TRADE ADJUSTMENT

ASSISTANCE

Improvements

Necessary, but

Programs Cannot Solve

Communities’ LongTerm Problems

Statement of Loren Yager, Director, International Affairs and Trade

United States General Accounting Office

GAO Testimony

Before the Committee on Finance, Subcommittee on

International Trade, U.S. Senate

For Release on Delivery

Expected at

9:30 a.m., EDT

Friday,

July 20, 2001

GAO-01-988T
1 GAO-01-988T Trade Adjustment Assistance

Mr. Chairman and Members of the Subcommittee:

I am pleased to have the opportunity today to discuss our recent work on federal

trade adjustment assistance that we have been undertaking at the Committee’s

request. These programs are designed to help dislocated workers, communities,

and firms adjust to the rapid economic changes that characterize the globalization

of national economies. While globalization has increased the importance of

technology and service sector jobs, it has also resulted in the loss of many

manufacturing jobs as companies that cannot compete with lower-priced imports

go out of business or relocate abroad. The federal government recognizes that,

while the benefits of increased trade are widely dispersed across the economy,

the costs of worker dislocation effects are more localized. This has heightened

concerns about the efficacy of federal trade adjustment assistance efforts.

Today I will draw on information from our earlier report on the Trade Adjustment

Assistance (TAA) program, which covers workers who lost their jobs because of

imports from any country, and the North American Free Trade Agreement

Transitional Adjustment Assistance (NAFTA-TAA) program, which covers only

those workers who have lost their jobs due to increased imports from or a shift of

production to Mexico or Canada.1

 I will also draw on material from our ongoing

work for this Committee, which has focused on case studies in six communities to

learn about their experiences with trade adjustment assistance. Specifically, I will

discuss (1) the nature of trade impacts on communities and the use of benefits

and services under the TAA and NAFTA-TAA programs, (2) the structural

problems that impede effective delivery of those services and benefits, and (3) the

longer-term challenges facing trade-impacted communities.

 

1

See Trade Adjustment Assistance: Trends, Outcomes, and Management Issues in Dislocated

Worker Programs (GAO-01-59, Oct. 13, 2000). We also completed reports on trade adjustment

assistance to communities and firms. See Trade Adjustment Assistance: Opportunities to Improve

the Community Adjustment and Investment Program (GAO/NSIAD-00-229, Sept. 29, 2000) and

Trade Adjustment Assistance: Impact of Federal Assistance to Firms Is Unclear (GAO-01-12, Dec.

15, 2000).
2 GAO-01-988T Trade Adjustment Assistance

Before I get into the specifics of these topics, let me provide a brief summary of

our findings.

Summary

In our ongoing review of communities’ experiences with trade adjustment

assistance, we found about 300 communities that had more than 500 workers

certified for TAA benefits from fiscal years 1994 to 1999. Some communities lost

a large percentage of their jobs in sudden plant closures, while others experienced

rolling layoffs, where a series of smaller plant closures dislocated as many or

more workers but did so more gradually. The number of workers covered by

certifications under both trade adjustment programs averaged about 163,000

annually from fiscal years 1995 through 2000 (see the app. for 1995-2000 data

about payments and service and benefit recipients).

• Apparel and textiles represented about 35 percent of all certified workers,

followed by the oil and gas, electronics, and metal and machinery industries.

• In fiscal year 2000, TAA and NAFTA-TAA benefits to displaced workers

included

-- $255 million in income support for basic and extended trade readjustment

allowances and

-- about $104 million in training support.

TAA and NAFTA-TAA provide substantial assistance to dislocated workers.

However, program administrators and training officials said that the programs

have structural problems that impede effective service delivery. Specifically, they

said that

• the period of time dislocated workers receive income support versus training

benefits is inconsistent (18 and 24 months, respectively), which local officials

and workers said limited training options;
3 GAO-01-988T Trade Adjustment Assistance

• the instability of funding for training benefits results in delayed approval of

training requests; and

• the maintenance of separate TAA and NAFTA-TAA programs is

administratively inefficient and confusing.

