Kent State Economist Challenges Benefits of Federal Worker Assistance Program
President Donald Trump has already nullified the Trans-Pacific Partnership (TPP) and said he’ll target other international trade deals like the North American Free Trade Agreement (NAFTA) for dramatic alterations or elimination.
His position on the agreements is based on the belief that many American workers have lost their jobs to foreign workers with lower wages as companies moved operations overseas.
Kent State University Associate Professor of Economics Jooyoun Park is among those waiting to see what Trump’s agenda will bring, and especially how his policies will affect programs that help unemployed workers.
Park studies the trade side of international economics, the labor market in particular. Her focus is the Trade Adjustment Assistance (TAA) program operated by the U.S. Department of Labor. The program provides various benefits — including job training and extended unemployment up to two and a half years — to workers negatively affected by import competition. “If you’ve lost your job to international trade, that’s a good indication that your task is no longer in demand here in the U.S.,” Park said. “That’s where TAA comes in. The TAA provides, among other benefits, job training so you can find a new career path for this very reason.”
Park studies data on people who have received benefits through the program and analyzes whether the program is actually helping the participants. Her research finds that receiving the job training and finding a job in one’s field of training improves one’s earnings potential. However, only a third of trainees manage to find a job in the field in which they were trained. For those who end up with a job unrelated to their training, the TAA program has minimal impacts. “It tells us that we can make the program work better by helping participants make better training program choices,” Park said.
Park said that participating in the TAA program is especially beneficial when the local economy deteriorates. Citing her joint work with Dr. Justin Barnette (Assistant Professor of Economics, Kent State University), Park said “Bad economy hurts just about anyone who’s looking for a job. Whether it’s learning new skills that’s extra helpful or the extra time to stay away from the labor market, TAA program helps the participants weather the storm better than the rest,” said Park.
Park said workers show tendencies to jump from one production job to another, because that’s where the highest income opportunities are found. “Eventually, though, vacancies in those fields become sparse, and you’re still forced to change,” she said. Park said The most popular occupations the TAA participants choose to train in are truck driving, healthcare assistants, administrative assistants/office clerks, and construction related jobs.
Park cautioned though that this forced shift in skills and labor market demographics creates other challenges. “The people who are natives to the transition fields are also negatively impacted,” she said. “So we see huge increases in competition, and people are forced to take lower wages.” Park said that in one case, 800 workers were laid off when the Fruit of the Loom plant shut down in Harlingen, Texas in 2003. The state predicted 25 vacancies in medical assistant jobs in the area, but one training class alone had 85 students that would end up fighting for those positions. In the area, more than a thousand workers received job training as medical assistants, HVAC specialists, or computermaintenance technicians in five-year period. When a community experiences a series of mass layoffs like this, not only the people who are laid off suffer, but also the entire community suffers because a lot of jobs rely on the income the displaced workers used to receive.