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American workers who lose jobs in a trade war won't get much help

Earlier this month, news came out...

Posted: Apr 30, 2018 7:32 AM
Updated: Apr 30, 2018 7:32 AM

Earlier this month, news came out that 50 Tampa Bay Times employees would face a fate typically reserved for factory workers and steel mill operators: Losing their jobs in a trade dispute.

Tariffs the United States imposed on softwood lumber from Canada had raised the paper's newsprint costs by some $3 million a year, the publisher said, and the business' already thin margins couldn't absorb that.

Normally, when a job is outsourced or terminated as a result of import competition, workers get some extra help. On top of unemployment insurance, they are also eligible for something called Trade Adjustment Assistance, an approximately $800 million a year program that provides cash and covers tuition for retraining programs to help people get back on their feet.

But the 56-year-old program doesn't cover people who lose jobs in later phases of trade disputes. The essential requirement for eligibility is that the job was lost to "foreign competition." Jobs lost due to tariffs actually levied by the United States -- which can raise domestic prices and provoke retaliatory measures from abroad -- don't qualify.

And the new tariffs promised by the Trump administration could hurt a lot of jobs. Trump announced earlier this year he would crack down on what he describes as unfair trade practices, pledging that imported steel would be taxed at 25%, and foreign aluminum at 10%. He also threatened to impose new tariffs on $150 billion of Chinese goods - with Beijing promising to push back on hundreds of US products.

Europe ready to hit back if Trump presses ahead with tariffs

Job losses in the United States could number from 25,000 to 150,000 jobs in industries that use steel, ranging from aerospace manufacturing to oil drilling, according to analyses from Moody's Analytics and the Economic Outlook Group. Overall, the loss of jobs will likely be on the lower end of the range, since Canada, Mexico, and South Korea have received waivers from the new tariffs.

But those estimates don't include the potential impact of retaliatory duties threatened by China on mostly agricultural goods. And Europe says it's ready to hit back if the Trump administration doesn't exempt it from the new tariffs starting May 1. The New York Federal Reserve estimated last week that the trade actions that ultimately go into effect would probably cost more jobs than they would save.

So far, there have been thousands of requests for exclusions from the steel tariffs from US-based companies that say making their raw material more expensive to import could force them to cut employees. For example, a producer of railway steel called Evraz, Inc. warned that it would have to lay off over 400 workers in Portland, Oregon if it didn't get an exemption. And those workers would get no help from the government, beyond unemployment insurance.

That discrepancy between those who receive special assistance and those who don't has long fueled calls for a more comprehensive system to help workers who are out of a job because of the way the economy is changing.

"It further underscores the reality that this program doesn't make a lot of sense," says Edward Alden, a fellow at the Council on Foreign Relations. "Why should a steelworker who loses their job as a result of Chinese imports be treated more favorably than a steel-using worker who loses their job because of an import tariff?"

Alden wrote a book on the subject entitled Failure to Adjust, discussing how the US fell behind in developing globally competitive industries and helping workers prepare for the jobs of the future. For example, in 2015 the United States spent less as a percentage of GDP than any other developed country on "active labor management" policies like training workers and connecting them with employment, according to the Organization for Economic Cooperation and Development.

Related: Trump renews attack on TPP: 'I don't like the deal'

A more expansive program might have even reached more steelworkers, most of whom didn't lose their jobs to unfair Chinese import competition, but rather increasing efficiency in their own plants, according to a 2015 study by economists at Duke and Princeton. The steel industry shed 75% of its workforce between 1962 and 2005 while keeping production fairly constant, largely as a result of highly productive mini-mill technology.

There have been a few proposals to help workers adapt to a changing economy, such as a San Francisco politician's idea to tax robots and use the proceeds to retrain workers. But on the federal level, the Trump administration has proposed spending less money on economic development and worker training programs, not more.

Current trade adjustment programs don't work perfectly. Government Accountability Office reports going back to 2001 document difficulties in delivering assistance, and beneficiaries on average find jobs that pay less than the jobs they lost.

