemployment compensation (UC) benefit is exhausted and during the period in which a worker is participating in an approved full-time training program. Income Support is a combination of UC and TRA benefits for a maximum of 78 weeks (26 weeks for UC and 52 weeks for TRA). Job Search Allowance may be payable to cover expenses incurred in seeking employment outside your normal commuting area. Relocation Allowances provide reimbursement for approved expenses if you are successful in obtaining employment outside your normal commuting area for you to relocate to your new area of employment.
In other words, TAA is designed to facilitate workers let go due to trade pressures to find jobs in more competitive sectors. Sounds great — but it’s not clear that, as currently written, outsourced workers would fit the criteria for inclusion. The criteria are:
(1) that workers have been totally or partially laid off, and (2) that sales or productions have declined, and (3) that increased imports have contributed importantly to worker layoffs.
Since a lot of offshore outsourcing takes place within a single firm, and it increases productivity, I doubt (2) would be met — sales/output would increase and not decrease. Here’s my question to informed readers:
1) Am I reading this correctly? 2) If so, to what extent should the TAA criteria be expanded?
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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