We found in our reviews that providing trade adjustment assistance cannot

resolve all the workers’ or communities’ long-term challenges—particularly those

faced by lower-skilled workers and less economically diverse communities. For

example, based on the most recent national data, approximately 80 percent of the

TAA and NAFTA-TAA workers using benefits in fiscal years 1999 and 2000 had a

high school education or less, compared to 42 percent in the overall labor force.

In addition, many of these workers have been out of the educational system for 20

years, and in some communities, many have limited English skills. Because of

these and other challenges, TAA-sponsored training is unlikely to complete the

match between these workers and the kinds of jobs available in the current

economy.

The communities face other longer-term challenges such as improving their

human capital. Community leaders found that there is limited federal and state

assistance to help with economic adjustment. However, even when these

communities received funds, the funds were targeted and not necessarily

designed to address long-term human capital and infrastructure challenges. Many

of these communities had relied on low-skilled manufacturing jobs, which are

disappearing, and now face the difficult task of diversifying their economies. As a

result, many of these communities are attempting to replace the jobs that were

lost to layoffs. At the same time, they are trying to attract higher paying and more

stable service industry jobs. However, while helping dislocated workers is the

immediate challenge, it does not lead to—and may even detract from—the efforts

to achieve a more flexible and highly educated workforce and a more diversified

economy.
4 GAO-01-988T Trade Adjustment Assistance

At the end of my statement, I highlight several matters the Congress may wish to

consider during its reauthorization deliberations.

Background

The TAA and NAFTA-TAA programs assist U.S. workers displaced by foreign

trade and increased imports.2

 The TAA program covers workers who lose their

jobs because of imports from any country, while the NAFTA-TAA program covers

only workers who have lost their jobs because of increased imports from or a

shift of production to Mexico or Canada. In addition to the NAFTA-TAA program

provided for in the North American Free Trade Implementation Act, a Statement

of Administrative Action was issued that made a commitment to provide services

and benefits for “secondary workers.” Such workers are employed at firms that

supply or assemble products produced by directly affected firms certified under

NAFTA-TAA. However, such secondary workers are not eligible for the NAFTATAA program but receive benefits under another dislocated worker program.

Both TAA and NAFTA-TAA programs provide similar benefits such as trade

readjustment allowances (extended income support beyond normal

unemployment insurance benefits), services such as job training, and job search

and relocation allowances. However, the two programs’ rules covering benefits

and services differ.

The Department of Labor oversees both programs and makes final determinations

regarding worker eligibility. Groups of workers or their representatives can

petition the Department of Labor for certification of eligibility to apply for

services or benefits under the program (under NAFTA-TAA, this process begins in

the states). The Department then conducts an investigation to determine if

increased imports have contributed to their loss of employment. Once a TAA or

NAFTA-TAA petition is approved, covered workers must meet several tests

 

2

The current Trade Adjustment Assistance program was created by the Trade Expansion Act of

1962 (P.L. 87-794). It was substantially modified by the Trade Act of 1974 (P.L. 93-618) and the

North American Free Trade Agreement Implementation Act of 1993 (P.L. 103-182).
5 GAO-01-988T Trade Adjustment Assistance

regarding the timing of their layoff and their length of employment with the tradeimpacted firm. Workers can be certified as eligible for both programs but can

claim benefits from only one. The states play a major role by providing program

services and benefits, such as job training and reemployment services.3

 The TAA

and NAFTA-TAA programs together received about $407 million in fiscal year

2001 funding. Workers who lose their jobs for nontrade reasons generally receive

benefits under the Workforce Investment Act program, which will serve an

estimated 927,000 workers in fiscal year 2001 and received about $1.6 billion in

funding.

Generally, TAA and NAFTA-TAA income assistance for a dislocated worker is

equal to the weekly benefits of the state’s unemployment insurance program4

 and

may be paid for up to 52 weeks after the initial 26 weeks (30 weeks in

Massachusetts and Washington state) of unemployment insurance benefits have

been exhausted. Thus, eligible dislocated workers may receive up to 78 weeks (18

months) of cash payments if enrolled in approved training or if eligible for a

training waiver. Dislocated workers also are eligible for up to 104 weeks (2 years)

of training. Therefore, workers do not necessarily receive income assistance

during their entire period of training.