But those reports also say a major problem is too few resources - for scenarios including when a worker needs to pick up and move to a new job, for example, or for free education available to people before their factory shuts down. Instead, help usually comes too little, too late.

And in the case of workers like those out of their jobs at the Tampa Bay Times, there's nothing at all.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 1524527

Reported Deaths: 20751
CountyCasesDeaths
Marion2077652558
Lake1010411517
Allen946081024
Hamilton73638551
St. Joseph65362761
Elkhart50026632
Vanderburgh48959530
Tippecanoe44411338
Johnson38772527
Hendricks36850462
Porter34709476
Madison29301547
Clark26328328
Vigo25941346
LaPorte23600313
Monroe23478249
Howard22382381
Delaware21877370
Hancock18857220
Bartholomew18433216
Kosciusko18124203
Warrick17207215
Wayne16474303
Floyd16129257
Grant15566299
Morgan14615232
Boone13622138
Noble11983142
Shelby11877152
Dearborn11825113
Henry11771201
Marshall11444171
Dubois11418152
Jackson10772104
Cass10380143
Lawrence10308221
DeKalb10292132
Huntington10277140
Gibson9749126
Montgomery9377144
Knox9162125
Harrison9157117
Whitley886771
Steuben8739105
Jasper8325116
Putnam8306100
Clinton827596
Miami8249135
Jefferson8030127
Wabash7914139
Ripley7278116
Adams6713103
Daviess6661130
Scott663586
White624484
Greene6159112
Clay615275
Decatur6062120
Wells6001120
Jennings600081
Fayette5886122
Posey561648
LaGrange535797
Randolph5171129
Washington511470
Owen5068100
Fountain482580
Spencer457456
Sullivan449866
Starke443986
Fulton440393
Orange435083
Jay419964
Rush418839
Perry397555
Carroll384549
Franklin382850
Vermillion363562
Pike327845
Parke327338
Tipton320675
Blackford275955
Pulaski275375
Newton235461
Brown233556
Benton221521
Crawford220132
Switzerland201414
Martin191822
Warren179522
Union172619
Ohio125216
Unassigned0759

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 2496243

Reported Deaths: 31987
CountyCasesDeaths
Franklin2696772100
Cuyahoga2600613087
Hamilton1742641756
Montgomery1162791651
Summit1084961418
Lucas929121193
Butler82981963
Stark766321431
Lorain63976809
Warren52895489
Mahoning50955930
Lake47462611
Clermont46371452
Delaware40674220
Trumbull39527790
Licking38492416
Medina38487427
Fairfield35469349
Greene33906435
Portage32283366
Clark31960453
Richland29400444
Wood29143301
Allen25702403
Miami23931408
Muskingum23316255
Columbiana22903409
Wayne21965365
Tuscarawas19512428
Erie18531224
Ashtabula18489362
Marion18456235
Scioto17888214
Ross17287260
Pickaway16251181
Hancock16004232
Geauga15456229
Lawrence14746186
Belmont14033248
Union1403384
Huron13838184
Jefferson13519261
Sandusky13180200
Athens12624107
Knox12037201
Seneca11934204
Darke11316202
Ashland11157184
Washington11009172
Auglaize10785147
Crawford10333178
Shelby10308160
Brown9972145
Fulton9661154
Highland9632151
Guernsey9612122
Defiance9486137
Logan9403147
Clinton9299132
Mercer9015112
Madison8971111
Preble8428170
Williams8263138
Putnam8024136
Champaign7974113
Ottawa7909123
Jackson7763121
Perry7415102
Coshocton7345136
Morrow723984
Fayette703292
Pike658489
Hardin6532133
Gallia634391
Adams6159127
Van Wert6025121
Henry598196
Hocking5835105
Wyandot498894
Carroll4961101
Holmes4857167
Paulding421665
Meigs397774
Monroe313868
Harrison296362
Noble295652
Morgan289448
Vinton254646
Unassigned08
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