On December 9, TCF Senior Fellow Andrew Stettner submitted a public comment on the proposed rule for Trade Adjustment Assistance for Workers to Heidi Casta, deputy administrator in the Office of Policy Development and Research, U.S. Department of Labor, Employment and Training Administration. The comment is published below.
Dear Ms. Casta,
I am writing to comment on the proposed rule for Trade Adjustment Assistance for Workers published in the Federal Register on November 7, 2019 to 20 CFR Part 617 and 618 (Docket No. ETA-2019-0009). These comments are based on twenty years of work with unemployed and dislocated workers, the unions that represent them, and research done in consultation with stakeholders that has led to two extensive reports discussing the need to reform the TAA program.
Combined with other benefits, TAA is a lifeline for thousands of workers and their families while they are rebuilding their lives after a plant closure or other trade-related job loss. Between 2001 and 2017, the United States lost 3.4 million jobs due to the trade deficit with China alone, including 1.3 million jobs lost since 2008 (the first full year of the Great Recession). Since 2000, the TAA program has covered 2,619,136 workers. Research also shows that significant shares of displaced workers rely on multiple benefits (disability and retirement benefits, other government income assistance, and government medical benefits) in addition to temporary TAA.
I commend the Department of Labor for undertaking this long overdue formal rule-making for the Trade Adjustment Assistance program, which has changed markedly since the previous rules were promulgated. It is disappointing to advocates for the unemployed that the proposal incorporates the administration’s misguided initiatives to end the use of merit staffing for administration and to promote so-called industry recognized apprenticeships. Just as advocates were concerned with promulgated rules advocating these changes as they affect unemployment insurance (UI) and apprenticeship, advocates are deeply concerned that the department is abandoning its responsibility to ensure fairness, effectiveness, and equal opportunity through these deregulatory changes.
Nonetheless, the rule addresses some of the key themes of my research—the need to modernize certification rules to cover a greater share of dislocated workers; the need to bolster all the different aspects of TAA, including relocation allowances and wage insurance (not just training); and, critically, the need to ensure that when workers enter into retraining, it leads them to stable family supporting employment. The thrust of the department’s rule-making is welcome as it seeks to improve rather than to dismantle the Trade Adjustment Assistance program and fulfill the promise that TAA should offer to trade-impacted workers.
While strengthening the rule is critically important, there is more to be done to make TAA more effective. It’s time to consider whether the robust package of benefits offered by TAA ought to be applied to workers and communities impacted by other major economic transformations, such as automation. Moreover, rules regarding Trade Readjustment Allowances should match this rule’s emphasis on services other than training, with workers being able to utilize Trade Readjustment Allowance (TRA) payments, if they opt for other employment strategies. And, communities with the largest trade impacts need additional economic and workforce development tools than those afforded by the current TAA law.
The Proposed Rule Makes a Number of Welcome Changes to TAA
I commend various parts of the proposed proposal and appreciate the department’s recognition of the need to modernize certification standards and meet the diverse needs of trade-impacted workers:
- Modernizing the definition of articles and establishments to recognize the vulnerability of producers of intangible goods and services to trade, in addition to individual factory closings (618.110). As sectors across the economy, including manufacturing, become more digitized, it’s past time for workers to be protected when globalization of production of intangible goods and services leads to job losses.
- Expanding TAA to cover those involved in a lockout under the definition of lack of work even when their state UI law does not (618.110). Those who are locked out of their job due to a strike are clearly unemployed through no fault of their own.
- Codifying that part-time workers can receive wage insurance (reemployment trade adjustment assistance or RTAA) if they are receiving TAA training and working at least twenty hours per week (618.505). This provision will allow workers who are balancing work and education to receive help from the TAA program.
- Allowing communities to use TAA benefits to create new training programs, such as adult basic education and ESL, that are not provided by local institutions (618.605). Because TAA training operates as a voucher to workers, communities do not typically have the tools to design new training to meet critical unmet needs, such as remedial training.
- Allowing full $1,250 of a job search allowance to be paid as a lump sum (618.355). The amount of resources offered by TAA to those looking to relocate is minimal. One way to make them more effective is to allow it to be paid out as a lump sum.
