Trade Adjustment Assistance: Most Workers in Five Layoffs Received Services, but Better Outreach Needed on New Benefits
Released: 2006-02-15T00:00:00

Letter

Background

Dislocated workers who have lost their jobs as a result of international trade are largely provided services through three federally funded employment and training programs—the TAA program, the WIA Dislocated Worker program, and the Wagner-Peyser ES program. These services are provided through a consolidated service delivery structure called the one-stop system. In order to encourage the streamlined delivery of employment services, WIA was enacted in 1998 and required that the TAA, WIA, ES, and other federally funded programs provide employment and training services through the one-stop center system made up of nearly 2,000 individual one-stop centers operating in about 600 local workforce areas across the nation. These program services may be provided directly at a one-stop center, or at other locations through referrals.

Trade Adjustment Assistance Program

The TAA program was designed to assist workers who have lost their jobs as a result of international trade. In order for workers to be eligible for TAA benefits, Labor must certify that their layoff was trade affected. This certification process begins when a petition on behalf of a group of laid-off workers is filed with Labor. Petitions may be filed by a group of at least three affected workers, the employer experiencing the layoff, a union, or a state or local workforce agency. Labor has 40 days to investigate whether workers were laid off as a result of international trade, for example because of a shift in production to another country or an increase in imports of articles like or similar to what the workers were involved in producing. If Labor certifies the petition, it notifies the state in which the layoff occurred, which then has responsibility for contacting the workers eligible for TAA program benefits under the petition. States must inform workers individually about the benefits available to them as well as how to apply for benefits.

The TAA program provides two primary benefits—training and extended income support. States have responsibility for approving training and determining eligibility for extended income support, while local one-stop centers are the main point of intake and actual delivery of TAA services and benefits. Training benefits include vocational training, on-the-job training, and remedial training (e.g., English as a second language or literacy). Participants in TAA-approved training must attend training full- time. Program participants may also receive a total of 104 weeks of extended income support beyond the 26 weeks of UI benefits available in most states. This includes 78 weeks of extended income support while workers are completing vocational training, and another 26 weeks if workers are completing remedial training. During their first 26 weeks of extended income support, participants must either be enrolled in training, have completed training, or have a waiver from this requirement. To qualify for extended income support, participants must be enrolled in training by the later of two dates: either 16 weeks after being laid off or 8 weeks after Labor certified their petition. The maximum level of extended income support payments in a state is set by statute at the state’s maximum UI benefit level.

The Trade Adjustment Assistance (TAA) Reform Act of 2002 added several new benefits to the TAA program, including the Health Coverage Tax Credit (HCTC). Workers must be enrolled in training or have a waiver from this requirement to be eligible for the HCTC benefit that helps workers pay for health care insurance through a tax credit covering 65 percent of their premiums for qualified plans. Workers can choose to receive the tax credit in one of two ways—as an advanced option that covers 65 percent of their monthly premiums allowing them to lower the amount they have to pay out of pocket for health coverage, or as an end of year tax credit that is claimed on their income taxes. The tax credit is administered at the federal level by the Internal Revenue Service (IRS) and three federal departments—Treasury, Labor and Health and Human Services—share responsibility for implementing HCTC. There are three health plan options that are automatically HCTC-eligible: COBRA continuation plans. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985, certain employers with 20 or more employees are required to offer 18 to 36 months of continued health care coverage to former employees and their dependents who lose health coverage due to certain circumstances, such as when a worker is laid off. Generally, health care insurers may charge individuals purchasing COBRA continuation coverage no more than 102 percent of the total premium.

Spousal coverage. Health care insurance obtained through a worker’s spouse’s employer is also HCTC-eligible, provided that the employer contributed less than 50 percent toward the cost of coverage.

Individual market plans. Workers may use HCTC to cover a portion of the monthly cost of individually purchased health insurance coverage if the worker purchased the coverage at least 30 days prior to being laid off.

In addition to the three options that are automatically qualified for HCTC, the TAA Reform Act allows states to designate other coverage alternatives—called state-qualified options—for HCTC recipients. For example, states may make arrangements with individual health insurers, among others, to provide HCTC-eligible coverage to TAA participants.

The Reform Act also established as a demonstration project a wage insurance benefit for older workers—known as the Alternative Trade Adjustment Assistance (ATAA) program. This program supplements the incomes of workers 50 years of age or older who forgo TAA-funded training and are able to find jobs within 26 weeks of being laid off that pay less than $50,000 a year and pay less than what they previously earned. If workers meet these criteria they are eligible to receive 50 percent of the difference between their new and old wages up to a maximum of $10,000 over 2 years. Older trade-affected workers are only eligible for the wage insurance program if the petition for TAA assistance that was filed with Labor included a specific request for ATAA eligibility.

About $750 million was appropriated for income support for trade-affected workers for fiscal year 2005, while another $259 million was appropriated for training. Labor allocates 75 percent of these training funds to states according to a formula that takes into account each state’s previous year allocations, accrued expenditures and participant levels. Labor holds the remaining 25 percent of training funds in reserve, to distribute to states throughout the year according to need. To cover administrative costs associated with the TAA program, Labor allocates to each state an additional 15 percent of its program allocation (see table 1). For example, Pennsylvania was allocated $20.6 million in fiscal year 2004 to provide trade-affected workers with training and other services, and an additional $3.1 million was allocated to cover costs associated with administering the TAA program. Labor sets and tracks national TAA performance goals for job placement, job retention and wage replacement outcomes, but there are no individual state performance goals.

WIA Dislocated Worker Program

The WIA Dislocated Worker program is available to dislocated workers in general and is not reserved for those affected by international trade. A dislocated worker is an individual who (1) has been terminated or laid off, or who has received a notice of termination or layoff, from employment; is eligible for, or has exhausted entitlement to, UI or is not eligible but has been employed for a sufficient duration to demonstrate attachment to the workforce; and is unlikely to return to his previous industry or occupation; (2) has been terminated or laid off, or has received a notice of termination or layoff, from employment as a result of any permanent plant closure of, or substantial layoff at a plant, facility, or enterprise; (3) was self employed but is unemployed as a result of general economic conditions in the community in which the individual resides or because of natural disasters; or (4) is a displaced homemaker.

Labor distributes 80 percent of the WIA Dislocated Worker funds ($1.5 billion in fiscal year 2005) directly to states, the District of Columbia, and Puerto Rico based on a formula. States then distribute 60 percent of these funds to local areas by formula to support WIA services for dislocated workers. Each state can reserve no more than 25 percent of its dislocated worker funds to provide rapid response services to help dislocated workers transition quickly to reemployment, and up to 15 percent for other statewide activities. Labor retains 20 percent of dislocated worker funds ($283 million in fiscal year 2005) in a national reserve account to be used to provide states with national emergency grants, demonstrations, and technical assistance.

Under the WIA Dislocated Worker program there are three sequential levels of service available through the one-stop center system—core, intensive, and training. The initial core services—including job search and placement assistance, the provision of labor market information, and preliminary assessment of skills and needs—are available to everyone. If a dislocated worker is determined to be unable to find a job or has a job that does not lead to self-sufficiency after core services, intensive services may be made available, which include comprehensive assessments, development of an individual employment plan, and case management. Dislocated workers who are determined to be unable to obtain or retain employment after intensive services can move on to training. At this level, dislocated workers can receive services including occupational skills training and on-the-job training.

The 1988 Worker Adjustment and Retraining Notification (WARN) Act generally requires employers with 100 or more workers to give notice— often called a WARN notice—to the affected workers’ representatives (e.g., a labor union) or the workers themselves if they have no representatives, as well as to the state dislocated worker unit 60 days in advance of expected plant closings or mass layoffs. Once an employer files a WARN notice with the state’s dislocated worker unit, a rapid response team is mobilized to provide immediate and on-site contact with the employer experiencing layoffs as well as with employee representatives to assess the needs of affected workers. Generally workers are invited to attend a rapid response meeting where they are provided with information about UI and other federally funded employment and training services also available through the one-stop center system. Typically, if they have reserved adequate funds to provide rapid response services, states may also use rapid response funds for services including providing additional assistance to local areas that are experiencing increased unemployment, and to pay for direct services such as training. States can also apply to Labor for national emergency grant funds to provide additional employment and training services to workers affected by mass layoffs and plant closings, or to provide temporary assistance to workers affected by natural disasters and other catastrophic events.

Labor monitors program performance by requiring states and localities to track job seekers who receive core services that require significant staff assistance, intensive services, and training. States and local areas are required to monitor the outcomes of WIA Dislocated Worker program participants on measures including job placement, job retention, and earnings change. State performance targets are established annually through negotiations between individual states and Labor. States, in turn, negotiate WIA performance levels with each local area. Labor holds states accountable for achieving their WIA performance levels by tying those levels to financial sanctions and incentive funding.

