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Trade Adjustment Assistance: Another Ineffective Government Program

“[Trade Adjustment Assistance] is our commitment to workers competing in a globalized economy, and we must immediately extend the improvements that we made in 2009 when Congress returns,” Rep. Sander Levin (D-MI) 15%, the ranking Democrat on the House’s tax-writing committee, said in late December.

The Trade Adjustment Assistance (TAA) program provides job training, relocation allowances, and income maintenance to workers who have lost their jobs due to foreign trade.   These benefits and cash payments are very generous and are available to only a small fraction of laid off workers.  

Liberal politicians often promote ineffective policies that merely sound magnanimous, so Rep. Levin is not alone, but is TAA actually effective at helping displaced workers improve their employment outcomes or acquire jobs with increased earnings?

Unfortunately, the answer appears to be ‘no,’ according various program evaluations.  According to the Heritage Foundation, “there is little empirical support for the notion that TAA improves the employment outcomes of displaced workers.”  TAA participants are actually more likely to earn less after participating in the program.

It is highly questionable that the costs of this program are justified by its dubious successes, or lack thereof.  Yet, Politico reports, Sen. Ron Wyden (D-OR) 10%, who is expected to replace Sen. Max Baucus (D-MT) as chairman of the Senate Finance Committee, said that renewing TAA as part of forthcoming trade promotion authority (TPA) legislation should be a priority.

 

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