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Tech Workers Hurt By Trade Seek Help
by William NewFor years, workers in the U.S. technology industry were the lucky ones whose jobs were plentiful and products strong in the global economy. They were grateful to be a part of something cutting edge and exciting while workers in traditional sectors such as textiles and agriculture moaned about jobs lost to foreigners.
When the tech market fell and U.S. technology companies started moving their more labor-intensive activities overseas, workers began to notice fewer opportunities at home for low- to medium-skilled tech jobs. Still, government and industry officials told them that America wants higher-end jobs for a better future and to let the low-skilled jobs go where they may.
Now in the past year, some higher-end jobs such as software programming also have begun being moved overseas as workers in places like India and China become more skilled and remain willing to work for far less money than their U.S. counterparts. That has led to debate, occurring almost daily on Capitol Hill and elsewhere, over the merit in letting jobs go. U.S. companies maintain that they must do it to compete and that it ultimately creates new U.S. jobs. Unions and others say that the old jobs should not be moved and that new jobs do not exist.
Both sides, however, seem to agree that it is important to aid the transitions of workers whose jobs have been eliminated or are threatened. And that understanding has led to the realization that government help for tech workers is limited.
A Service Worthy Of Government Aid?
Attention has returned to government assistance programs like Trade Adjustment Assistance (TAA), which since 1962 has helped manufacturing companies and workers harmed by floods of imports and, more recently, affected by free-trade agreements signed by the United States. But it does not cover most tech and other service workers.
"Back in 1962, it made sense not to include service workers," said a Senate aide who advocates expanding TAA. "But it has been amended many times to make it more current."
The expansion would exclude workers such as those in hotels and restaurants because their jobs are not generally tied to imports or trade. But it might help those doing "back office" work such as workers in customer-service call centers, as well as those involved in telemedicine and computer programming.
For certified workers, there are several ways to benefit through TAA. Assistance includes income support, job-training tax credits for health insurance, and allowances for job searches and relocation. Some workers can obtain waivers from the obligation to enter training programs in order to obtain benefits.
There also is "wage insurance" for workers older than 50 if their new jobs pay less and their salaries do not exceed $50,000 per year. In addition, there is a separate TAA program run by the Commerce Department for companies that suffer from imports or trade.
From July 1, 2002, through June 30, 2003, 68,500 TAA participants received training, according to a Labor Department spokeswoman. That would be a portion of all who were certified for TAA benefits, and statistics on what they were retrained to do are kept at the state level, she said.
Out-of-work software programmers and other techies who have sought TAA benefits repeatedly have been rejected. Out-of-work software programmers who claim that 10,000 of them were denied TAA benefits have filed a class-action lawsuit against Labor. The department rejected the programmers because the law states that workers must produce "articles," the spokeswoman said.
She added that if software is replicated on compacts discs or diskette for external mass production, it is considered a product or "article," she said. But before that stage, software is an "internal solution" and is considered a service.
The Pitfalls Of Trade Adjustment Assistance
Another complaint about the program is that it does not help if jobs are lost to countries not in a trade agreement with the United States, such as China. Workers must wait until imports of what they used to make surge, which could take months or years, if it happens at all.
"If somebody gives you TAA, it's like buying you a drink at your own funeral," said Greg Woodhead, an economist at the AFL-CIO. He said the program provides "a couple of thousand dollars" but added that finding a new job is not easy. He also criticized the health benefit, which requires unemployed workers in TAA to pay 35 percent of costs. Woodhead said that amount is still too high for many families.
In addition, the program is "grossly underfunded," and the Bush administration has done little to promote it, he said. The funds are typically used before the year is out, which can result in emergency funds being approved. Another problem cited by several sources is that data are uneven or non-existent for TAA, as the onus is on the states.
Several congressional Democrats have taken the lead in trying to help the ex-service workers. Montanan Max Baucus, ranking Democrat on the Senate Finance Committee, has said he intends to introduce legislation to extend TAA to them. In the House, Washington Democrats Adam Smith and Jay Inslee have been working on legislation with Ways and Means Committee ranking Democrat Charles Rangel of New York.
"We want to make it abundantly clear that the laid-off service worker is entitled to equal dignity and assistance as the laid-off manufacturing worker," Inslee said in an interview.
The legislation would subject service workers to existing TAA standards, with modifications. For instance, it would not only recognize the shift in production when a U.S.-based call center is closed and reopened abroad; it also would recognize when a call center is closed and outsourced to a foreign firm under contract, something not currently covered, a Senate aide said.
In addition, as workers currently must enroll in a training program to qualify for the other TAA benefits, the bill would consider whether the waivers to that rule are broad enough to cover highly skilled workers who do not need more education.
The Push To Reform An 'Archaic' System
A similar effort to extend TAA to service workers was tried two years as part of the trade-negotiating authority Congress granted to the president. Republicans blocked that effort.
"This is something the nation has to grapple with," Inslee said. He said the overall amount of funds available under the program probably would need to be increased to cover the addition of service workers but added that in the long run, the government would save money because it is less expensive to have people employed. Workers can be retrained to enter rising fields in the United States like biotechnology, he said.
One industry representative said industry favors TAA changes in order to get free-trade agreements ratified in Congress. And William Bujalos, director of the Pennsylvania-based mid-Atlantic TAA center for companies, counsels businesses to expect jobs to leave and to focus internally on ways to be prepared.
Bujalos said the TAA legislation is "archaic" and should be changed but already should include software makers. "Don't try to call it a service business," he said. "They're making something."
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