Employment Service

The ES was created in 1933 by the Wagner-Peyser Act and was designed to link job seekers with employers. ES is a partner in the one-stop center system and offers a range of services that are available to all job seekers and employers. About $800 million in ES funds was provided to states for fiscal year 2005. For job seekers, ES provides services such as job search assistance, job referral, and assessments, as well as one-on-one case management. ES also offers employer services including recruiting workers, screening applicants and helping employers manage layoffs. Labor tracks program performance by measuring outcomes of job seekers who received ES services against national goals related to job placement and job retention.

Most Workers at Five Sites Received Some Reemployment Assistance, but Generally Less Than a Third Entered Training

At all five sites, the majority of affected workers visited a one-stop center and received some services, but at four of five sites only about a third or less received training and long-term income support. At least two-thirds of the workers in each site (ranging from 72 to 100 percent) went to a one- stop center, and they most commonly received one-on-one assistance such as job search assistance, according to our survey estimates. In four of the five sites we studied, workers who did not go to a one-stop center most commonly reported that they needed to find a job right away and did not think they had time to visit a one-stop center, or did not need help finding a job. Generally, one-third or less of the workers in each site (ranging from 9 to 39 percent) enrolled in training. Similarly, about one-third or less of the workers in each site received long-term income support benefits—for 1 year or longer—which are available to trade-affected workers in training who have exhausted their UI benefits. Older workers were less likely to enter training, according to our survey data.

Most Workers at Each Site Visited a One-Stop Center and Received One-on-One Assistance

Over 70 percent of workers at each site visited a one-stop center, according to our survey (see fig. 2). While all TAA-eligible Toro workers visited a one-stop center since being laid off, over 80 percent of Toro workers who were not eligible for TAA also visited a one-stop center. Workers with lower pre-layoff wages were significantly more likely to visit a one-stop center than workers with higher pre-layoff wages, and women were twice as likely as men to visit a one-stop center, even after accounting for other factors such as time since being laid off. General Mills workers were also significantly less likely than workers in the other sites to visit a one-stop center, which may have been linked to the fact that the General Mills plant closure was TAA-certified several months after the layoffs there began. According to union officials, many of the workers had already been laid off by the time the petition was certified and, because of this, Missouri state officials noted they had difficulty reaching these workers to inform them about available benefits and services.

Workers most commonly received one-on-one assistance such as job search assistance (see fig. 3). Over half of the workers in each site reported on our survey that they received one-on-one assistance at a one- stop center, for example with how to look for a job or how to enroll in training. Workers were somewhat less likely to receive assessments, attend workshops, or use self-serve one-stop center services on their own. For example, at one-stop centers at each site we visited, workers were able to use computers to conduct on-line job searches or to up-date their resumes. However, some workers at these sites told us that they did not use these one-stop center resources, because they could use their home computers to access on-line job banks or to work on their resumes. Additionally, most workers who visited a one-stop center in four of the five sites we studied reported that one-on-one assistance was more helpful than services such as workshops and assessments.

To address the needs of some of these trade-affected workers, local one- stop staff at one site designed a new service delivery process. Staff at the Lewistown, Pa., one-stop center developed three service tracks as a way to streamline the assistance they provided to workers affected by the Lear plant closure (see fig. 4). Workers were placed into one of three service tracks depending on their interests and goals. Workers interested in getting a job right away were placed in the job seeking track that included a series of workshops on interviewing and resume writing, while workers interested in retraining were placed in the training/education track that included several assessment tests to measure their basic skills and to identify their career interests. A third service track was designed for workers undecided about retraining or getting a job and included a combination of workshops and assessments aimed at helping workers determine if their job skills are in-demand and if their skill sets need upgrading through training.

States used a variety of federal funds to provide reemployment services to trade-affected workers. In all five sites we visited, state or local officials told us that TAA administrative funds were insufficient to provide TAA participants with case management services, and they relied on other funding sources, particularly ES or WIA, to fund these services. Only two states—Missouri and Washington—used a portion of their TAA administrative funds to fund one-on-one case management for TAA participants at sites we studied. The proportion of TAA participants who received services funded through WIA among the sites we studied ranged from 8 percent of Toro workers in Mississippi to 37 percent of General Mills workers in Missouri, according to administrative data.

Local areas experienced some difficulties in using local WIA resources to serve trade-affected workers, according to officials in the sites we visited, and in response three states used alternative funding sources to provide these services. At some sites existing case management resources were not sufficient to meet the needs of trade-affected workers as well as other workers using one-stop center services. For example, one-stop officials in Massachusetts told us that they are reluctant to dedicate WIA case management resources to assist TAA participants, because WIA case managers are already busy working with WIA program participants. In addition, concerns about WIA performance measures, especially those related to reemployment and wage replacement, may serve as a disincentive for local areas to co-enroll TAA participants. According to state and local officials in two states, TAA participants tend to have higher earnings in their previous jobs than the average local job-seeker and are less likely to find jobs that pay at or near what they previously earned, which can count against their WIA performance measures. In response to these concerns, three of the states we visited also used national emergency grants—discretionary funds that Labor awards to states experiencing large layoffs—or statewide rapid response funds to serve trade-affected workers. Massachusetts, for example, initially used a portion of its rapid response set aside funds to serve Sanmina-SCI workers, and later used $540,000 in national emergency grant funds. These funds were used to support additional case managers to provide Sanmina- SCI workers with one-on-one assistance. Similarly, Missouri received about $1.4 million in national emergency grant funds to hire additional staff including case managers and to provide training for dislocated workers affected by several lay-offs that occurred in the St. Louis area, including the General Mills plant closure.

To address concerns that co-enrolling TAA participants in WIA may negatively affect performance measures, Labor recently piloted an initiative to encourage states to co-enroll participants in the WIA Dislocated Worker program. The seven states participating in this initiative are required to co-enroll all new TAA participants in the WIA Dislocated Worker program from October 2005 to the end of June 2006. States may exclude these TAA participants’ employment and wage replacement outcomes from their WIA performance calculations when the outcomes adversely affect their statewide performance. Labor currently intends to track co-enrolled participants’ outcomes across these seven states for program years 2006 through 2008.

Workers Most Often Visited One-Stop Centers for Job Search Assistance and to Learn More about Available Services and Benefits

Workers most often visited one-stop centers for two reasons—to learn more about available services and benefits and to get job search assistance. At least 80 percent of workers who visited a one-stop center at each site we studied told us that the prospect of learning more about benefits and services and getting assistance with finding a new job motivated them to initially visit a one-stop center. According to state or one-stop center officials in four of the five sites we studied, many workers do not have a specific course of action in mind when they first visit a one- stop center and are interested in getting more information about available services and benefits. Some workers, however, are primarily interested in finding a new job and visit one-stop centers for that purpose. Workers also reported that they visited one-stop centers for other reasons including that they heard from friends and co-workers that the one-stop center offered helpful services, they were interested in enrolling in training for a new occupation, or to maintain their UI benefits. Most workers at each site learned about reemployment services available at the one-stop center from a meeting held at or around the time of their layoff that provided them with information about reemployment services, often called a rapid response meeting. While over 70 percent of the workers at each site attended rapid response meetings, more workers at the Toro plant in Mississippi and the Sanmina-SCI plant in Massachusetts—where rapid response meetings were held on company time—attended these meetings than workers at the other sites.

At four of the five sites, between 12 and 28 percent of the workers did not visit a one-stop center. Across these sites, between 47 and 71 percent of workers who did not go to a one-stop center said they did not need help finding a job. Workers also often told us that they did not go to the one- stop center because they needed to find a job right away and did not think they had time to visit a one-stop center. Workers less commonly reported that they did not visit a one-stop center because they were unaware that job search and training services were available at one-stop centers, that the one-stop center was located too far away from where they lived, or that it was difficult to get to the one-stop center.

Over 60 percent of workers at each site who visited a one-stop center did so in the first two months after being laid off (see fig. 5). Some workers— less than 10 percent of workers at each site—went to a one-stop center even before they lost their jobs. Workers in four of the five sites we visited told us that they were aware of the TAA program’s training enrollment deadline and enrolled in training quickly. Some workers, however, told us they initially felt that they could find employment without the help of the one-stop center, and only used one-stop center services when they were unable to find a job or a job that paid close to their former wage.

