Dislocated Workers:

Improvements Needed in Trade Adjustment Assistance Certification Process

HRD-93-36: Published: Oct 19, 1992. Publicly Released: Oct 19, 1992.

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Carlotta C. Joyner
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Pursuant to a congressional request, GAO reviewed the Department of Labor's certification process for the Trade Adjustment Assistance (TAA) program, focusing on: (1) Labor's investigation of petitions; (2) state assistance to workers in filing petitions; and (3) Labor's application of TAA eligibility criteria.

GAO found that: (1) between 1990 and 1991, 63 percent of the TAA petitions filed contained investigative flaws; (2) flawed investigations denied workers needed assistance or resulted in non-qualified workers receiving benefits; (3) the three steps in the TAA investigative process included determining whether company sales had decreased and if a significant number of workers lost their jobs, determining whether imports or competitive products had increased, and determining whether imports significantly contributed to the company's decline in sales and production; (4) major flaws in the TAA certification process included incomplete, inaccurate, or unsubstantiated data collection, incorrect or omitted analyses of trade statistics, and inadequate or omitted customer surveys; (5) investigative flaws were attributed to time and schedule constraints resulting in data collection and review shortcuts; (6) during 1990 and 1991, few investigative determinations were appealed; (7) states with a high rate of workers filing petitions expended greater amounts of resources on outreach programs, program specialists, and rapid response teams; (8) states with low filing rates provided few outreach services, had undertrained and overworked staff, and lacked adequate program information distribution; and (9) Labor denied those TAA petitioners who provided services or produced component parts for companies directly affected by imports.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Congress is unlikely to change the legislation. However, the Department of Labor has taken action to streamline the certification process. Therefore, GAO considers action to have been completed and recommend closing out this recommendation.

    Matter: If Congress does not adopt the President's proposal, it may wish to consider other alternatives for streamlining the certification process. One alternative it may wish to consider would be to, in effect, modify the legislative definition of "contributed importantly."

  2. Status: Closed - Not Implemented

    Comments: Congress has not taken action on this 1993 recommendation.

    Matter: Given the difficulty in conducting customer surveys, Congress may wish to consider modifying the legislation to allow imports to be deemed to have "contributed importantly" when imports of like or directly competitive products have increased across the market without showing that the employer's customers have shifted to purchasing imported products. This would significantly streamline the certification process and reduce the burden on Labor's investigators. However, this could also result in more dislocated workers becoming eligible for assistance and thus, increase the cost of the TAA program.


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