- Clarifying that states need to make employment and case management services available to all trade-affected workers who are considering training, in training, or who have completed training (618.630). Continued employment and case management helps workers succeed in training and address or respond to challenges—like difficulty accessing transportation services—that could impact their ability to complete training programs.
618.610 and 618.335—Avoid the addition of barriers to access to training
In developing new standards for assessments and referral to employment services, the department should be careful not to erect unintentional barriers to occupational training. Certainly, not all trade-impacted workers need to enter training to find suitable employment, and TAA should not be a one-size-fits-all program. And, the new requirement that trade-impacted workers receive an individualized employment plan could lead to improvements in their case management. However, there are ways that this provision is constructed that could erect barriers to access needed retraining. Training is a key part of the promise made by TAA to trade-impacted workers, and access to training in TAA should remain streamlined.
Section of 618.335 requires states to do an initial assessment of a trade-impacted worker and determine whether they are able to find suitable employment with their current skills or not, before moving to a comprehensive assessment and enrollment in TAA approved training. The rule states that if a worker disagrees with the initial assessment, they can request a comprehensive assessment. We have several suggestions to improve this procedure:
- Respect the right of trade-impacted workers to training. As part of a request for a comprehensive assessment, trade-impacted workers should be given the option to present information that their desired training could lead to better employment outcomes than other suitable employment choices, in terms of wages, employment stability, and well-being. If the initial assessment does not point to training, workers should always be given the opportunity to make the case for training as part of the next assessment.
- Consider the length of job search. The rule lists several factors to be considered in the initial assessment, including skills and local labor market conditions. The state should also consider the length and quality of a worker’s job search, such as whether, if by the time a worker applies for TAA services, they have been searching for work and have been rejected from jobs that appear suitable on paper. For example, DOL could direct states to consider unsuccessful search of thirteen weeks or more as a reason to consider an immediate referral to comprehensive assessment and training.
- Consider employment stability. The definition of suitable work proposed in 618.610 presents challenges. While the definition excludes temporary work, this is insufficient in the case of trade-impacted workers. For example, a worker laid off from a textile mill could find employment in another textile mill, but this also could be closed as well due to trade pressures. Work should only be considered suitable if it pays a decent wage, is reasonably fitted to worker’s skills, and shows potential for long-lasting employment.
- Establish timeliness standards. A trade-impacted worker’s entitlement to TRA payments is reduced by each week they are on UI and going through an assessment. A comprehensive assessment should take no longer than ten business days to complete.
- Give workers the option to reject diagnostic testing. A trade-impacted worker should not be required to complete diagnostic testing before being placed into training, as it may disincentivize workers from continuing in the process and can often fail to appreciate latent skills and abilities among experienced workers.
- State goals explicitly. The department should add language explicitly stating that alignment with the Workforce Innovation and Opportunity Act (WIOA) initial and comprehensive assessment process is meant to increase alignment and decrease duplication of work for staff and not to serve as a barrier to accessing training.
By directing some claimants away from training because they have marketable skills, the department will be denying them TRA benefits. Under the 2009 reauthorization of TAA, workers with marketable skills would be able to benefit from income support from additional weeks of TRA payments beyond the normal UI entitlement, through a waiver from the training requirement. Under current law, such workers could not benefit under the approach outlined in this rule and under the current statute, which eliminate this waiver reason. Without the marketable skills waiver, there is an underlying unfairness of the approach of directing TAA eligible workers to search for suitable employment with current skills that states have deemed to be marketable, but causing these workers to lose out on TRA benefits.
618.635—New provision to encourage TAA recipients to enter into apprenticeship training should be limited to registered apprenticeships
The rule proposes significant financial support for employers—easily $35,000 per participant. It is most concerning that the rule would allow employers offering any kind of paid work-based learning that results in a “recognized post-secondary credential, which includes an industry recognized credential.” A wide range of programs could fit under this loose legal definition, lacking the distinctive features that have made registered apprenticeships such an effective mechanism for training. Registered apprenticeships are overseen by the Department of Labor, must comply with strict reporting requirements, and meet criteria related to job quality. Registered apprenticeships require progressive wage increases alongside skills acquired, including progression to an experienced journey worker in line for permanent employment. Moreover, registered apprenticeships must comply with equal opportunity protections that ensure access to women and people of color to these career pathways. There are over 730,000 postsecondary and secondary credentials in the United States and having one of these as an end goal of a paid work-based training program is not enough to measure up to the standards outlined by the Apprenticeship Act.