About One-Third or Less of Workers Generally Received Training and Long-Term Income Support

At most sites, relatively few workers had enrolled in training since being laid off. In four sites, less than one-third of workers were currently or had been enrolled in training at the time of our survey. At the remaining site, Sanmina-SCI in Massachusetts, 39 percent of the workers had enrolled in training (see fig. 6). Even after accounting for other factors that could affect training enrollment, such as workers’ age and gender, Sanmina-SCI workers were significantly more likely to enter training than workers at all the other sites. Among the Toro workers in Mississippi who were not TAA-certified, 6 percent enrolled in training, compared to the 18 percent of TAA-certified Toro workers who took training.

Of the workers at the sites we studied who entered training programs, most entered programs that were relatively short-term and that cost less than $10,000. At four sites, half or more of the workers who enrolled in training were enrolled in programs expected to last 1 year or less, according to administrative data (see fig. 7). At three of these sites, about 30 percent or more of the workers in training entered programs expected to last 6 months or less. In the sites we studied, shorter-term training included, for example, a 2-month certification program in truck driving or a 1-month nursing assistant program. Longer-term training included 2-year associates degree programs at community colleges in fields such as elementary education or heating, ventilation, and air conditioning maintenance and repair. At each site, at least 60 percent of the workers who enrolled in training entered programs with an expected cost of less than $10,000. (For a detailed breakdown of training costs, see app. II.)

While about half the workers at three of five sites received income support for over 6 months, one-third or fewer at each site received benefits for over 1 year—generally only available to trade-affected workers in training who have already exhausted their UI benefits. At least two-thirds of the workers at each site had received income support benefits at the time of our survey, and at three sites about half the workers had received these benefits for over 6 months (see fig. 8). However, only about a third or less of the workers at each site had received the benefits for over 1 year, and no more than 8 percent of the workers at any site had received benefits for longer than 18 months. Because most workers in the sites we studied did not enroll in training, and those who did most commonly entered programs lasting 1 year or less, the vast majority of the workers in these sites did not utilize the full 2 years of extended income support benefits available to them.

The majority of workers at each site who enrolled in training received vocational training. A few industry categories were consistently popular across sites (see table 2, which provides information on training funded by TAA and WIA). Training in health care occupations was among the more popular choices at most sites, including training for jobs in direct care (e.g., nursing assistant) and in administration (e.g., medical coding and billing). Training in office and computer skills, ranging from basic computer skills to more advanced network support and accounting skills, was also among the most popular in most sites. Construction and trades, including occupations such as electrician and plumber, were among the popular fields in two sites—General Mills and Lear; and transportation, including truck driving, was the leading field at Lear. Fewer workers at each site entered remedial training, which includes courses in literacy, English as a second language, and General Equivalency Diploma (GED) preparation. The proportion of workers entering remedial training funded by any source was highest at Sanmina-SCI in Massachusetts, where according to administrative data 50 percent of the workers who entered training took remedial training. One-stop center officials in Massachusetts told us a number of training providers in the area offered programs that combined GED preparation or English as a second language instruction with training in vocational skills.

Most workers in sites in large metropolitan areas who entered training attended proprietary schools, while workers in the other sites most commonly attended public institutions such as community colleges and vocational/technical schools. Seventy-five percent of the General Mills workers and 71 percent of the Sanmina-SCI workers who entered training attended proprietary schools. All of the Toro workers in Mississippi who entered training attended a community college, as well as 63 percent of the Weyerhaeuser workers in Washington who entered training and for whom data are available. Public vocational/technical schools that serve high school students as well as adults were the leading providers for Lear workers in Pennsylvania, serving 48 percent of Lear workers who entered training. (For a detailed breakdown of the training providers used by workers at each site, see app. II.)

Age, Gender among Factors Affecting Training Enrollment

A variety of factors were associated with workers’ decisions about whether to enroll in training and what type of training to enter, according to our survey analysis and according to officials and workers we spoke with. Some of these factors were related to attributes of the individual workers, such as their age or gender, while others affected all workers at a particular site, such as the availability of training programs in the local area.

Workers’ Characteristics

Older workers were less likely than younger workers to enter training. Workers over age 55 at our five sites were significantly less likely than younger workers to enter training, even after taking into account other characteristics such as workers’ gender and educational level, our survey data indicate. Workers or one-stop center staff in four of the sites we studied said age was a factor in workers’ training decisions. For example, one-stop center staff in Mississippi told us that older workers often lacked the confidence to go back to school after many years away from the classroom. The Weyerhaeuser plant closure in Washington affected a higher proportion of workers age 55 and older (57 percent) than any of the other closures, and according to our survey only 5 percent of these older Weyerhaeuser workers entered training, compared to 14 percent of Weyerhaeuser workers under age 55. One-stop center staff in Washington said a large number of the older workers affected by the closure received waivers from the training requirement under the TAA program because they were nearing retirement; 56 percent of Weyerhaeuser workers age 55 and older retired, according to our survey.

Workers’ gender affected the type of training program they entered and sometimes whether they enrolled in training, according to officials in three sites. One-stop center staff or training providers in multiple sites said men are more likely to enter training in truck driving, while women are more likely to enter training in nursing or other medical fields. And officials in Missouri told us that in the St. Louis area, a shortage of training programs in traditionally male occupations—such as construction and auto body work—discourages some men from even seeking training. They said it was expensive to operate training programs in some of these fields, and potential providers are especially reluctant to invest in expensive technology just for training purposes when the technology changes rapidly.

Workers’ skills at the time of their layoffs were a factor that sometimes pushed workers into particular types of training and sometimes acted as a barrier to training enrollment, according to workers, officials, or training providers in the sites we studied. In particular, lack of basic skills was often cited as a factor affecting training enrollment. For example, the Sanmina-SCI site in Massachusetts had the highest proportion of workers without a high school degree or GED (14 percent) among the sites we studied, and it had the highest proportion of workers enrolled in remedial training. One-stop center staff in Massachusetts said many of the workers affected by the Sanmina-SCI plant closure lacked basic skills and needed GED preparation or English as a second language instruction. In Washington, a college official said inadequate math and science skills constrained training options for some dislocated workers. These workers chose to enter programs to become licensed practical nurses or certified nursing assistants because they lacked the basic skills necessary to enroll in training to become registered nurses. A one-stop center official in Pennsylvania told us that workers need a minimum level of basic reading, language and math skills to qualify for vocational training, and that lack of basic skills may have prevented many Lear workers from entering vocational training.

Timing and Availability of Training Programs

The timing of training start dates affects which programs workers enter, according to officials or workers in four sites. One-stop center or state officials in these sites told us that community college training programs typically have only a few starting dates—or only one starting date—per year, and that the timing of program start dates is not always convenient for laid-off workers. For example, officials in Missouri and Washington explained that workers must sometimes wait a number of weeks until the start of the next community college semester, because of a lag between the worker’s layoff and the start of the next semester. In these cases, workers might choose to attend a proprietary school with an open- enrollment policy rather than a community college, to avoid using up several weeks of income support benefits while waiting to start training, or they might opt for a shorter-term training program to avoid running out of income support before completing training.

Officials in two sites that are not in large metropolitan areas said a lack of training programs in the local area limited workers’ training options. One- stop center officials in Pennsylvania said a shortage of affordable training programs in the Lewistown area, in particular the lack of a community college, has been a barrier to training enrollment for Lear workers. One Lear worker told us he was interested in a particular training program at a community college, but he could not enroll in the program in part because it would have been about a 50-mile commute each way. Similarly, an official in Washington told us that there are limited training programs in the Kelso/Longview area, and some workers relocated in order to enroll in a program that is not offered in the Kelso/Longview area.

State Training Policies

States’ maximum allowable TAA training cost per worker sometimes affected workers’ training decisions. Four of the states we visited—all except Mississippi—have established a maximum limit or cap on TAA training costs per worker (see table 3). Two of these states set different caps for different types of training programs, such as a lower cap for remedial training and a higher cap for vocational training. The maximum caps range from $12,000 in Washington to $23,000 in Massachusetts. Workers or state officials in three sites told us these caps sometimes affected workers’ training decisions. For example, a General Mills worker in Missouri told us that she initially wanted to enroll in a medical billing certification program that offered instructor-led training and an internship, but this program’s cost was higher than the state cap. She ultimately enrolled in a less expensive, computer-based medical billing program.