The federal government has also established programs to assist trade-impacted

firms and communities suffering job losses due to changing trade patterns. For

example, the Trade Adjustment Assistance program for firms, established in 1962

and administered by the Department of Commerce’s Economic Development

Administration, provides assistance to firms that can demonstrate that increases

in imports have contributed importantly to layoffs and declines in sales or

production. The TAA for firms program was funded for $10.5 million in fiscal year

2000. In addition, the Community Adjustment and Investment Program was

 

3

See Trade Adjustment Assistance: Trends, Outcomes, and Management Issues in Dislocated

Worker Programs for a more detailed discussion of TAA and NAFTA-TAA certification procedures

and eligibility requirements.
6 GAO-01-988T Trade Adjustment Assistance

established as a result of the 1993 North American Free Trade Agreement

Implementation Act. Under the program, loan guarantees, loans, and grants are

provided to businesses and grantees in eligible counties to help stimulate private

sector employment and growth. Loan guarantees to local businesses have

accounted for the preponderance of financing commitments to date. The program

was established with an initial capitalization of $22.5 million and has received $20

million in additional appropriations to support and expand program activities.

The Congress did not appropriate any funds for the program in fiscal year 2001.

Trade Affects Wide Range of Workers and Communities

Worker Certification Trends—Fiscal Years 1995 Through 2000

The estimated number of workers covered by certifications under both trade

adjustment programs averaged about 163,000 annually from fiscal year 1995 to

2000, reaching a high of about 228,000 in fiscal year 1999 (see table in app.).5

Petitions under the TAA and NAFTA-TAA programs covered an estimated 977,611

workers during fiscal years 1995-2000.6 Many worker groups file for certification

under both programs, and Department of Labor officials estimate that 75 percent

of NAFTA-TAA certified workers are also covered by TAA petitions. Such

workers could be counted twice in the overall program totals if they had been part

of the groups that filed for certification under both programs. From fiscal years

1995 through 1999, these certifications covered workers in apparel and textiles

(35 percent), oil and gas (15 percent), electronics (9 percent), and metal and

 4

Unemployment benefits vary widely among the states. In 1999, the average benefit was an

estimated $202 per week.

5

By way of comparison, between January 1997 through December 1999, 1 million factory workers

lost jobs in the United States, according to the Bureau of Labor Statistics. These job losses

accounted for about one in every three job displacements in the country during that period.

6

These certifications represent potentially affected workersnot actual jobs lost. In some cases,

workers certified were facing the potential loss of their job and were not laid off. Thus, program

certifications are not an accurate count of job losses due to trade.
7 GAO-01-988T Trade Adjustment Assistance

machinery (8 percent); the remaining petitions were from a range of

manufacturing industries.

Trends in Benefit Utilization

The largest benefit delivered to trade-impacted displaced workers in 1995 to 2000

was in the form of income support, primarily to allow workers partial wage

replacement while taking training. The TAA and NAFTA-TAA programs paid a

total of $843.7 million during this period for basic income allowances. The two

programs also paid $314.5 million in additional income allowances. Training

courses cost $494.2 million, and job search and relocation allowances totaled

$10.3 million over the 6-year period. Most state officials we surveyed said job

search and relocation benefits have not been heavily utilized, because workers are

reluctant to move to new areas, primarily because of family commitments or ties

to the community. Figure 1 depicts the breakout of major TAA and NAFTA-TAA

services and benefits for fiscal year 2000.
8 GAO-01-988T Trade Adjustment Assistance

Figure 1: Trade Adjustment Assistance Benefit Utilization, Fiscal Year 2000

Totals may not add up to 100 percent due to rounding.

Source: GAO analysis of Department of Labor data. The Department of Labor still considers

data for fiscal year 2000 preliminary.