Using innovative methods to get more trade-impacted workers into apprenticeships is a worthwhile goal. Historically, participation in apprenticeship training among TAA recipients has been very low, as little as 0.1 percent in calendar year 2018. While other state and federal programs have used financial incentives such as tax credits to encourage expansions to apprenticeships, the amount has not been nearly as large as what is proposed in the rule ($1,000 to $5,000 per apprentice). To be aligned with other policies, support to apprenticeships should be limited to a smaller amount, such as 25 percent of wages, with a larger 50 percent subsidy limited to those workers who are traditionally not allowed into apprenticeships, such as women and older workers.
618.890—TAA is an essentially governmental function, and merit staffing is the best way to provide consistent, efficient, and accountable administration of the TAA program
TAA is a federal entitlement, and state merit staff are in the best position to ensure that workers receive their legally entitled services. In 2010, the Department of Labor emphasized the role of states in the TAA program as an arm of the federal government:
The states provide benefits and services in the TAA program as agents of the United States. Each state does so through one or more state agencies designated as the CSA(s) [cooperating state agency/agencies] in a Governor-Secretary Agreement between the state’s Governor and the United States Secretary of Labor (Secretary)…. The state personnel working in the TAA program make complex determinations about the newly expanded federally-funded services and benefits which workers covered by TAA certifications may receive. Many of the benefits available under the TAA program are entitlements for eligible workers. As in other DOL programs involving entitlements, benefit decisions must be made by merit staffed state employees. State personnel serving under a merit system are unbiased, nonpartisan public servants who are directly accountable to government entities. The standards for their performance and their determinations on the use of public funds require that decisions be made in the best interest of the public and of the population to be served. By requiring merit staffing, the Department seeks to ensure that benefit decisions and services are provided in the most consistent, efficient, accountable, and transparent way.
This description makes TAA much more similar to Unemployment Insurance and the Employment Service program (both requiring merit staffing) than to WIOA programs. As the Department of Labor pointed out in 2010, states and the federal government have a grantor–grantee relationship, which gives state flexibility and authority over the contours of their program. Under TAA, states operate as an agent of the federal government to uphold an entitlement. The localities operating TAA and their contractors may target certain sectors and employment strategies to meet performance-based contracts and the preferences of local workforce investment boards. These goals may run counter to the best interest of serving TAA workers, who often come from high-wage jobs and need more extensive retraining than what is offered under WIOA to earn a comparable wage.
TAA administration is a state function, and merit staffing versus local delivery provides the most efficient delivery of services. Unlike WIOA services, which serve a broad swath of the public, TAA services are triggered by certifications in specific sub-state geographic areas. A layoff event certified by TAA could trigger significant number of workers needing benefits in a geographic area that has little or no experience with TAA services. The danger is this is that local service areas will apply WIOA’s more restrictive rules to approving training, or a tendency within WIOA to direct workers to relatively short training programs, to the TAA population. Merit staffing allow states to surge state workers trained in the unique rules of the program to areas impacted by TAA layoffs, rather than having to rely on cross-training local staff who may only episodically use such knowledge. Federal law requires a minimum of 5 percent of state allocations to be used for case management, and this translates into seventeen states having as little as $75,000 in FY2019 reserved for case management. Splicing these dollars into local areas is impractical.
Merit staffing has been required for the delivery of TAA services since 2010 and in agreements between state governors and the secretary of labor from 1975 to 2005. Nothing has changed in Section 239 of the law in the multiple reauthorizations of the (2012 and 2015) that outlines the requirements for agreements between the secretary of labor and the states. Indeed, states retain the flexibility to allocate as much as 15 percent of their TAA allocation to case management and administration (no more than 10 percent), which should allow them to deploy—and when necessary, hire—additional state staff to deliver the services to which TAA workers are entitled.