Most Workers at Four of the Five Sites Found a Job or Retired after Being Laid Off, and Employment Outcomes Varied by Services Received

We found that most of the workers who lost their jobs because of foreign trade at four of the five sites we studied had either found a job or retired at the time of our survey. The majority of reemployed workers earned less in their new jobs than they had previously earned, but according to our survey estimates generally replaced about 80 percent or more of their pre- layoff wages. Also, more than half of reemployed workers returned to the manufacturing sector, and at most sites workers who returned to manufacturing replaced about the same proportion of their pre-layoff wages as workers who entered other fields. Workers who entered training replaced slightly less of their wages than workers who did not in all but one site, and those who were trained generally left manufacturing for another industry. The outcomes for workers in our study are generally similar to those found in an earlier study of laid-off workers in industries significantly impacted by trade. Outcome measures allow an assessment of whether a participant is achieving an intended outcome, but they cannot measure whether the outcome is a direct result of program participation. Labor has funded a long-term study of the effectiveness of the TAA program, scheduled to be completed by 2008.

Most Workers at Four of Five Sites Were Reemployed or Retired after Being Laid Off

The majority of workers at four of the five sites had either found a job or decided to retire at the time of our survey. At three of the sites, 60 percent or more of the workers had found jobs (see fig. 9). In the fourth site, Weyerhaeuser in Washington, less than half of the workers were reemployed, but almost 60 percent of the Weyerhaeuser workers were age 55 or older and over half of these older workers retired. A number of the reemployed Weyerhaeuser workers were simply rehired by Weyerhaeuser: almost one-fourth of the workers affected by this plant closure were able to find a new position at another part of the company. In the fifth site, Sanmina-SCI in Massachusetts, only 37 percent of the workers had found new jobs, but this layoff occurred more recently than any of the other layoffs—only 8 months prior to the survey. In addition, Sanmina-SCI had the highest proportion of workers who entered training, and most of these workers were expected to still be in training at the time of our survey. Of the Toro workers in Mississippi who were not TAA certified, 59 percent were reemployed, about the same as the percentage of TAA-certified workers at that site who had found new jobs. These findings are similar to those of an earlier study of U.S. workers laid off from industries significantly affected by trade where 63 percent of the workers had found reemployment after their layoffs.

The workers who had entered training were the least likely to be reemployed at each site, but it may be too soon to know the effect of training on employment outcomes. Generally one-third or less of workers at each site enrolled in training, and among this group, no more than half at any site were reemployed. However, some of the workers who had enrolled in training were expected to still be in training at the time of our survey, according to administrative data. In two of the five sites, about 60 percent or more of the workers who had entered training were expected to still be in training, and in the other three sites about a third were expected to still be in training. Among those scheduled to complete training by the time of our survey, over 60 percent were reemployed at all sites but one—similar to the overall reemployment rate for most sites. At the fifth site, Sanmina-SCI in Massachusetts, only 35 percent of workers who were scheduled to complete training were reemployed.

Workers who did not go to a one-stop center were at least as likely to be reemployed as those who visited a one-stop (but did not get training). In only two sites—Weyerhaeuser and Sanmina-SCI—were workers who did not visit a one-stop center more likely to be reemployed than those who did. For example, at Weyerhaeuser, 50 percent of those who did not visit a one-stop center were reemployed compared with 39 percent of those who did visit a one-stop center but did not get training.

About half or more of the workers at four of the five sites took at least 7 months to find their current job (see fig. 10). At the fifth site, Sanmina- SCI, about one-fifth of the reemployed Sanmina-SCI workers took at least 7 months to find their current jobs, but the Sanmina-SCI plant closure occurred only 8 months before our survey. A smaller number of workers found their current jobs more quickly—in four sites, about one in five of the reemployed workers found their current jobs within 3 months. By comparison, an earlier study of workers laid off from industries affected by trade found that a larger proportion of workers were reemployed more quickly—half of the workers found new jobs within 2 months of being laid off, while 25 percent took over 6 months. Workers in the five sites in our study who did not go to a one-stop center generally were reemployed a bit more quickly than those who did. Of the reemployed workers who did not go to a one-stop center, half or more found their current jobs within 3 months of being laid off. Of those reemployed workers who went to a one- stop center (but did not get training), between 14 and 45 percent found their current jobs within 3 months. This difference may be due to time dedicated to receiving job search assistance and other services to help them get a job.

The Majority of Workers in Most Sites Earned Less in Their New Jobs, Replacing about 80 Percent or More of Their Pre-Layoff Wages

The majority of reemployed workers in four sites earned less in their new jobs than prior to being laid off, but at the fifth site—Weyerhaeuser in Washington—slightly more than half the reemployed workers earned the same or more than their prior wage. Reemployed workers at all five sites were able to replace, on average, between 79 and 94 percent of their pre- layoff wages (see fig. 11). Similarly, an earlier study of workers laid off from industries significantly affected by international trade found that when these workers were reemployed, they replaced, on average, about 87 percent of their prior wages. Workers and officials told us that several of the plants that we studied paid higher wages than other companies in the area. Unless workers moved out of the area, they could not easily earn comparable wages doing the same type of work. However, some reemployed workers at each site—with the proportion ranging from 12 percent of reemployed Toro workers in Mississippi to 53 percent of reemployed Weyerhaeuser workers in Washington—were able to earn at least as much as they had prior to their layoffs.

Workers in four of the five sites who did not go to a one-stop center had a higher average pre-layoff wage than those who did. For example, Weyerhaeuser workers who did not go to a one-stop center had an average pre-layoff wage of about $30 an hour, while those who visited a one-stop center (but did not get training) had an average pre-layoff wage of about $27 an hour. When reemployed, workers who did not visit a one-stop center generally replaced at least the same proportion of their pre-layoff wages as those who did. With the exception of Lear, those who received training had the lowest average pre-layoff wages. And at two of five sites, these workers had the lowest average wage replacement rate when reemployed (see table 4).

The majority of the workers who had found new jobs at the time of our survey said they were receiving some benefits such as health insurance benefits or paid time off through their new employer (see fig. 12). Over 60 percent of the reemployed workers at each site received health insurance benefits in their new jobs. In addition, about 75 percent or more of the reemployed workers at each site received vacation time, sick leave, or personal leave at their new place of employment. However, some workers told us the benefits in their new jobs were less generous than the benefits received from their former employer. Generally, fewer reemployed workers received retirement benefits in their new jobs as compared to health insurance benefits and paid time off.

More than half of the reemployed workers at each site returned to jobs in the manufacturing sector (see fig. 13). This was true for workers who visited a one-stop center (but did not get training) as well as for those who did not visit a center. Similarly, an earlier study of workers laid off from manufacturing industries that were significantly affected by international trade found that when these workers were reemployed, 52 percent of them returned to the manufacturing sector. When reemployed workers did not return to manufacturing, we found they entered fields such as professional and business services; trade, transportation, and utilities; construction; and education, health care, and social services. A higher proportion of workers who took training entered a new field. In three sites, the majority of workers who enrolled in training and found new jobs entered a field other than manufacturing.

Reemployed workers who returned to manufacturing generally replaced about the same proportion of their pre-layoff wages as those who entered other fields. For example, at General Mills, workers who returned to manufacturing had an average wage replacement rate of 90 percent, while those who moved to other fields had an average replacement rate of 88 percent. However, at two of the sites—Weyerhaeuser and Sanmina-SCI— those who stayed in manufacturing replaced a higher proportion of their pre-layoff wages than those who did not. At Weyerhaeuser, where workers’ average pre-layoff wages were about $27 per hour, reemployed workers who remained in manufacturing replaced 93 percent of their prior wages, while those who entered new fields replaced 65 percent of their prior wages. At Sanmina-SCI, where workers’ average pre-layoff wages were lower—about $18 per hour—reemployed workers who remained in manufacturing replaced 96 percent of their prior wages, compared to 89 percent for those who entered new fields.

Outcomes Alone Cannot Measure Program Impact

While outcome measures are an important component of program management in that they assess whether a participant is achieving an intended outcome—such as obtaining employment—they cannot, by themselves, measure whether the outcome is a direct result of program participation. Other influences, such as the condition of the local economy or an individual’s readiness to search for work or learn new skills, may affect his or her ability to find a job as much or more than participation in an employment and training program. We examined the outcomes for all workers affected by the selected plant closures. However, we could not determine whether their outcomes were a direct result of the services they received. To determine whether participant outcomes are a result of services, rather than of other factors, it is necessary to conduct an impact evaluation that can take these and other factors into account when comparing workers’ outcomes.

