New Trade Agreements Will Offshore Even More American Jobs While Unemployed Continue to Suffer
by Jessica Schieder, 6/23/2015
Despite slow improvement in the job market, many American workers are still anxious and vulnerable. The job market is still fragile, and the Trans-Pacific Partnership trade agreement that the President is pushing is likely to make things worse for hundreds of thousands of Americans.
Millions are still shut out of the labor market.
Over the course of the past year, the unemployment rate has fallen from 6.1 percent to 5.5 percent. This is great news, but more than five years after the recession officially ended, 2.5 million workers have still been unemployed for 6 months or more. There are another 6.5 million workers, who are without work but not counted as unemployed because they have either have become so discouraged they have stopped looking or not searched in the last month.
With millions of Americans out of work, there is “slack” in the labor market, and this means there is little pressure on employer’s to increase wages. Many skilled workers are looking for a paycheck with not enough positions available, so employers do not need to increase wages to attract and retain employees. If the labor market was tighter, wages would grow as employers look to compete in order to attract talent and skills.
As we have reported before, unemployed workers are having a harder time getting back into the workforce than before the recession. The average unemployed person today will spend more than 30 weeks without a job—more than double the average length of unemployment before the Great Recession began. There are more than 2.5 million people in the United States who have been unemployed for more than six months.
For the vast majority of Americans, 30 weeks of unemployment is enough to leave them in financial ruin.
Fifty five percent of American households would burn through all of their liquid assets—checking and savings accounts as well as cash saved at home—in less than one month if their income was cut off.
Fifty five percent of American households would burn through all of their liquid assets—checking and savings accounts as well as cash saved at home—in less than one month if their income was cut off. A single bout of extended unemployment could mean losing their home, accumulating credit card debt to pay for food and other necessities, and selling valuables until there’s nothing left.
In late December of 2013, the extended unemployment compensation (EUC) program was allowed to expire, cutting off the 1.3 million unemployed people who were actively looking for jobs from benefits. In the months thereafter, more than 3.6 million Americans have been denied extended assistance, despite high long-term unemployment rates and clear evidence that the number of job-seekers far outnumbers available jobs. A year and a half after long-term unemployment aid expired, there is still no help for the 2.5 million people who have been actively looking for a job for six months or more. A new trade treaty, which could add to the loss of manufacturing jobs, would add new people to the nation’s jobless rolls and make it harder for all workers who have watched their jobs move offshore to find new employment.
When trade policies don’t protect jobs, people get hurt.
Last year, the Center for Effective Government began collecting stories from the long-term unemployed. We wanted to share their stories with decision-makers in Washington and the media to bring attention to the impact of high long-term unemployment on families and workers. Many of the stories we received were from workers, who felt like they had been abandoned and their skills were no longer useful.
Below are excerpts from some of the stories we heard from workers, whose jobs had been outsourced overseas:
From Tammie in Corydon, Indiana:
“I'm a 55 year old female with over 18 years of factory experience behind me, and the long hours 7 days a week and more than 12 hours a day have taken a toll on me. I know I will never see factory work and pay again, so I have lowered my sights quite a bit.”
From Yvonne in Riverdale, Illinois:
“Since I have been out of a job, I elected to go back to school to get my certificate in the field that I have worked in since 1994. I figured by going back to school I would become more marketable in the field that I've worked so long in […] It just gets under my skin that if we were big business owners, then we’d be getting tax breaks. Why do business owners get any type of tax break, when they are sending all the jobs overseas?”
From Liza in Dallas, Texas:
“I plead with my Republican representatives to hear the cries of the unemployed and understand that we want to work, we pray for jobs everyday - there just aren't enough jobs to fill the void of jobs going overseas and corporate downsizing.”
The workers we heard from ranged from factory workers to chemists to teachers. By failing to bring them back into the workforce, they are prevented from contributing to society, and we are wasting the years of institutional knowledge and experience these workers have to offer.
New trade agreements risk offshoring even more American jobs.