Moreover, the proposed rule would require states to co-enroll all TAA workers into the WIOA program. If there are enhanced employment services or job placement programs not provided by merit-staffed employees, WIOA co-enrollment will allow TAA eligible workers to be referred for such services, which could be paid for by WIOA dollars. Current TAA rules already require program coordination with WIOA—most states have fully integrated the TAA program into their one-stop operations, recognizing this integration as a best practice. These states continue to use TAA funding for case management services performed by state merit-based ES staff. This integral relationship between the TAA and ES programs makes a very strong case that TAA staff should remain state merit system employees. TAA merit staff can adapt to the more detailed co-enrollment requirement outlined in the proposal.
Merit staffing provides clear lines of accountability for workers looking to secure their rights to the TAA entitlement. Impacted workers concerned with the decision of merit staffed workers can raise their concerns with state officials who have direct control over front-line workers in charge of implementing the TAA program. WIOA providers are one step removed from state government, and are not accustomed to processing worker appeals related to an entitlement to services. From the worker perspective, TAA recipients concerned with the delivery of services will have difficulty knowing whether they should raise their concerns with the service provider delivering case management services or with state agency officials. Also, because WIOA is a grant funded program, service providers have far greater discretion in choosing which workers, for example, to grant an individual training voucher. This distinction is another reason that merit-staffed employees are preferable for both benefit determination and for delivery of case management services.
In the shift to non-merit staff, the Department of Labor estimates an annual cost savings of $564,257 and a total cost savings over a ten-year period of $3,963,105. However, the analysis inaccurately assumes higher public-sector compensation compared with the private sector—contradicting the actual experiences of multiple states and recent research. Failed privatization schemes in Indiana and Texas resulted in huge cost overruns and blocked benefits for thousands of people. A recent Economic Policy Institute analysis revealed that state and local government employees earn less than similar private-sector workers; the wage and compensation gap is larger in right-to-work states.
618.325—WIOA co-enrollment should only occur when it is done for the benefit of trade-impacted workers
There are benefits to co-enrolling trade-impacted workers into WIOA services, to give trade-impacted workers additional access to intensive employment services and (resources allowing) supportive services such as childcare. Still, as the rule acknowledges, by giving workers the right to refuse co-enrollment, co-enrollment won’t always be necessary if workers do not have a need for WIOA services. The rule should provide more guidance to states than simply affording the worker the choice to opt-out of WIOA services. Instead, workers should be notified what additional services, related to their initial assessment or individualized employment plan, can be delivered best through WIOA co-enrollment and any additional requirements and reporting that they would be required to engage in before deciding whether to co-enroll.
618.310—States should more actively promote Reemployment Trade Adjustment Assistance (RTAA) wage insurance, when it notifies trade-impacted workers of services
Section 618.310 includes a long list of services that states must notify workers about. Reemployment Trade Adjustment Assistance (RTAA) is not included on the list. Usage of RTAA is still lagging compared to training services, as less than one in five TAA recipients use RTAA. This comes despite the fact that 70 percent of displaced workers must take a pay cut to get back to work. It is critical for states to aggressively market RTAA at the front end with trade-impacted workers, as wage insurance is particularly valuable to those trade-impacted workers who pursue employment on their own and won’t be in regular contact with state staff. This upfront information should explain how RTAA can supplement earnings and outline the steps that workers should take to access these benefits if they become reemployed.
618.610—States should consider additional factors when considering whether to approve a training that takes longer than the length of TRA benefits
Section 618.610 outlines that states can approve TAA training programs even if they last longer than the trade-impacted worker’s eligibility for TRA benefits, if they can demonstrate that they have an alternative means to financially support themselves in order to complete training. Several additional factors beyond those mentioned (financial aid and federal work study) should be considered. States should consider whether TAA recipients could access other means tested benefits, such as food stamps or TANF, and if they would be more likely to be able to gain part-time employment with skills gained along the way to their desired educational credential. For example, a TAA recipient pursuing an engineering degree might be able to gain part-time employment even before earning their credential and use those wages to support the completion of their education program. Many college student financial aid packages are front-loaded toward their early years, with an expectation that students will work toward the end of their education. Such an interpretation would give states leeway to approve trade-impacted workers for four-year college programs, which have a strong potential to lead to long lasting employment if the trade-impacted worker is equipped to finish them.
