Program Helps Those Whose Jobs Go Overseas

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What happens to workers who lose their jobs when factory production moves overseas? David Wessel, deputy Washington bureau chief of The Wall Street Journal talks about "wage insurance." The program provides a financial cushion for older workers who've lost jobs to overseas markets.


An effort to insure workers against the ill effects of free trade deals may not be working. Whenever Congress and the White House pass free trade legislation, they include programs that they say will help workers who lose their jobs when factory production moves overseas. David Wessel, deputy Washington bureau chief for The Wall Street Journal has been looking into one such program and has brought his findings here.

Good morning, David.

Mr. DAVID WESSEL (The Wall Street Journal): Good morning.

INSKEEP: OK. This program is called `wage insurance.' How's it work?

Mr. WESSEL: Basically the deal is if you're over 50 and you lose a job because of imports or your production moved overseas and you get another job that doesn't pay as well as the one you lost, the government will give you a check for half the difference for a couple of years, up to $10,000.

INSKEEP: The idea is you won't be making the same, but you get a little bit of assistance to make up for the fact that you're now working at Wal-Mart instead of a factory.

Mr. WESSEL: Exactly. And the idea is that first of all, we want to give workers some reason to go out and find a job rather than to go on unemployment or go on disability or whatever, and secondly that since a lot of us benefit from trade, whether it's cheaper imports or high-wage export jobs, that the society ought to compensate those people who are losers by giving them a little cushion, and that's what this program is all about.

INSKEEP: OK, sounds like a good concept. Why doesn't it work?

Mr. WESSEL: Well, this program was stuck into a 2002 law that renewed President Bush's authority to negotiate trade agreements. It's one of those things they stick in because they have to feel like they're doing something for workers. First, Congress made it very complicated. They dropped the wage insurance phrase and called it `alternative trade adjustment assistance,' which is hardly a worker-friendly phrase. And they put a number of restrictions on it, like you have to be able to show that your skills aren't easily transferable in order to get the money, and then the paperwork is sort of complicated. And then the Labor Department didn't handle it very well at first. In fact, initially they forget to put a little box on the form you fill out if you are laid off because of trade, and there was no way to check the box that you were applying for this thing.

They fixed that, but still it's been sort of clunky, hasn't gotten much attention, and between August of 2003, when it started, and the end of 2004, a total of 1,400 people qualified for this aid.

INSKEEP: Fourteen hundred.

Mr. WESSEL: Right. And we know, from all the headlines and horror stories, that there's more people over 50 who've lost jobs because of trade--it just--the program hasn't gotten--barely gotten off the ground.

INSKEEP: Is this just because of the requirements you mentioned, people actually have to come in and prove that they're not competent to take over another job, for example?

Mr. WESSEL: I think that's part of it. Mostly what happens is unions or companies or state agencies involved when a plant closes fill out the forms for groups of workers, and although the Labor secretary talks about it in speeches, there was no effort to promote this. There's not even a simple flier that explains it to workers. So it's basically put into law to make people feel better, but there hasn't been very much follow-through.

INSKEEP: You alluded to the headlines. Is it fair to say that there are millions of people who could use some assistance, who are being shifted into lower-paying jobs right now?

Mr. WESSEL: One of the frustrating things about these trade adjustment assistance programs is they require you to show that it was trade rather than something else, like new technology, that displaced you. So there are lots of people who have been displaced, clearly, hundreds of thousands of people who have been displaced and been forced to take lower-paying jobs. How many of them are actually able to pin that on trade as opposed to something else is anybody's guess.

INSKEEP: So have lawmakers recognized that this program they put in place isn't helping very many people, and are they doing anything about it?

Mr. WESSEL: Well, as far as I can tell, this has gotten very little attention in Congress. There are things that they could have done legislatively when they passed the Central American Free Trade Act, for instance, which was a logical place to do it. But as far as I can tell, it never came up in the discussions. Within the Labor Department, however, there is a sense that they could do better, and they've made some steps to streamline the process and they tell me that they have some new steps in the works to make it easier for people to apply for and get something which Congress intends them to have.

INSKEEP: David Wessel is deputy Washington bureau chief for The Wall Street Journal, not yet displaced.

Thanks, David.

Mr. WESSEL: Thank you.

INSKEEP: Still working for you, this is MORNING EDITION from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE (Host): And I'm Renee Montagne.

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