Americans are right to be skeptical of trade agreements. Past trade agreements have cost the United States thousands of jobs. The North American Free Trade Agreement (NAFTA) was supposed to create 200,000 American jobs, instead it displaced more than 850,000 jobs. Similarly, the U.S.-Korea Free Trade Agreement (KORUS) was supposed to create 70,000 jobs, instead 75,000 jobs were destroyed.
The Obama Administration is currently pushing for the additional authority to negotiate a new trade agreement, the Trans-Pacific Partnership (TPP). So called “fast track” authority would weaken Congress’ ability to shape the details of the trade deal, which would encourage trade with 11 other countries bordering the Pacific including Vietnam and Malaysia.
In addition to rolling back public health and safety protections (i.e. food standards), the TPP is unlikely to create any jobs on net. Trade impacts sectors differently. U.S. manufacturing will almost definitely take a hit from the trade deal, eliminating good-paying, stable union jobs. According to the Economic Policy Institute, “More than 5 million U.S. manufacturing jobs were lost between 1997 and 2014, and most of those job losses were due to growing trade deficits with countries that have negotiated trade and investment deals with the United States.”
Fast Track would make it easier to pass bad trade deals.
Last Friday, a Senate-passed bill came to the floor of the House of Representatives that would have given the President fast track authority and made the passage of the TPP much faster and less painful for representatives planning to vote for a trade agreement that would throw thousands of workers out of their jobs. The highly controversial package needed to be split into portions to have a chance of passing. Despite last minute arm-twisting by the Obama administration and Republicans, a crucial portion of the bill that would have provided short-term assistance to workers who lost their jobs as a result of the package was defeated by a vote of 126 to 302. Thankfully, representatives saw through the ploy and realized that a vote for short-term assistance was inadequate to offset the economic damage caused by a bad trade deal.
Trade Adjustment Assistance (TAA) has over the course of the last 40 years helped more than 2.2 million workers, who have lost their jobs due to international competition and trade, but as EPI’s figures show, this is less than half the people who lost their jobs from trade deficits in just the past 17 years. The program allows workers, groups of workers, unions, and American Job Center representatives to apply for assistance to help transition to a new career, find a new job, and supplement their income. TAA is set to expire on September 30, 2015. As a result, a TAA proposal has been attached to the fast track vote. The current proposal would provide 130 weeks of benefits to help workers, and the bill would provide some retroactive benefits to some 17,500 service workers who were previously denied benefits.
While the current proposal would provide much-needed assistance to workers, the program is both significantly underfunded and inadequate. The proposal provides $450 million for worker training, significantly less than the $575 million the administration previously estimated would be necessary to fully fund the program. Additionally, the proposal excludes public sector workers who lose their jobs due to trade.
Last Thursday, the House re-voted on the trade deal, removing entirely the short-term relief for those who will lose their jobs because of the deal. The measure passed by just ten votes, with 28 Democrats voting in favor and 50 Republicans opposing.
The Senate previously passed “fast-track” but their bill included displaced worker assistance as part of its legislation. It will now need to vote on the House package with worker protections stripped out. That vote is expected to happen on Tuesday.
If the Senate approves the bill, the trade agreement will still face an up and down vote. Legislators have promised two months to review the details of the treaty which will reshape the rules governing 40 percent of the world’s economy and give corporations broad new powers. It is important to have the voices of workers who have lost their jobs as a result of previous bad trade deals in the current debate.
Here are two ways you can help raise up workers’ voices:
- We want to hear your stories! If you (or a loved one) has seen your job outsourced, share your story here:
- Contact your representatives and tell them that the current fast track bill will hurt workers, by failing to provide assistance to workers whose jobs will be shipped overseas by the bad deal.
For Future Reading:
"No" to Fast Track – Secret, Undemocratic Trade Deals Are Not About Trade, The Fine Print, 6/3/2015
Honor Working People by Making Work Safer, The Fine Print, 4/28/2015
Six Charts Explain How Workers’ Compensation Is Deteriorating, The Fine Print, 3/30/2015