618.615—Workers approved for WIOA training should also be approved for TAA training
There are cases when a trade-impacted worker might start a WIOA approved training before their establishment is certified as eligible for TAA. Since WIOA training is more limited than TAA training, it tends to utilize a stricter criterion than TAA, such as the requirement that training is geared toward demand occupations (while TAA only requires that there are reasonable employment opportunities). Because the WIOA definition is more narrow, it makes sense that workers already approved for WIOA dislocated worker training be able to move into TAA automatically after their plant becomes certified. Such a seamless transition would allow trade-impacted workers to quickly gain access to income support from trade readjustment allowances.
618.205—U.S. International Trade Commission notifications should be expanded
Section 205 proposes that the Department of Labor engage in proactive notification of U.S. International Trade Commission cases to impacted parties. This notification would be more effective if it also included notifying leading states of that detailed industry’s employment in addition to industry associations.
618.515—Allow for quarterly verification of RTAA
The monthly verification procedure for RTAA could cause significant administrative challenges. It’s neither weekly like UI, nor quarterly like wage records. By allowing states to check wages quarterly, RTAA verification could largely occur in an automated fashion. When UI wage records don’t confirm eligibility, RTAA recipients could be contacted.
Sincerely,
Andrew Stettner
Senior Fellow
Tags: labor, trade adjustment assistance
Getting Trade Adjustment Assistance Reform Right
On December 9, TCF Senior Fellow Andrew Stettner submitted a public comment on the proposed rule for Trade Adjustment Assistance for Workers to Heidi Casta, deputy administrator in the Office of Policy Development and Research, U.S. Department of Labor, Employment and Training Administration. The comment is published below.
Dear Ms. Casta,
I am writing to comment on the proposed rule for Trade Adjustment Assistance for Workers published in the Federal Register on November 7, 2019 to 20 CFR Part 617 and 618 (Docket No. ETA-2019-0009).1 These comments are based on twenty years of work with unemployed and dislocated workers, the unions that represent them, and research done in consultation with stakeholders that has led to two extensive reports discussing the need to reform the TAA program.2
Combined with other benefits, TAA is a lifeline for thousands of workers and their families while they are rebuilding their lives after a plant closure or other trade-related job loss. Between 2001 and 2017, the United States lost 3.4 million jobs due to the trade deficit with China alone, including 1.3 million jobs lost since 2008 (the first full year of the Great Recession).4 Since 2000, the TAA program has covered 2,619,136 workers.5 Research also shows that significant shares of displaced workers rely on multiple benefits (disability and retirement benefits, other government income assistance, and government medical benefits) in addition to temporary TAA.6
I commend the Department of Labor for undertaking this long overdue formal rule-making for the Trade Adjustment Assistance program, which has changed markedly since the previous rules were promulgated. It is disappointing to advocates for the unemployed that the proposal incorporates the administration’s misguided initiatives to end the use of merit staffing for administration and to promote so-called industry recognized apprenticeships.7 Just as advocates were concerned with promulgated rules advocating these changes as they affect unemployment insurance (UI) and apprenticeship, advocates are deeply concerned that the department is abandoning its responsibility to ensure fairness, effectiveness, and equal opportunity through these deregulatory changes.
Nonetheless, the rule addresses some of the key themes of my research—the need to modernize certification rules to cover a greater share of dislocated workers; the need to bolster all the different aspects of TAA, including relocation allowances and wage insurance (not just training); and, critically, the need to ensure that when workers enter into retraining, it leads them to stable family supporting employment. The thrust of the department’s rule-making is welcome as it seeks to improve rather than to dismantle the Trade Adjustment Assistance program and fulfill the promise that TAA should offer to trade-impacted workers.
