NCPA - National Center for Policy Analysis


April 20, 2009

The U.S. unemployment-insurance system is a patchwork of state and federal programs.  Each state administers its own benefits, doling out up to 26 weeks of checks based on the worker's former salary.  These trade-adjustment benefits (part of the Trade Adjustment Assistance (TAA) program) are meant to help usher workers out of dying industries into more robust fields by providing job retraining.  However, the government spent about $1 billion last year covering TAA costs, and since the program is a federal entitlement, offered to all who qualify, the tab could continue to rise, says the Wall Street Journal.

And the government just sweetened the pot even more for TAA recipients, says the Journal:

  • Workers approved after May 18, 2009 will qualify for an 80 percent tax credit for health insurance, up from 65 percent currently.
  • They'll be eligible for as much as two and a half years of cash payments, with schooling and related transportation paid during the period.
  • TAA beneficiaries over 50 who find lower-paying work can recoup as much as $12,000 in "lost" wages from the government, up from $10,000.

However, to receive such enhancements, workers must meet three criteria:

  • A "significant number" of jobs must be threatened -- three workers in a group of less than 50, or 5 percent of a larger work force.
  • Their unit's sales or production must have declined.
  • The decline must be attributable to competing imports or the company's own production shift to another country.

Yet, many companies are waiting on the sidelines for the enhancements to kick in, and applications are overwhelming the Labor Department, where just three "certifying officers" sign off on trade-adjustment petitions.  In 2007, the most recent year tracked, the trio ruled on 2,222 petitions, approving 1,449.  Hundreds are currently pending, including from Georgia-Pacific Corp., Mercedes-Benz, Bobcat Co. and Dell.

Source: Ianthe Jeanne Dugan, "Crazy-Quilt Jobless Programs Help Some More Than Others," Wall Street Journal, April 20, 2009.

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