Restricting Trade Act Benefits to Import-Affected Workers Who Cannot Find a Job Can Save Millions

HRD-80-11: Published: Jan 15, 1980. Publicly Released: Jan 15, 1980.

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The worker adjustment assistance program provides weekly cash payments, training, and employment services to workers whose employment is affected by import competition. Workers whose jobs are adversely affected by import competition can receive benefits under the Trade Act of 1974: weekly cash allowances; employment services, including counseling, training, and job referral; and job search and relocation allowances.

Weekly cash payments have helped few workers adjust their changed economic conditions during their layoff because the payments were received by most in the form of a lump-sum after they had returned to work. Most workers indicated that they experienced no severe economic hardship as a result of their layoff and were able to rely on unemployment insurance benefits and other resources to meet their financial needs. Thus, most workers achieved the adjustment envisioned under the Trade Act without the cash assistance provided by it. However, some remained unemployed even after exhausting their unemployment insurance benefits. Few import-affected workers used employment services and job search and relation allowances because they were not aware the services were available to them, had little need for the services because they returned to work or expected to return to work for their former employer, or were willing to move to take advantage of another job in another community. Workers waited an average of 488 days after layoff before receiving cash benefits. This resulted from delays at virtually every stage in the benefit delivery process.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should amend the Trade Act of 1974 to require that import-affected workers exhaust unemployment insurance benefits before receiving up to 52 weeks of cash payments under the Trade Act. Legislation should also be amended to provide that Trade Act benefits be continued at an amount comparable to that received under unemployment insurance, rather than 70 percent of a worker's average weekly gross wage as now prescribed. Congress should amend the Trade Act to: (1) eliminate the minimum work history and wage eligibility criteria and instead require that, to be eligible for adjustment assistance, workers be totally or partially laid off from import-affected employment on or after the date specified, and meet States' eligibility criteria for unemployment insurance; (2) replace complicated benefit calculation formula with a simplified method such as paying Trade Act weekly cash benefits in an amount equal to an individual's unemployment insurance amount.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Labor should take a stronger and more active oversight role to assure that State employment security agencies: inform all import-affected workers of employment services available to them at the time they apply for assistance under the Trade Act; offer counseling to those who are unemployed at the time they apply for benefits to identify their employment service needs; and work with Comprehensive Employment and Training Act sponsors to place more emphasis on providing training. The Secretary of Labor should also: (1) require State employment security agencies to become more involved in precertification activities, particularly those, such as identifying potentially eligible applicants, which are aimed at reducing delays in benefit delivery; (2) provide additional precertification funding for those States which are willing to engage in the broad range of precertification activities suggested in Labor's guidelines; and (3) require State employment security agencies to make greater efforts to notify workers that their petition has been certified, and to encourage workers to file applications for benefits promptly.

    Agency Affected:

 

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