While strengthening the rule is critically important, there is more to be done to make TAA more effective. It’s time to consider whether the robust package of benefits offered by TAA ought to be applied to workers and communities impacted by other major economic transformations, such as automation. Moreover, rules regarding Trade Readjustment Allowances should match this rule’s emphasis on services other than training, with workers being able to utilize Trade Readjustment Allowance (TRA) payments, if they opt for other employment strategies. And, communities with the largest trade impacts need additional economic and workforce development tools than those afforded by the current TAA law.
The Proposed Rule Makes a Number of Welcome Changes to TAA
I commend various parts of the proposed proposal and appreciate the department’s recognition of the need to modernize certification standards and meet the diverse needs of trade-impacted workers:
618.610 and 618.335—Avoid the addition of barriers to access to training
In developing new standards for assessments and referral to employment services, the department should be careful not to erect unintentional barriers to occupational training. Certainly, not all trade-impacted workers need to enter training to find suitable employment, and TAA should not be a one-size-fits-all program. And, the new requirement that trade-impacted workers receive an individualized employment plan could lead to improvements in their case management. However, there are ways that this provision is constructed that could erect barriers to access needed retraining. Training is a key part of the promise made by TAA to trade-impacted workers, and access to training in TAA should remain streamlined.
Section of 618.335 requires states to do an initial assessment of a trade-impacted worker and determine whether they are able to find suitable employment with their current skills or not, before moving to a comprehensive assessment and enrollment in TAA approved training. The rule states that if a worker disagrees with the initial assessment, they can request a comprehensive assessment. We have several suggestions to improve this procedure:
By directing some claimants away from training because they have marketable skills, the department will be denying them TRA benefits. Under the 2009 reauthorization of TAA, workers with marketable skills would be able to benefit from income support from additional weeks of TRA payments beyond the normal UI entitlement, through a waiver from the training requirement. Under current law, such workers could not benefit under the approach outlined in this rule and under the current statute, which eliminate this waiver reason. Without the marketable skills waiver, there is an underlying unfairness of the approach of directing TAA eligible workers to search for suitable employment with current skills that states have deemed to be marketable, but causing these workers to lose out on TRA benefits.
618.635—New provision to encourage TAA recipients to enter into apprenticeship training should be limited to registered apprenticeships
The rule proposes significant financial support for employers—easily $35,000 per participant.8 It is most concerning that the rule would allow employers offering any kind of paid work-based learning that results in a “recognized post-secondary credential, which includes an industry recognized credential.” A wide range of programs could fit under this loose legal definition, lacking the distinctive features that have made registered apprenticeships such an effective mechanism for training. Registered apprenticeships are overseen by the Department of Labor, must comply with strict reporting requirements, and meet criteria related to job quality. Registered apprenticeships require progressive wage increases alongside skills acquired, including progression to an experienced journey worker in line for permanent employment. Moreover, registered apprenticeships must comply with equal opportunity protections that ensure access to women and people of color to these career pathways. There are over 730,000 postsecondary and secondary credentials in the United States and having one of these as an end goal of a paid work-based training program is not enough to measure up to the standards outlined by the Apprenticeship Act.9
Using innovative methods to get more trade-impacted workers into apprenticeships is a worthwhile goal. Historically, participation in apprenticeship training among TAA recipients has been very low, as little as 0.1 percent in calendar year 2018.10 While other state and federal programs have used financial incentives such as tax credits to encourage expansions to apprenticeships, the amount has not been nearly as large as what is proposed in the rule ($1,000 to $5,000 per apprentice).11 To be aligned with other policies, support to apprenticeships should be limited to a smaller amount, such as 25 percent of wages, with a larger 50 percent subsidy limited to those workers who are traditionally not allowed into apprenticeships, such as women and older workers.