Trade-related Layoffs Hurt Case Study Communities

As part of our work on trade adjustment assistance, we identified about 300

communities that had 500 or more workers certified for TAA benefits between

fiscal years 1994 and 1999. Based on our case study examination of six of these

communities, we found that trade-related layoffs occurred in a variety of ways. In

some communities, a single large plant closing led to the layoff of more than 500

workers. For example, Tultex, an apparel manufacturer and one of the largest

employers in Martinsville, Virginia, declared bankruptcy in December 1999

without prior notice and immediately closed all operations. This left more than

2,000 workers without jobs and caused the city’s unemployment rate to rise from

about 9 percent to almost 20 percent that year. In other citiessuch as El Paso,

Basic

Income

Allowance

51%

Additional

Income

Allowance

19%

Training

30%

Job Search /

Relocation

0.62%
9 GAO-01-988T Trade Adjustment Assistance

for examplea series of layoffs occurred that have contributed to their relatively

high unemployment rates.

We also observed that many of the communities that we visited were concerned

about additional trade-related layoffs and plant closures. In Washington, North

Carolina, and Martinsville, Virginia, community leaders said that they expect their

textile and apparel industries to continue to decline because of increased foreign

competition. Martinsville leaders also fear that the furniture industry, another

large employer in their community, will begin to feel the impact of increased

furniture imports.

Delivery of TAA Services and Benefits Hampered by Program Structure

Length of Time for Income Support Limits Training Options

Program administrators, training providers, and workers in training consistently

said that the TAA and NAFTA-TAA programs needed to close the gap between

extended income support payments, which are provided for up to 18 months, and

training, which is provided for up to 24 months. Although there are mixed views

and little data on the outcomes associated with shorter and longer training

programs, the gap in income support is believed to create difficulties for workers

in 2-year training programs. This situation occurs because when income support

payments stop, dislocated workers generally drop out of training because they

cannot afford to remain in classes without financial assistance. This choice often

precludes them from pursuing a 2-year Associate of Arts degree program, which

could result in higher earnings or better skills, or any 2-year course of study

involving initial remedial courses.7

 

7

Department of Labor program data show that about 12 to 16 percent of those entering training

took remedial courses during fiscal years 1995-2000.
10 GAO-01-988T Trade Adjustment Assistance

Funding Problems Lead to Training Delays

Another problem with program structure cited by local program administrators

was the lack of a stable funding stream for training benefits. Although training is

a key part of a worker’s benefits, some states had difficulties providing consistent

funding for training due to administrative problems in the Department of Labor.

Generally, federal funding is provided to states quarterly and is based on prior

expenditures. Because TAA and NAFTA-TAA certifications fluctuate, in some

cases states may not have received sufficient funding to cover workers enrolled

during a quarter. In addition, state and local officials reported that insufficient

federal funds are available for the programs toward the end of the fiscal year

(Department of Labor officials said these problems primarily occur in the first and

last quarters of the fiscal year). High levels of certifications from unanticipated

layoffs and plant closures have resulted in statesTexas and North Carolina, for

examplewith large numbers of workers enrolled in training at the same time

that program officials were informed that no additional federal funds remained.8

As we noted in our recent report,9 although the Department of Labor has issued

formal guidance that states should not stop enrolling workers in program services

and benefits when funding is temporarily unavailable, agency officials report that

few states have done so. In some cases, when federal training funds are depleted,

states use Workforce Investment Act10 or other state monies.

 

8

When this happens, states may apply for funding, such as National Emergency Grants from the

Secretary of Labor, put workers on waiting lists, or suspend the training program.

9

Trade Adjustment Assistance: Trends, Outcomes, and Management Issues in Dislocated Worker

Programs.

10The Workforce Investment Act of 1998, title I, provides assistance to persons who have been laid

off due to plant closures or mass layoffs and/or meet the eligibility requirements outlined in the

act. There is no special category of causation, such as that for trade-impacted workers under TAA

and NAFTA-TAA.
11 GAO-01-988T Trade Adjustment Assistance

Difficulties Stemming From Maintaining Separate Trade Adjustment Assistance

Programs

Maintaining separate TAA and NAFTA-TAA programs results in a basic structural

problem that confuses participants and causes problems for program

administrators. Dislocated workers we interviewed in Texas and Michigan stated

that the explanations that program officials provided about the programs before

workers choose a program were inadequate and did not sufficiently clarify

workers’ questions. For example, while a worker can obtain a waiver from

training under TAA and still receive income support, waivers are unavailable

under NAFTA-TAA. Explaining this difference and others to dislocated workers

unfamiliar with federal programs can confuse workers particularly because

many workers are certified for benefits under both programs and must select one

under which to take benefits.

