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Trade adjustment program will send aid to Asheville, NC workers

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10/17/2011 - Trade adjustment program will send aid to Asheville, NC workers
by Elizabeth Bewley | Gannett - Asheville Citizen Times

 A program that has paid for job training and other aid for thousands of North Carolinians since 2002 will stay alive for at least two more years.

 Congressional Democrats and the Obama administration made renewal of the Trade Adjustment Assistance program a precondition for voting on trade agreements with South Korea, Colombia and Panama. 

Lawmakers approved the renewal and all three trade pacts last week.

The Trade Adjustment Assistance program will get $575 million over two years for training, relocation aid, health insurance tax credits, job-search allowances and other benefits to workers who lose their jobs as a result of foreign trade.

The program provided $88.2 million in benefits to newly unemployed North Carolina workers in fiscal 2010.

More than 14,700 North Carolina workers from about 130 companies were approved to receive trade adjustment aid in 2010, the fifth-highest number in the nation.

From 2003 to 2008, North Carolina ranked No. 1 among states in the number of trade adjustment aid recipients as it lost jobs in textiles and furniture. Those recipients peaked at more than 17,000 in 2007, according to the state's Employment Security Commission.

Now, the top rankings go to Midwestern states hit by losses in the auto industry -- Michigan, with nearly 35,000 enrollees in 2010, and Ohio, with more than 25,000.

The correlation between layoffs and foreign competition is sometimes murky.

"There isn't a very stringent standard for determining causal job loss due to trade," said James Sherk, a senior policy analyst in labor economics at the conservative-leaning Heritage Foundation.

"It's an excessive program and one we can't afford in the time of tight budgets right now," Sherk said. "You are basically singling out a very small section of unemployed workers, only about 1 percent of the unemployed, and saying, 'You are going to get much more generous benefits than the people who lost their jobs because the company went down in the recession or because of changing consumer preferences or new technology.' "

In Buncombe County, the number of workers receiving TAA benefits fell by half from fiscal 2007 to fiscal 2008, the latest year for which data is available. Just 109 people received aid in 2008, compared to 219 the year before.

Experts say that decrease reflects larger trends in the state's economy. The number of new TAA recipients appears to have leveled off after turmoil in the apparel, textiles and furniture industries caused skyrocketing enrollment earlier in the decade, Employment Security Commission spokesman Larry Parker said.

"It may well be that those industries now have shrunk to a point where they're now at a new equilibrium," said Mike Walden, an economist at North Carolina State University. "The losses have been so heavy."

He said the textiles and apparel industries employ about 100,000 workers statewide -- a decrease of 300 or 400 percent from the 1970s. Furniture and textile manufacturers that have survived have largely ceded low-cost products to foreign competitors and now focus on "high-end niche markets," he said.

Now, the state is seeing TAA petitions from other industries.

Last year, roughly 1,000 workers laid off from cigarette manufacturer Philip Morris in Concord enrolled in TAA. That's more than any other company in North Carolina, according to the Labor Department.

About 500 workers enrolled after losing their jobs at Dell Products in Winston-Salem, and another 500 enrolled from Metal Creations in High Point.

Workers from just one company in Asheville -- Unison Engine Components -- qualified for TAA benefits in 2010. None qualified in 2009. But petitions were approved from workers at three Asheville companies in 2003, five in 2004 and four in 2005.

The nonpartisan Government Accountability Office reports the federal government spent about $18 billion on 47 different employment and job training programs in 2009, many of which overlap at least one other program.

TAA is one of the most generous programs, although some enhancements contained in the 2009 economic stimulus expired in February. Unemployed workers who qualify for TAA are eligible for college tuition payments, relocation benefits and health insurance tax credits no t available to other unemployed workers. And they have a longer eligibility period for unemployment benefits.

Still, some say TAA is underfunded and too narrow. They say it focuses mainly on blue-collar workers even though many people who lose jobs to foreign trade work in white-collar jobs.

Even with its generous benefits, some TAA recipients remain unemployed, and those who do find jobs often don't match their previous earnings.

In North Carolina, about 49 percent of recipients were employed within a few months of exiting the program. Their average earnings over six months amounted to $11,506.

A case study by GAO of five plant layoffs in 2003-2004, when the unemployment rate wasn't as high as it is today, found "the majority of re-employed workers in four of the five sites earned less in their new jobs than they had previously earned, but typically replaced about 80 percent or more of their prior earnings."

Some economists point out that even if only half of participants are employed by the program's end -- and even if they are earning less than before -- at least they are employed.

"If you get half of them employed, that might not be an unreasonable expectation," said Walden. "Some of that is simply due to the fact that our economy is struggling."

While trade deals aim to benefit U.S. businesses, they inevitably hurt some sectors, Walden said.

"If you can identify people who've been hurt, who are subject to the costs, and you can take some of benefits to help cover those costs, then that's the logical thing to do," he said.

The revised TAA program will cover 90 percent of job search or relocation costs, up to $1,250. And workers who are paid less than $50,000 annually in their new jobs are eligible for a wage adjustment of up to $10,000 if their previous job paid more.

TAA-eligible workers have up to six months after their layoff or their certification for TAA benefits to decide whether to enroll in training for a new career.

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