COMPETING THROUGH SUSTAINABILITY Disabled by Foreign Competition: The TAA Progra

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COMPETING THROUGH SUSTAINABILITY Disabled by Foreign Competition: The TAA Program Van Buren County in Arkansas has gone through a tough economic stretch. One company that manufactured electrical cable moved all its jobs to Mexico, a second company that processed poultry shut its doors after failing to find sufficient labor, and a third company was wiped out by a tornado. However, in addition to the county's financial troubles, the numbers on disability insurance would also suggest that the country has experienced a catastrophe when it comes to physical injuries. Over 11% of Van Buren County's residents were on disability in 2016 Arkansas is not alone. Along with Missouri, Appalachia, and rural areas of the Deep South, it is part of what has become known as the "American Disability Bel, where some counties have experienced disability rates of over 20%. The average for the United States as a whole in 2016 was 5.2%, but this is still twice as high as the rate in 1990, Research shows that one of the primary transfers of federal funds to states affected by jobs displaced by foreign competition is in the form of disability insurance claims made by people who cannot find new jobs. Thus, disability payments become a form of long-term unemployment insurance for individuals who might have endured some amount of pain in order to work a physically demanding job, but then apply for disability when that job disappears. Many experts now question the degree to which this is sustainable, given all the other pressures on the federal budget. Attention has begun to shift to other federal programs, such as the Trade Adjustment Assistance (TAA) program. TAA is a program offered by the Labor Department to provide money for training to U.S. workers when their jobs move overseas. TAA is not a panacea and has its own problems. For example, it is still a small program, it does not help workers who lose their jobs due to automation, training opportunities have to be locally available, and retrained workers often find new jobs at lower wages. Still, it can help sustain a community. For example, when Alcoa shut down two plants in Washington state, the TAA program helped buffer two towns that might otherwise have faced a fate similar to Van Buren County's DISCUSSION QUESTIONs 1. What other steps might the government take to help individuals find new work when they are displaced by foreign trade? 2. Should employers who move jobs overseas be compelled to contribute to programs like TAA, or should this responsibility just fall on regular taxpayers? SOURCES: T. Black and I. Cota, The Disabled American Worker," Businessweek, December 9, 2016, pp. 24-26; B. Leubsdorf, The Recession's Economic Trauma Has Left Enduring Scars," Wall Street Jourmal, May 9, 2016; "How Do You Solve Kevin's Problem: You Put a Backpack on Him, Businessweek, May 16, 2016, pp. 35 36.

Explanation / Answer

1.In order to help the individuals displaced by foreign trade, government should start the programs that promote hiring of the displaced workers. Government can provide certain incentives for the organizations to promote hiring. Government can also provide tax exemptions to the companies who hire those workers. Another step government can take is to provide training for the displaced employees on latest technologies and help them to get better career. Government can also provide financial assistance for the displaced workers at low interest to start their own business.

2. Yes, the employers who move jobs overseas should be compelled to contribute to programs like TAA, because such move will reduce the tendency to move the jobs. When there is financial loss involved in the decision, the organizations would reanalyze and may change their decision. The regular taxpayers should not be overburdened with the TAA expense because the people who are responsible should be charged for the same.

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