Officials in the 20 states we surveyed and in the states and localities we visited

believed that differing certification and training enrollment procedures of the two

programs hinders effective program administration. Under current law, TAA

petitions are received and processed by the Department of Labor, while NAFTATAA petitions are submitted to the state agency in which the affected plant is

located. Officials in every state administrative office and case study community

we visited consistently supported the consolidation of the TAA and NAFTA-TAA

programs. These officials believed that consolidation would simplify program

administration and be more efficient.

Other Program Requirements Hinder Delivery of Benefits and Services

Other program requirements can impede dislocated workers from successfully

completing training, according to state program administrators and program

participants. State officials were critical of the enrollment deadlines to qualify for

income support in the NAFTA-TAA program. To qualify for transition
12 GAO-01-988T Trade Adjustment Assistance

readjustment benefits under NAFTA-TAA, a worker must enroll in an approved

training program by (1) the last day of the 16th week of their most recent qualifying

separation or (2) the last day of the 6th week after publication of the certification

in the Federal Register, whichever is later. The TAA program does not have this

requirement. According to some state officials, the stringent NAFTA-TAA

requirement limits the training options for workers who only qualify for this

program. In some cases, appropriate training courses are not scheduled to begin

within the enrollment deadline, so workers choose to take less suitable courses to

retain eligibility for income support. The TAA and NAFTA-TAA programs also

prohibit dislocated workers from receiving income support if there is a break in

training exceeding 14 days. Program administrators we interviewed explained

that community colleges generally have semester breaks lasting longer than 14

days, which means that dislocated workers cannot receive any financial

assistance during that period.

Other factors complicating service and benefit delivery include certification

delays at the Department of Labor and federal paperwork requirements. As noted

in our recent report, Department of Labor delays in certifying TAA and NAFTATAA petitions or state program administrative office delays in approving workers’

training plans can limit workers’ options.11 Department of Labor officials said that

nearly all states have centralized approval of workers’ training plans because local

officials have less experience with TAA and NAFTA-TAA regulations.

 

11We found that in fiscal year 1999, 58 percent of NAFTA-TAA investigations exceeded the 40-day

statutory requirements and 34 percent of the TAA investigations exceeded the 60-day limit. See

Trade Adjustment Assistance: Trends, Outcomes, and Management Issues in Dislocated Worker

Programs.
13 GAO-01-988T Trade Adjustment Assistance

Trade Adjustment Assistance Cannot Solve Communities’ Longer-Term

Problems

Education Seen as Key to Successful Adjustment

One challenge consistently cited by government and civic leaders in the

communities we visited was the issue of human capital. They said that they

needed to improve local educational systems, which often had high school

dropout rates much higher than the national average. In several communities,

local leaders said that school facilities and curricula need to be improved to better

prepare students for high-skilled jobs and to develop a more attractive

environment for companies that they would like to recruit. In some communities,

local officials said that they were caught in a difficult situation in which local

residents who graduate from college leave for better jobs elsewhere. At the same

time, they were hampered in recruiting firms that needed a college-educated

workforce, in part because they had low numbers of such workers in their area.

Worker Profile Indicates Potential Training Challenges

The profile of dislocated workers that emerged from our case study discussions

with program administrators, training providers, and small groups of dislocated

workers is consistent with the Labor Department’s available national data on TAA

and NAFTA-TAA dislocated workers. The Department’s data on these programs

illustrates the human capital challenge facing trade-impacted communities (see

table 1). The table compares trade-dislocated workers nationwide to the total

U.S. workforce. While 42 percent of the nation’s total workforce has a high school

education or less, 80 percent of trade-dislocated workers fall into this category.