618.890—TAA is an essentially governmental function, and merit staffing is the best way to provide consistent, efficient, and accountable administration of the TAA program
TAA is a federal entitlement, and state merit staff are in the best position to ensure that workers receive their legally entitled services. In 2010, the Department of Labor emphasized the role of states in the TAA program as an arm of the federal government:
The states provide benefits and services in the TAA program as agents of the United States. Each state does so through one or more state agencies designated as the CSA(s) [cooperating state agency/agencies] in a Governor-Secretary Agreement between the state’s Governor and the United States Secretary of Labor (Secretary)…. The state personnel working in the TAA program make complex determinations about the newly expanded federally-funded services and benefits which workers covered by TAA certifications may receive. Many of the benefits available under the TAA program are entitlements for eligible workers. As in other DOL programs involving entitlements, benefit decisions must be made by merit staffed state employees. State personnel serving under a merit system are unbiased, nonpartisan public servants who are directly accountable to government entities. The standards for their performance and their determinations on the use of public funds require that decisions be made in the best interest of the public and of the population to be served. By requiring merit staffing, the Department seeks to ensure that benefit decisions and services are provided in the most consistent, efficient, accountable, and transparent way.12
This description makes TAA much more similar to Unemployment Insurance and the Employment Service program (both requiring merit staffing) than to WIOA programs. As the Department of Labor pointed out in 2010, states and the federal government have a grantor–grantee relationship, which gives state flexibility and authority over the contours of their program. Under TAA, states operate as an agent of the federal government to uphold an entitlement. The localities operating TAA and their contractors may target certain sectors and employment strategies to meet performance-based contracts and the preferences of local workforce investment boards. These goals may run counter to the best interest of serving TAA workers, who often come from high-wage jobs and need more extensive retraining than what is offered under WIOA to earn a comparable wage.
TAA administration is a state function, and merit staffing versus local delivery provides the most efficient delivery of services. Unlike WIOA services, which serve a broad swath of the public, TAA services are triggered by certifications in specific sub-state geographic areas. A layoff event certified by TAA could trigger significant number of workers needing benefits in a geographic area that has little or no experience with TAA services. The danger is this is that local service areas will apply WIOA’s more restrictive rules to approving training, or a tendency within WIOA to direct workers to relatively short training programs, to the TAA population. Merit staffing allow states to surge state workers trained in the unique rules of the program to areas impacted by TAA layoffs, rather than having to rely on cross-training local staff who may only episodically use such knowledge. Federal law requires a minimum of 5 percent of state allocations to be used for case management, and this translates into seventeen states having as little as $75,000 in FY2019 reserved for case management. Splicing these dollars into local areas is impractical.13
Merit staffing has been required for the delivery of TAA services since 2010 and in agreements between state governors and the secretary of labor from 1975 to 2005. Nothing has changed in Section 239 of the law in the multiple reauthorizations of the (2012 and 2015) that outlines the requirements for agreements between the secretary of labor and the states. Indeed, states retain the flexibility to allocate as much as 15 percent of their TAA allocation to case management and administration (no more than 10 percent), which should allow them to deploy—and when necessary, hire—additional state staff to deliver the services to which TAA workers are entitled.
Moreover, the proposed rule would require states to co-enroll all TAA workers into the WIOA program. If there are enhanced employment services or job placement programs not provided by merit-staffed employees, WIOA co-enrollment will allow TAA eligible workers to be referred for such services, which could be paid for by WIOA dollars. Current TAA rules already require program coordination with WIOA—most states have fully integrated the TAA program into their one-stop operations, recognizing this integration as a best practice. These states continue to use TAA funding for case management services performed by state merit-based ES staff. This integral relationship between the TAA and ES programs makes a very strong case that TAA staff should remain state merit system employees. TAA merit staff can adapt to the more detailed co-enrollment requirement outlined in the proposal.
Merit staffing provides clear lines of accountability for workers looking to secure their rights to the TAA entitlement. Impacted workers concerned with the decision of merit staffed workers can raise their concerns with state officials who have direct control over front-line workers in charge of implementing the TAA program. WIOA providers are one step removed from state government, and are not accustomed to processing worker appeals related to an entitlement to services. From the worker perspective, TAA recipients concerned with the delivery of services will have difficulty knowing whether they should raise their concerns with the service provider delivering case management services or with state agency officials. Also, because WIOA is a grant funded program, service providers have far greater discretion in choosing which workers, for example, to grant an individual training voucher. This distinction is another reason that merit-staffed employees are preferable for both benefit determination and for delivery of case management services.