Labor has funded a long-term study to assess the impact of TAA program services such as training on participants’ employment and earnings. The goal of the study is to determine not only the outcomes achieved by TAA participants, but also the impact of TAA program services—that is, whether participants had better outcomes as a result of the program than they would have if they had not received program services. Labor last completed an evaluation of the TAA program in 1993, but methodological issues resulted in inconclusive findings from that study. According to Labor officials, the methodology used by the new study is an improvement over the methodology used by the 1993 study, and should provide more conclusive findings. The new study will compare the outcomes for a treatment group (TAA participants in 25 states) and a comparison group (UI claimants in the 25 states who are similar to the TAA participants in a number of observable characteristics). It will examine, for example, the workers’ job search methods, their training outcomes, and their employment history before and after being laid off. This methodology will likely allow an assessment of the impact of the TAA program, rather than just outcomes. Data collection began in 2005 and will continue until 2008, and a final report is scheduled to be issued by the end of 2008.

A Small Proportion of Workers in the Five Sites Received Health Insurance or Wage Insurance Benefits, but Many Workers Were Unaware of These Benefits

A small proportion of workers in the five sites received the health insurance benefit (HCTC) or the wage insurance benefit (ATAA), but many workers told us they were unaware of these benefits. Participation rates for the HCTC benefit did not exceed 12 percent at any site, according to our survey estimates. In most sites, over half of the workers who visited a one-stop center said they were unaware of the benefit, despite efforts by state and local officials to inform them about the benefit. Of the workers who were aware of the benefit but did not use it, about half or more at each site said they did not need it because they had other health insurance, or it was too expensive. Likewise, few older workers received the ATAA benefit. Awareness of the benefit varied greatly by site, ranging from 0 percent of potentially eligible Toro workers in Mississippi to 81 percent of potentially eligible Lear workers in Pennsylvania. In addition, some workers aware of the ATAA benefit chose not to receive it because they did not want to forfeit their training benefits or because they did not find a new job within 6 months of their layoff.

Few Workers Received HCTC at Any Site, and Less Than Half Knew about HCTC at Most Sites

Few workers at the sites we visited received the HCTC benefit, but it is difficult to assess the demand for this benefit among non-participants because many workers told us they were unaware of the benefit. Participation rates for HCTC, a benefit in which eligible participants may receive a tax credit covering 65 percent of their premiums for certain health insurance plans, did not exceed 12 percent at any site (see fig. 14). Men were significantly more likely to receive HCTC than women, and Lear workers in Pennsylvania were significantly less likely to receive HCTC than workers at any other site, when controlling for other characteristics.

Most workers visited a one-stop center at all sites, and at four of the five sites, fewer than half of these workers said they were aware of the HCTC benefit (see fig. 15). Workers in several sites told us they might have applied for HCTC if they had known about the benefit.

While state and local officials told us they took a number of steps to inform workers about HCTC, these efforts were not always successful. Officials in all sites said they discussed HCTC benefits at rapid response sessions or TAA information meetings, and provided written literature on HCTC to workers. These materials varied by site, and they were either distributed at the rapid response meetings or mailed to workers at their homes. State officials in Washington prepared a bright pink flyer to distribute to workers highlighting the HCTC benefit, hoping that the coloring of the flyer would draw workers’ attention to the material. The flyer also highlighted the state-established toll-free telephone number that workers and local one-stop center staff could call to get further information about the HCTC benefit. In Massachusetts, the state attaches a HCTC brochure to letters sent to affected workers notifying them of their potential eligibility for TAA. However, some workers told us they were sometimes overwhelmed by the prospect of being laid off and by the volume of information received at the time of the layoff, and, therefore, could not absorb all of the information they received.

While officials at all sites introduced HCTC at initial information meetings and distributed literature on the benefit, we found that the information provided to workers during follow-up discussions varied, and state officials in the sites saw their roles differently. For example, in Massachusetts and Pennsylvania, if workers asked detailed questions about the benefit, case managers were instructed to have workers call the IRS’s toll-free HCTC number. A Massachusetts state official noted that because of HCTC’s complexity, it was too much to expect case managers to become experts on the benefit and to be able to answer workers’ questions. On the other hand, case managers in Washington receive quarterly training on HCTC from state officials. During these training sessions, case managers are specifically instructed to tell clients about HCTC and are expected to answer basic questions about the benefit.

About half or more of the workers at each site who were aware of HCTC and chose not to participate said they did not need to use the benefit because they had coverage through another source, such as through their spouse’s health insurance plan. Other reason that workers gave for not participating in HCTC were that it was too expensive or too confusing (see fig. 16). Some workers who said they had other coverage listed multiple reasons why they did not participate in the benefit. After excluding those who said they had other coverage, most workers at each site, who were aware of HCTC, said that they did not participate because it was too expensive. A smaller number of workers at each site said they did not participate because the benefit was too confusing. (See app. III for more detailed survey results on reasons workers chose not to participate.)

About half or more of the workers in each site who were aware of HCTC, but did not use it, told us that even with the benefit’s 65 percent credit, they could not afford the health care insurance premiums. The monthly cost of available health care plans covering one worker in our five sites ranged from $233 per month to $488 per month (see table 5). Premiums for family plans ranged from $651 per month to $1,512 per month. Workers receiving HCTC benefits would be responsible for paying 35 percent of these amounts. With HCTC benefits, the least expensive individual plan would cost $82 per month, and the least expensive family plan available would cost $228 per month. Workers receiving UI benefits received maximum monthly payments of between $840 and just over $2,000 depending on the state they lived in. Depending on the type of health insurance plan workers received, a large portion of their UI benefits could have been spent on health care. For example, the average cost of insurance premiums for a family plan in Mississippi was about $1,000 per month, leaving workers with an out-of-pocket cost of about $350 per month, roughly 41 percent of the maximum monthly UI benefit of about $840 in Mississippi. For four states, these costs were for COBRA continuation plans only. Pennsylvania also had two state-qualified options that were available in the county where the Lear layoff occurred, but the monthly premiums for these plans were generally no less expensive than for COBRA continuation plans.

In addition, some workers chose not to receive HCTC because they found the benefit confusing. For example, one Sanmina-SCI worker from Massachusetts commented during the survey that the 10-page pamphlet he received from the state on HCTC was too confusing. Similarly, a Lear worker in Pennsylvania said he had to take the pamphlets he received to the one-stop center for additional explanation. When the one-stop officials referred him to a phone number, he decided it was too difficult to pursue the benefit. Workers at another site said that they did not understand that they could receive HCTC benefits under their spouse’s health care plan in some circumstances.

In a prior report, we recommended that Labor help individuals better understand HCTC, including the eligibility requirements, and Labor has begun to take steps to help inform workers about the program. For example, Labor held forums for state agency staff on integrating dislocated worker services in early 2004, which included discussions of the HCTC benefit. In addition, Labor is developing fact sheets on HCTC for states to distribute to trade-affected workers at rapid response meetings and at one-stop centers. Labor has also informally encouraged states to have local case managers talk about HCTC with clients. Despite these efforts, many workers were still unaware of HCTC at the time of our survey.

Few Workers Received Wage Insurance Benefits at Any Site

Few workers participated in the wage insurance benefit at the four sites that were certified for Alternative Trade Adjustment Assistance (ATAA), a program that subsidizes some of the difference between the prior and new wages of older trade-affected workers who find reemployment quickly. At the four sites which were ATAA-certified, between 21 percent and 72 percent of the population were age 50 or older and, therefore, potentially eligible for the wage insurance benefit. No more than one in five of these potentially eligible workers participated in ATAA at any site. For example, at Lear in Pennsylvania, where the largest proportion of potentially eligible workers received ATAA, about 30 percent were 50 years of age or older at the time of the survey, but only about 18 percent of these older workers (or about 5 percent of all Lear workers) actually received ATAA (see fig. 17).

While state or local officials in three ATAA-certified sites told us that they discussed the ATAA benefit at rapid response meetings and TAA information meetings, workers’ awareness of the ATAA benefit varied greatly at the sites we visited. Awareness among workers who were 50 years old and older and visited a one-stop center ranged from zero percent of Toro workers in Mississippi to 81 percent of Lear workers in Pennsylvania (see fig. 18). State or local officials at three of the four ATAA-certified sites told us they discussed the ATAA benefit at rapid response meetings or TAA information meetings. However, some workers said they were overwhelmed by the volume of information received after the layoff, and some told us they did not necessarily recall ATAA specifics. Labor officials are taking steps to promote the ATAA benefit, such as informally encouraging states to ensure case workers talk about ATAA during one-on-one case management sessions.

Workers gave additional reasons for not participating in the ATAA benefit. According to several state and local officials, workers may not want to give up the opportunity to enter training for the $10,000 wage subsidy. Several older workers also reported on our survey that they did not receive ATAA, in part, because they did not find a new job within 6 months of their layoff. Officials and older workers told us that it was difficult for older workers to find new jobs. For example, a dislocated Weyerhaeuser worker told us he would have been willing to forfeit his training benefits for ATAA had he been able to find a job within 6 months of the layoff. However, he said that the high wages that he had earned from Weyerhaeuser may have discouraged potential employers.