Among trade-dislocated workers, the average age was 43, and 59 percent were

over the age of 40. In addition, 64 percent of these workers were women. These

data suggest, and community leaders we interviewed in our case studies

confirmed, that trade-impacted workers tend to be less mobile and face

difficulties reentering a workforce that increasingly requires more skills and
14 GAO-01-988T Trade Adjustment Assistance

training. As a result of these factors, moving these workers further along on the

educational or job skill continuum is a challenge. Our discussions with training

providers and workers indicated that enormous sacrifices are necessary for

dislocated workersmany of whom have been out of school for 20 years or

moreto be successful in an educational system that has become more

challenging while maintaining family and other responsibilities. Given these

factors and the maximum 2 years of training available, earning an Associate of

Arts degree would represent a considerable achievement yet may still leave these

participants short of the skills required for many technology and service sector

jobs.
15 GAO-01-988T Trade Adjustment Assistance

Table 1: Profile of TAA and NAFTA-TAA Participants Compared to Total U.S.

Workforce, Fiscal Years 1999-2000

Worker characteristics Nationwide TAA and

NAFTA-TAA

participants

Total U.S. workforce

Gender

 Male

 Female

36%

64

53%

47

Average age 43 years NA

Limited English proficiency 12% NA

Average old wage $12.13 per hour

(at separation)

$13.36 per hour

(current wages for

production workers)

Average new wage $10.31 Not applicable

Median tenure 7 years (at separation) 3.5 years

Education

 Less than high school

 High school graduate

 Some post-high school

 College graduate

25%

55

17

4

10%

32

28a

30

Notes: TAA and NAFTA-TAA participant data based on data from 36,000 workers who left the TAA

and NAFTA-TAA program in fiscal years 1999-2000 and filled out a survey. Total U.S. workforce

data are from Bureau of Labor Statistics Employment Situation Report for May 2001, except for

average wage and average tenure data, which are Bureau data for February 2000.

NA=Not available

Totals may not add up to 100 percent due to rounding.

a

“Some post-high school” for total U.S. workforce includes some college, no degree, and associate

degrees.

Sources: GAO analysis of TAA and NAFTA-TAA participant data from Department of Labor and

data from Bureau of Labor Statistics.
16 GAO-01-988T Trade Adjustment Assistance

Differing Economic Adjustment Strategies May Be Needed to Facilitate

Adjustment to Trade Impacts

Communities recovering from adverse trade impacts are struggling with difficult

choices needed to rebuild their economic base and retool to better compete in the

national and global economies. The assistance available for communities’

economic adjustment efforts is limited, targeted, and generally short-term. Three

of the communities where we conducted our case studies are adopting strategies

that aim for economic diversification by preparing their workforce for the highskilled, well-paying jobs that they hope to attract. However, these communities

realize that they still need jobs suitable for low-skilled, displaced workers who

will not qualify for jobs in the new economy.

The communities we visited as part of our case studies had received some

assistance from federal and state governments to facilitate their economic

adjustment efforts. The federal government provided a total of $59.5 million in

economic adjustment assistance funding to these six communities from fiscal

year 1995 to the present, mostly in federal loan guarantees. Of this amount, the

largest amount was $42.3 million in loan guarantees to businesses provided by the

Community Adjustment and Investment Program, most of which were made in El

Paso, Texas ($38.7 million). The second largest source of funding was from the

Department of Commerce’s Economic Development Administration, which

provided $10.5 million in grant assistance to these six communities from fiscal

year 1995 to early fiscal year 2001. Community officials believe they are limited in

their ability to obtain such federal assistance, which is spread across many federal

agencies, because there is no central source of information on available programs

and because they often lack the financial resources to meet grant matching

requirements. Local officials also believe that the programs targeted at tradeimpacted areas are too limited to make a significant difference in their

communities’ adjustment efforts.
17 GAO-01-988T Trade Adjustment Assistance

Those involved in worker adjustment assistance programs in the communities

pointed to the need for training programs linked to the employment needs of local

businesses. One of the fundamental challenges facing trade-impacted

communities is helping dislocated workers—generally older workers with a high

school degree or less—adjust to an increasingly globalized economy that requires

different skills than those needed when these individuals first entered the

workforce. In fiscal year 1999, occupational training was the most common type

of training provided under the TAA and NAFTA-TAA programs. Computer and

information system skills and office and business administration were the most

popular training programs, with 14 states of 20 listing them in their top three

occupational course offerings to trade-impacted workers. Medical skills,

including nursing, were listed among the top three training courses by nine states;

and six states listed English as a second language or remedial education in the top

three training courses offered. However, these relatively short-term training

programs may not bridge the gap between these workers’ current skills and the

skills they need to enter a workforce more focused on technology and services.

