Tuesday, June 07, 2005

Helping Those Hurt by Free Trade

Over the last 50 years, free trade has been a boon to America according to economists Gary Clyde Hufbauer and Paul L.E. Grieco. Writing for The Washington Post, the two experts explain how free trade has added over $1 trillion to our economy. Of course, these effects have been diffuse and hard to notice while job loses due to free trade have been concentrated and easily identifiable.

All said, the benefits of free trade far outweigh the consequences, but Hufbauer and Grieco say this doesn’t mean we, as a society, are absolved from helping those whose jobs move overseas. They conclude:

America's national interest will best be served by staying the course of free trade and investment. At the same time, it is morally imperative to address private losses incurred by dislocated workers.

Currently, the federal Employment and Training Administration spends around $11 billion a year on training and unemployment insurance. Of that, about $1.4 billion goes to help dislocated workers as part of the $5.1 billion spent on all employment assistance, known as the Workforce Investment Act (WIA).

Generally speaking, the best kind of assistance government can provide is to help people help themselves. Government training programs would seem to meet that requirement. But, as many have noted, government training is not all that effective, the main criticism being that WIA is not particularly adept at identifying the types of employers most in need of employees or the types of training that would be most useful to unemployed workers. Just a casual visit to ETA’s site reveals a complex web of programs, grants and assistance that has been developed and incrementally fiddled with for decades.

Under the current system, the federal government simply lacks the flexibility necessary to provide the breadth and depth of employment services unemployed workers really need. Given the changing nature of our economy, we need to develop a better method of helping the unemployed, particularly those displaced by free trade.

Less reliance on the federal government and greater reliance on the states to find creative solutions would be a good step. Greater involvement by private employment agencies and for-profit job training centers would also serve to make the system more aware of changes in the job marketplace. And, of course, any program should require significant motivation and self-reliance on the part of the worker being assisted. These programs shouldn’t exist to guarantee jobs. These programs should exist only to help workers identify and obtain the skills necessary to enter a new profession.

Free trade is very good for America. But we do indeed have a responsibility to help cushion the blow to workers negatively effected. We just need to do it better.


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