Conclusions

The TAA program targets manufacturing workers affected by international trade, who may have fewer transferable skills and face greater challenges to reemployment than other dislocated workers. The program provides a unique blend of services and benefits that have been designed to meet these workers’ needs—some of which are not available to other dislocated workers. But little has been known about whether the services provided are the right mix for today’s workers who are dislocated due to trade. This study provides a glimpse of the needs of a small group of workers, the services they received, and their employment outcomes about 8 to 22 months after their layoffs.

Workers affected by these layoffs have taken a variety of paths. A large majority sought some assistance from their one-stop center. Relatively small numbers chose to enroll in training, but those who did often used this opportunity to chart a new career path. A few did not seek any federally funded reemployment services, and yet were still successful in getting a new job. We cannot know all the factors that motivated workers to seek particular services or that affected their employability, and we cannot assess the role that TAA services played in the outcomes workers achieved. It may be that some workers make an independent assessment of what they need to help them rejoin the workforce and then try to take the necessary steps to make that happen.

While few workers took advantage of training and long-term income support through the TAA program, even fewer made use of two new benefits under the TAA program—health insurance assistance and wage insurance for older workers. Workers who knew about the benefits sometimes told us that the benefit levels were not high enough to get them to participate. But relatively large numbers were simply not aware of the benefits, and some said they might have applied for the benefits had they known about them. Sometimes workers admitted to being overwhelmed by the prospect of losing their jobs and by the wealth of information they initially received. However, states’ efforts to inform workers about and explain these benefits have been mixed at best—some trained their case managers to answer questions from workers, while others did not see that as their role. Despite Labor’s efforts to encourage states to make this information more widely available, many workers still do not know about these benefits and, as a result, cannot make use of them. Without better information, these workers may not have the opportunity to avail themselves of benefits that could ease their transition to reemployment.

Recommendations for Executive Action

We recommend that the Secretary of Labor provide guidance to states and local officials on how to better ensure that workers are aware of two new benefits under the TAA program: the Health Coverage Tax Credit and the Alternative Trade Adjustment Assistance program.

This guidance should clarify that workers need additional information beyond what is provided at initial informational meetings.

Agency Comments

We provided a draft of this report to officials at Labor for their review and comment. In its comments, Labor agreed with our findings and recommendations, noting a number of steps it has already taken to improve access to HCTC and ATAA for eligible workers. Labor also acknowledged that more needs to be done, saying that many of the difficulties encountered in providing services and administering benefits are driven by the complexities of the systems used to implement the program. Labor noted additional steps it will be taking to help ensure access to services, such as working with the IRS and states to identify and resolve HCTC issues as they arise, and developing a revised TAA benefits brochure for workers to be distributed by states. Labor also provided technical comments which were incorporated as appropriate. A copy of Labor’s response is in appendix X.

As arranged with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution of this report until 15 days from the date of this report. At that time, we will send copies of this report to the Secretary of Labor, relevant congressional committees, and others who are interested. Copies will also be made available to others upon request. The report is also available at no charge on GAO’s Web site at http://www.gao.gov.

Please contact me on (202) 512-7215 if you or your staff have any questions about this report. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of the report. Key contributors to this report are listed in appendix XI.

Appendix I: Objectives, Scope, and Methodology

We examined (1) the extent to which workers accessed federally funded reemployment services and the mix of services received, (2) the employment outcomes these workers achieved, and (3) the extent to which workers used the new health insurance and wage insurance benefits under the Trade Adjustment Assistance (TAA) program, and the factors affecting their participation. To address these issues, we selected five plant closures that were determined by the U.S. Department of Labor to be related to international trade, visited each layoff site, conducted a telephone survey of workers affected by each plant closure, held focus groups with affected workers, and collected state administrative data on services and benefits received. We also interviewed officials from Labor. We conducted our work from November 2004 to December 2005 in accordance with generally accepted government auditing standards.

Case Study Site Selection

To obtain information for this report, we judgmentally selected five plant closures based on several criteria. First, we selected five states by considering factors such as states’ prior TAA training allocations and number of TAA participants, the manufacturing products that have been affected by mass layoffs in different states, and geographic diversity. We then chose plant closures within the five states that met several criteria: the plant closures were determined to have been related to international trade by the U.S. Department of Labor, and therefore all or some of the affected workers were potentially eligible for the TAA program; the plants manufactured a variety of products; the closures affected between 100 and 500 workers; and the closures occurred after the TAA Reform Act of 2002 was enacted. We also sought to achieve a mix of sites in rural and metropolitan areas. Based on these criteria, we selected plant closures that had occurred at General Mills (Mo.), Lear (Pa.), Sanmina-SCI (Mass.), Toro (Miss.), and Weyerhaeuser (Wash.). Because we studied only five plant closures and because of the method of selection, we cannot conclude that our findings are representative of the experiences of trade- affected workers nationwide.

Site Visits and Focus Groups

We visited each site to obtain information on the plant closures and to learn about the experiences of the affected workers. During the site visits, we interviewed state and local officials, training providers, and, when available, company and union officials. We also held focus group discussions with workers at each site to learn more about workers’ experiences with employment and training services. Focus group participants were recruited by one-stop center case managers, as it was not feasible for us to recruit focus group participants at each site. Because of this selection method, the focus group participants did not include any workers who had not visited a one-stop center. This selection method could have introduced bias into the focus group results; however, the information we obtained from focus groups was used only to provide examples. We conducted 15 focus groups in total, with between two and seven workers participating in each focus group. A total of 69 workers participated across all sites (see table 6). The questions used for the focus groups covered topics such as workers’ experiences with one-stop center services and training and the helpfulness of those services, knowledge about and participation in the HCTC and ATAA programs, and employment outcomes. GAO facilitators conducted the focus groups, the discussions were tape recorded, and transcripts were professionally prepared.

Review of State Administrative Data

We reviewed state administrative data on workers’ demographics and services received, and, when available, state wage records on workers’ employment outcomes. The data we reviewed included workers’ age, education level, weeks of UI received, training program enrollment, cost of training, and reemployment status. Administrative data were not available for every worker in each site. We recoded certain elements in the raw data so that they would be comparable across sites. For example, we recoded workers’ training programs into a few standardized categories. When recoding the data, we reached a team consensus on the recodes and independently checked each recode. We assessed the reliability of the data by interviewing state officials who had provided the data, performing edit checks of the data, and comparing the administrative data to information generated from the telephone survey. Based on these methods, we found state data quality processes and procedures to be sufficiently reliable for the purposes of our report.

Telephone Survey

We conducted a telephone survey of all workers who were laid off from the five plants we studied. The survey was designed to obtain information on workers’ experiences with local one-stop centers, HCTC, and ATAA; use of UI benefits; employment outcomes; and demographics. We obtained lists of affected workers at each site from state officials. Prior to administering the survey, we pre-tested the survey questions with workers at each site, and made changes to the questions based on these pretests. The data from 15 completed pre-tested interviews were incorporated into the final dataset.

The surveys were administered via phone by a contractor hired by GAO. The survey was conducted from April 19, 2005, through June 24, 2005. The survey administration included the following elements: (1) advance letters were mailed to all dislocated workers approximately 5 to 7 days prior to the start of data collection to provide information on the study and add legitimacy and saliency to the survey; (2) all interviews were conducted via Computer Assisted Telephone Interviewing (CATI), and a minimum of 10 callbacks were made to each worker to maximize contact and response rates; and (3) all cases with missing information or incorrect contact information were researched via several avenues to find the most accurate information for each worker. Survey response rates for each survey ranged from 66 percent to 86 percent (see table 7). Some of the reasons workers did not complete the survey included that their phone numbers were no longer in service, they had passed away since their layoff, they had limited English skills, or they declined to complete the survey.

We investigated the magnitude of potential non-response bias in the results of dislocated worker surveys at the five locations, and concluded that there was no significant non-response bias at any of the five locations. We compared administrative data on worker demographics and services received for survey respondents and the overall population and found there generally were not significant differences between survey respondents and the overall population for each site. Therefore, we chose to generalize the survey results to the entire population of affected workers at each site. We generated estimates for each site by treating the responding workers as simple random samples from each of the populations.

Because we decided to treat the respondents as simple random samples, our results are estimates of the populations and thus are subject to sampling errors that are associated with samples of this size and type. Our confidence in the precision of the results from these samples is expressed in 95 percent confidence intervals, which are expected to include the actual results in 95 percent of samples of this type. All percentage estimates have margins of error of plus or minus 7 percent or less unless otherwise noted. All wage related estimates have relative margins of error of plus or minus 10 percent or less unless otherwise noted.