Matters for Congressional Consideration

As a result of the work that we have performed for the Committee, we have

several matters that the Congress may wish to consider as part of its current

deliberations about consolidating or restructuring the trade adjustment assistance

programs. With regard to the TAA and NAFTA-TAA programs, the Congress may

wish to simplify the administration of the TAA and NAFTA-TAA programs by

standardizing (1) time frames for workers to enter training, (2) training waiver

policies for certified workers, and (3) time frames for completing certification

investigations. Congress may also wish to consider whether workers who

experience an unavoidable break in training of more than 14 days (such as

semester breaks) should continue to receive income benefits.12

 

12Our prior reports also contained recommendations to improve the effectiveness of the trade

adjustment assistance programs. See Trade Adjustment Assistance: Trends, Outcomes, and

Management Issues in Dislocated Worker Programs; Trade Adjustment Assistance: Opportunities
18 GAO-01-988T Trade Adjustment Assistance

 ---------- ----------- ------------

Mr. Chairman and Members of the Committee, this concludes my prepared

statement. I will be happy to answer any questions the Committee members may

have.

Contacts and Acknowledgments

For future contacts regarding this testimony, please call Loren Yager or Phillip

Herr at (202) 512-4128. Individuals making key contributions to this testimony

included Sigurd Nilsen and Leyla Kazaz.

 

to Improve the Community Adjustment and Investment Program; and Trade Adjustment

Assistance: Impact of Federal Assistance to Firms Is Unclear.
19 GAO-01-988T Trade Adjustment Assistance

Appendix

Trade Adjustment Assistance and North American Free Trade Agreement

Transitional Adjustment Assistance Payments and Service and Benefit

Recipients, Fiscal Years 1995-2000

Dollars in millions

1995 1996 1997 1998 1999 2000 Total

Total workers

certifieda

118,837 166,310 165,898 153,804 227,650 145,112 977,611

Basic

allowance

 Payments

 Recipients

$109.5

25,641

$127.8

32,856

$148.0

34,158

$119.2

26,241

$159.1

36,910

$180.1

32,368

$843.7

188,174

Additional

allowance

 Payments

 Recipients

$41.6

5,856

$43.6

7,132

$53.6

15,215

$50.2

7,736

$50.7

8,166

$74.8

10,010

$314.5

54,115

Training

 Costs

 Recipients

$60.9

28,645

$68.5

32,971

$83.4

26,865

$79.9

25,235

$97.3

32,120

$104.2

24,106

$494.2

169,942

Job search

 Costs

 Recipients

$0.3

927

$0.3

752

$0.2

520

$0.1

289

$0.1

314

$0.1

359

$1.1

3,161

Job relocation

 Costs

 Recipients

$2.8

1,678

$1.8

940

$1.7

875

$0.8

473

$1.0

771

$1.1

731

$9.2

5,468

Total service

and benefit

payments $215.1 $242.0 $286.9 $250.2 $308.2 $360.3b $1,662.7

Note: Readjustment allowance and training recipients may appear in quarterly reports spanning

more than one fiscal year. Likewise, workers could have received more than one type of benefit in

a fiscal year. “Recipients” means the number of people receiving a first trade readjustment

allowance payment and the number of people who entered training.

a These figures include workers certified under both programs.

b Data for 2000 are preliminary.

Source: GAO analysis of Department of Labor data collected quarterly from the states.

(320074)
20 GAO-01-988T Trade Adjustment Assistance

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To Report Fraud, Waste, and Abuse

in Federal Programs

Website: http://www.gao.gov/fraudnet/fraudnet.htm

Email: fraudnet@gao.gov

Automated answering system: 1-800-424-5454