In the shift to non-merit staff, the Department of Labor estimates an annual cost savings of $564,257 and a total cost savings over a ten-year period of $3,963,105. However, the analysis inaccurately assumes higher public-sector compensation compared with the private sector—contradicting the actual experiences of multiple states and recent research. Failed privatization schemes in Indiana and Texas resulted in huge cost overruns and blocked benefits for thousands of people. A recent Economic Policy Institute analysis revealed that state and local government employees earn less than similar private-sector workers; the wage and compensation gap is larger in right-to-work states.14
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618.325—WIOA co-enrollment should only occur when it is done for the benefit of trade-impacted workers
There are benefits to co-enrolling trade-impacted workers into WIOA services, to give trade-impacted workers additional access to intensive employment services and (resources allowing) supportive services such as childcare. Still, as the rule acknowledges, by giving workers the right to refuse co-enrollment, co-enrollment won’t always be necessary if workers do not have a need for WIOA services. The rule should provide more guidance to states than simply affording the worker the choice to opt-out of WIOA services. Instead, workers should be notified what additional services, related to their initial assessment or individualized employment plan, can be delivered best through WIOA co-enrollment and any additional requirements and reporting that they would be required to engage in before deciding whether to co-enroll.
618.310—States should more actively promote Reemployment Trade Adjustment Assistance (RTAA) wage insurance, when it notifies trade-impacted workers of services
Section 618.310 includes a long list of services that states must notify workers about. Reemployment Trade Adjustment Assistance (RTAA) is not included on the list. Usage of RTAA is still lagging compared to training services, as less than one in five TAA recipients use RTAA.15 This comes despite the fact that 70 percent of displaced workers must take a pay cut to get back to work. It is critical for states to aggressively market RTAA at the front end with trade-impacted workers, as wage insurance is particularly valuable to those trade-impacted workers who pursue employment on their own and won’t be in regular contact with state staff. This upfront information should explain how RTAA can supplement earnings and outline the steps that workers should take to access these benefits if they become reemployed.
618.610—States should consider additional factors when considering whether to approve a training that takes longer than the length of TRA benefits
Section 618.610 outlines that states can approve TAA training programs even if they last longer than the trade-impacted worker’s eligibility for TRA benefits, if they can demonstrate that they have an alternative means to financially support themselves in order to complete training. Several additional factors beyond those mentioned (financial aid and federal work study) should be considered. States should consider whether TAA recipients could access other means tested benefits, such as food stamps or TANF, and if they would be more likely to be able to gain part-time employment with skills gained along the way to their desired educational credential. For example, a TAA recipient pursuing an engineering degree might be able to gain part-time employment even before earning their credential and use those wages to support the completion of their education program. Many college student financial aid packages are front-loaded toward their early years, with an expectation that students will work toward the end of their education. Such an interpretation would give states leeway to approve trade-impacted workers for four-year college programs, which have a strong potential to lead to long lasting employment if the trade-impacted worker is equipped to finish them.
618.615—Workers approved for WIOA training should also be approved for TAA training
There are cases when a trade-impacted worker might start a WIOA approved training before their establishment is certified as eligible for TAA. Since WIOA training is more limited than TAA training, it tends to utilize a stricter criterion than TAA, such as the requirement that training is geared toward demand occupations (while TAA only requires that there are reasonable employment opportunities). Because the WIOA definition is more narrow, it makes sense that workers already approved for WIOA dislocated worker training be able to move into TAA automatically after their plant becomes certified. Such a seamless transition would allow trade-impacted workers to quickly gain access to income support from trade readjustment allowances.
618.205—U.S. International Trade Commission notifications should be expanded
Section 205 proposes that the Department of Labor engage in proactive notification of U.S. International Trade Commission cases to impacted parties. This notification would be more effective if it also included notifying leading states of that detailed industry’s employment in addition to industry associations.
618.515—Allow for quarterly verification of RTAA
The monthly verification procedure for RTAA could cause significant administrative challenges. It’s neither weekly like UI, nor quarterly like wage records. By allowing states to check wages quarterly, RTAA verification could largely occur in an automated fashion. When UI wage records don’t confirm eligibility, RTAA recipients could be contacted.
Sincerely,
Andrew Stettner
Senior Fellow
Notes
Tags: labor, trade adjustment assistance