The practical difficulties of conducting any survey may introduce other errors, commonly referred to as non-sampling errors. These errors can occur if survey respondents have difficulty interpreting a particular question, lack information necessary to answer a question, are uncomfortable with accurately reporting certain sensitive information, or do not answer certain questions, among other factors that affect data collection and measurement. We took steps in the development of the survey, the data collection, and the data analysis to minimize these non- sampling errors.

Regression Analysis of Survey Data

As a complement to our interviewing and focus group efforts we also applied logistic regression analysis to our survey data to identify factors affecting the likelihood that workers received a set of services. Specifically, we examined the effects of a series of demographic and other variables from our survey on the likelihood of a worker (1) coming into a one-stop center, (2) receiving training, and (3) receiving HCTC. The demographic and other variables we examined included gender, age, education, tenure in previous job, pre-layoff wage, and time since layoff. The full results of this analysis are presented in app. IV.

Appendix II: Detailed Breakdown of Workers’ Training Providers and Costs by Site

Appendix II: Detailed Breakdown of Workers’ Training Providers and Costs by Site (Mo.)

Lear (Pa.) (Wash.) (Miss.) (Mass.)

General Mills (Mo.) (Wash.) (Miss.)

Appendix III: Detailed Breakdown of Participation in HCTC

The following tables provide further detailed analysis of workers’ use of HCTC and their reasons for not participating in the benefit. Table 10 provides information on the number of workers who visited a one-stop center and were aware of the HCTC benefit and whether they participated in HCTC. Table 11 provides information on the reasons given by workers for not participating in HCTC. Note that in Table 11 respondents could choose more than one of these reasons for not participating.

Appendix IV: Regression Analysis of Survey Data

To determine what factors were related to whether workers went to a one- stop center, received training, or received HCTC benefits, we used multivariate logistic regression models to estimate the effects of several factors. The advantage of the multivariate approach is that the effect of any given factor is estimated after its relationship with other factors is taken into account. The factors we considered were sex, age, education, tenure, time since the layoff, pre-layoff wage, and site, or the plant where the worker had been employed.

The logistic regression approach requires that we use odds and estimate differences in the odds by taking their ratios. Table 12 below provides an example of how odds and odds ratios are calculated. The top panel of table 12 shows that 88 percent of female workers visited a one-stop center, compared to 80 percent of male workers. Alternatively, we can calculate the odds on women and men visiting a one-stop center, which were 291/38 = 7.7 and 608/150 = 4.0, respectively. These odds imply that 7.7 women visited a one-stop center for every woman that did not, and that 4.0 men visited a one-stop center for every man that did not. Moreover, the ratio of the two odds, 4.0/7.7 = 0.52 can be interpreted as meaning that the odds on visiting a center were only half as large for men as for women. While this might seem inconsistent with the difference between 88 percent and 80 percent, consider that 12 percent of the women but 20 percent of the men (nearly twice the percentage) did not visit a one-stop center. When the factor being considered has more than two categories, we choose any one category arbitrarily as the referent category, and calculate the ratios of the odds for all other categories relative to that one. For example, in the bottom panel of table 12 we see the odds on visiting a one-stop center in each of the five sites, and odds ratios which indicate how much different the odds were for every site relative to General Mills. These odds ratios indicate that at the Sanmina-SCI, Lear, and Weyerhaeuser sites, the odds on visiting a one-stop center were greater than in General Mills, by factors of 2.3, 2.8, and 2.0, respectively. The odds were highest at the Toro site, in fact, but because all workers visited a center in that site, the odds, and thus the odds ratio, are undefined.

Table 13 shows the effects of the different factors on visiting a one-stop center (first column), receiving training (second column), and receiving the HCTC benefit (third column) when we use multivariate logistic regression models to estimate their effects simultaneously. As noted above, the advantage to this approach is that it allows us to estimate the effect of each factor after taking account of the fact that the different factors are related to each other (i.e., males and females in the sample may have different lengths of service or wages, workers at different sites may vary by sex, education, etc.) and have sometimes intertwined effects on the outcomes of interest.

Sex, pre-layoff wage, and site are the only factors that have significant effects on the likelihood of visiting a one-stop center. Men were roughly half as likely as women to visit a one-stop center (odds ratio of .486). Better paid workers were less likely to visit a center as well, with every $10 increase in pre-layoff wage diminishing the odds of visiting a center by a factor of 0.617. Net of the other factors, workers at the Toro and Weyerhaeuser sites were nearly 12 times as likely as workers at General Mills to visit a center, and workers at the Sanmina-SCI and Lear sites were roughly 3 times as likely as workers at General Mills to do so. This implies that (1) workers at Toro and Weyerhaeuser were similar with respect to the likelihood of visiting a center; (2) workers at Sanmina-SCI and Lear were likewise similar; and (3) workers at Toro and Weyerhaeuser were 11.98/3.19 = 3.8 times as likely to visit a center as workers at Sanmina-SCI and Lear. Once these effects, and the differences across sites, were taken account of, none of the other factors (i.e., age, education, etc.) appeared to have any significant effect.

The only factors that had significant net effects on the likelihood of receiving training were age and site. Workers over age 55 were less than half as likely to receive training as workers under age 40. Workers at Sanmina-SCI were more than three times as likely to receive training, and workers at General Mills and Lear were more than twice as likely to receive training, as workers at Toro and Weyerhaeuser.

Finally, the factors which affected whether workers received the HCTC benefit were sex, education, tenure, time since layoff, and site. Men were twice as likely as women to receive HCTC, and workers with some college were half as likely as workers with less than a high school education to receive the HCTC benefit. Workers with 10 or more years of service were less than half as likely to receive HCTC as workers with less than 10 years, and workers laid off earlier were more likely to receive the benefit, because each additional month since the layoff increases the odds on receiving it by a factor of 1.025. Net of these effects, workers at every plant except Lear were alike, and more than twice as likely as the workers at Lear to receive the HCTC benefit.

Appendix V: General Mills Plant Closure (Hazelwood, Mo.)

Appendix V: General Mills Plant Closure (Hazelwood, Mo.)

The General Mills plant located in Hazelwood, Mo. (population 26,000 in 2004) shut down in 2003. Hazelwood is a city located 18 miles northwest of St. Louis and most of the plant’s employees lived in the St. Louis metropolitan area in St. Louis County (see table 14). The St. Louis metropolitan area experienced several large layoffs in 2003 that affected almost 1,000 manufacturing workers and left the metropolitan area with one of the state’s highest unemployment rates in 2003. State and local officials say that food manufacturing, once a major employer in the St. Louis metropolitan area, is in a state of decline, resulting in few dislocated General Mills workers being able to find new jobs with the area’s existing food manufacturers.

General Mills is an international company that produces an array of packaged consumer foods such as cereals, refrigerated and frozen dough products as well as snacks and yogurt. General Mills employed over 27,000 workers and operated 36 plants in the United States in 2004. General Mills’ Hazelwood plant produced frozen dough products such as cakes and doughnuts, employed over 400 workers at the time it closed, and paid workers an average of $12.45 per hour—comparable to wages paid in the St. Louis metropolitan area by other employers. The affected workers were predominantly male, 40 years old or older, had worked at the plant for at least 10 years, and had at least a high school diploma (see table 15). State and union officials told us that the workers were not considered highly skilled. Most of the workers were unionized through the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

The General Mills plant completely ceased operations in October 2003 as a result of a shift in production to Canada. General Mills gave the state of Missouri official notice of its intentions to close its plant on December 18, 2002, and began laying off workers in waves beginning in January 2003 and ending in October 2003 (see fig. 19). According to the employer, only some salaried employees were offered transfers to other General Mills plants. Unionized workers were not eligible for transfers to other General Mills plants. A group of workers from the Hazelwood plant submitted a petition for TAA eligibility with Labor. Labor began its investigation in June 2003 and certified the layoff as TAA eligible in July 2003. Workers were not eligible for the wage insurance program (ATAA), which was not implemented until August 2003.

Appendix VI: Lear Plant Closure (Lewistown, Pa.)

Appendix VI: Lear Plant Closure (Lewistown, Pa.)

The Lear plant in Lewistown, Pa. (population of about 8,800 in 2003) closed in 2004. Most of the plant’s employees lived in Lewistown, the largest town in rural Mifflin County in central Pennsylvania (see table 16). The town is relatively geographically isolated: it is situated in a valley, with about a 30-mile drive over mountain roads to the nearest city. The Lewistown area experienced four mass layoff events between 2002 and 2004, including the closure of the Lear plant. The resulting loss of about 700 jobs had a significant impact on the local economy, according to Pennsylvania state officials.

Lear manufactures automobile interiors, and had about 300 plants nationwide at the time it closed its Lewistown plant. The Lewistown plant produced automobile carpets; employed about 300 workers; and paid wages of $15 to $17 per hour, some of the highest in the area. The workers at the plant were predominantly male and age 40 or older, most had worked at the plant for at least 10 years, and the vast majority had at least a high school diploma (see table 17). They also had fairly specialized job skills, according to local officials. Most of the workers were unionized through UNITE (formerly the Union of Needletrades, Industrial and Textile Employees). The union did not play an active role in serving the workers when they were laid off, according to some workers and officials.

The Lear plant in Lewistown was closed on February 15, 2004, primarily as a result of a shift of production to another country. Lear officially notified the state of Pennsylvania of the Lewistown plant closure on October 1, 2003, and most workers were laid off from the plant between November 2003 and February 2004 (see fig. 20). Twenty-six of the workers laid off from Lear’s Lewistown plant were hired at Lear’s plant in Carlisle, Pa. (approximately 60 miles from Lewistown) and then laid off primarily in January 2005 when production was reduced at that plant. A group of workers from the Lewistown plant submitted a petition for TAA eligibility. Labor began its investigation of the petition in October 2003, and certified the affected workers as TAA-eligible in November 2003, finding that the plant closure was related primarily to a shift of production to Canada. Labor also certified the workers as eligible for the wage insurance (ATAA) program.

Appendix VII: Weyerhaeuser Plant Closure (Longview, Wash.)

Appendix VII: Weyerhaeuser Plant Closure (Longview, Wash.)

The Weyerhaeuser plant located in Longview, Wash. (population 35,943 in 2003) shut down 2003. Most of the plant’s employees lived in or around the Longview metro area in Cowlitz County situated along Washington’s southeastern border with Oregon (see table 18). Longview lies about 50 miles east of Portland, Oregon, and 100 miles south of Tacoma, Wash. Cowlitz County experienced several large layoffs from 2001 to 2003 that affected more than 1,600 workers and left the county with the state’s second highest unemployment rate in 2004. According to state and local officials, these layoffs have had a significant impact on the local economy, and while a few years ago laid-off workers were quickly absorbed by other local employers, laid-off workers are now having difficulty finding jobs.

Weyerhaeuser is an international company that manufactures a host of wood-related products, ranging from paper and paper packing products to finished wood products such as lumber used in home construction. Weyerhaeuser’s fine paper plant produced paper commonly used for copying and printing. Weyerhaeuser employs about 65,000 workers internationally of which about 27,000 work in its plants across the United States. Weyerhaeuser operated its fine paper plant on its 700-acre company campus in Longview. Over 200 workers were employed at the fine paper and pulp plant and about 2,000 at Weyerhaeuser’s campus overall. Weyerhaeuser still operates several other production lines on this campus. According to state officials, Weyerhaeuser is considered one of the best companies to work for in the Longview area and pays some of the area’s highest wages. Entry level positions at the fine paper plant started at $17 per hour and most affected workers were earning an average of $24 per hour. Affected workers were considered highly skilled and most had at least a high school diploma (see table 19). The majority of the workers were male, 55 years of age or older, and had worked at the plant for at least 20 years. The workers were unionized through the Association of Western Pulp and Paper Workers. State and local one-stop center officials told us that they worked closely with union representatives to coordinate outreach and services for affected workers.

The plant ceased operations in mid-2004 as a result of a shift in production to Canada. Weyerhaeuser gave the state of Washington official notice of its intentions to close its fine paper plant on November 26, 2003, and workers were laid off in waves beginning in November 2003 and ending in August 2004 (see fig. 21). According to the employer, almost 50 workers were reabsorbed at other Weyerhaeuser plants operating in Longview or Cosmopolis, Wash. (almost 100 miles from Longview). In accordance with union rules affected workers were able to bid on positions held by junior Association of Western Pulp and Paper Workers members working at Weyerhaeuser. Furthermore, many affected workers were also eligible for retirement. The union negotiated an early retirement option available to workers who had at least 10 years of service to the company and were at least 55 years old. The union filed a petition for TAA eligibility with Labor. Labor began its investigation of the petition in November 2003 and certified the layoff as TAA eligible in January 2004. Workers were also certified as eligible for the wage insurance (ATAA) program.

Appendix VIII: Toro Plant Closure (Oxford, Miss.)

Appendix VIII: Toro Plant Closure (Oxford, Miss.)

The Toro plant located in Oxford, Miss. (population of about 12,700 in 2003) shut down in 2004. Oxford is the largest city in rural Lafayette County in northern Mississippi, and most of the plant’s employees either lived in Lafayette County or surrounding counties (see table 20). According to local officials, Lafayette County experienced four mass layoff events and plant closures between 2002 and 2004, including the Toro plant, which contributed to a 40 percent reduction in manufacturing jobs in the county.

Toro designs, markets, and manufactures landscaping equipment, and employed about 5,200 employees worldwide in 2004. Toro’s Oxford plant produced two-cycle engines for lawnmowers, employed about 110 employees, and paid workers between $8.50 and $15 per hour depending on their job title. Approximately 40 employees were machinists (who created the engine parts produced at the Oxford plant) and the remaining 70 employees included assemblers (who put the engine parts together). Only the machinists were TAA-certified. Most machinists at the plant were male, 40 years old or older, had worked at the plant for at least 10 years, and had at least a high school diploma (see table 21). The workers were not unionized.

The Toro plant in Oxford was closed on July 30, 2004, at least partly as a result of a shift of production to China. Toro gave the state of Mississippi official notice of its intentions to close the Oxford plant on January 30, 2004, and most workers were laid off during April and May 2004 (see figure 22). The company submitted a petition for TAA eligibility to Labor on behalf of the workers. Labor began its investigation of the petition on January 26, 2004, and certified the 40 machinists as TAA-eligible on February 19, 2004, because the plant closure was related to a shift of machining two-cycle engine components to China. However, Labor did not certify the assemblers as TAA-eligible because it determined Toro was shifting the assembly of two-cycle engines to another domestic facility. Labor also certified the machinists as eligible for the wage insurance (ATAA) program.

Appendix IX: Sanmina-SCI Plant Closure (Wilmington, Mass.)

Appendix IX: Sanmina-SCI Plant Closure (Wilmington, Mass.)

The Sanmina-SCI plant located in Wilmington, Mass. (population of about 22,000 in 2003) closed in 2004. Wilmington is in Middlesex County roughly 16 miles northwest of Boston (see table 22). About two-thirds of the plant’s employees lived in Massachusetts, and almost a third lived in New Hampshire. Economic conditions during 2004 and 2005 have been varied among the communities where Sanmina-SCI workers lived. Some of these workers lived in communities that have experienced a number of trade- related layoffs in recent years, and have had relatively high unemployment. But other Sanmina-SCI employees lived in communities that had lower unemployment rates and, according to local officials, experienced strong job growth.

Sanmina-SCI is an electronics manufacturing company with operations in over 20 countries. The Wilmington plant produced printed circuit boards and employed almost 500 workers at the time it was closed. The workers at the plant were predominantly male, age 40 or older, and over half had worked at the plant for at least 10 years. At least three-quarters had a high school diploma or GED (see table 21). The workers were not unionized.

The Sanmina-SCI plant in Wilmington was closed in September 2004, at least partly as a result of a shift of production to another country. Sanmina-SCI officially notified the state of Massachusetts of the Wilmington plant closure on July 20, 2004, and most workers were laid off from the plant between August and October 2004 (see fig. 23). The company submitted a petition for TAA eligibility to Labor. Labor began its investigation of the petition in July 2004 and certified the affected workers as TAA-eligible in August 2004 because the plant closure was related to a shift of production to Malaysia. Labor also certified the workers as eligible for the wage insurance (ATAA) program.

Appendix X: Comments from the Department of Labor

Appendix XI: GAO Contact and Staff Acknowledgments

Acknowledgments

Dianne Blank, Assistant Director In addition, the following staff made major contributions to this report: Irene J. Barnett and Amanda Mackison served as team members; James Ashley, David Dornisch, Beverly Ross, Douglas Sloane, and Shana Wallace provided guidance and assistance with design and methodology issues; Jonathan McMurray advised on report preparation; Jessica Botsford advised on legal issues; Avrum Ashery and Karen Burke provided graphic design assistance; and Ramona Burton, Anne Cangi, Maureen Driscoll, Anna Kelley, Christopher Murray, Carol Patey, Michelle St. Pierre, and Wayne Sylvia verified our findings.

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