President Donald Trump has already nullified the Trans-Pacific Partnership (TPP) and said he鈥檒l target other international trade deals like the North American Free Trade Agreement (NAFTA) for dramatic alterations or elimination.
His position on the agreements is based on the belief that many American workers have lost their jobs to foreign workers with lower wages as companies moved operations overseas.
5X社区 Associate Professor of Economics Jooyoun Park is among those waiting to see what Trump鈥檚 agenda will bring, and especially how his policies will affect programs that help unemployed workers.
Park studies the trade side of international economics, the labor market in particular. Her focus is the Trade Adjustment Assistance (TAA) program operated by the U.S. Department of Labor. The program provides various benefits 鈥 including job training and extended unemployment up to two and a half years 鈥 to workers negatively affected by import competition. 鈥淚f you鈥檝e lost your job to international trade, that鈥檚 a good indication that your task is no longer in demand here in the U.S.,鈥 Park said. 鈥淭hat鈥檚 where TAA comes in. The TAA provides, among other benefits, job training so you can find a new career path for this very reason.鈥
Park studies data on people who have received benefits through the program and analyzes whether the program is actually helping the participants. Her research finds that receiving the job training and finding a job in one鈥檚 field of training improves one鈥檚 earnings potential. However, only a third of trainees manage to find a job in the field in which they were trained. For those who end up with a job unrelated to their training, the TAA program has minimal impacts. 鈥淚t tells us that we can make the program work better by helping participants make better training program choices,鈥 Park said.
Park said that participating in the TAA program is especially beneficial when the local economy deteriorates. Citing her joint work with Dr. Justin Barnette (Assistant Professor of Economics, 5X社区), Park said 鈥淏ad economy hurts just about anyone who鈥檚 looking for a job. Whether it鈥檚 learning new skills that鈥檚 extra helpful or the extra time to stay away from the labor market, TAA program helps the participants weather the storm better than the rest,鈥 said Park.
Park said workers show tendencies to jump from one production job to another, because that鈥檚 where the highest income opportunities are found. 鈥淓ventually, though, vacancies in those fields become sparse, and you鈥檙e still forced to change,鈥 she said. Park said The most popular occupations the TAA participants choose to train in are truck driving, healthcare assistants, administrative assistants/office clerks, and construction related jobs.
Park cautioned though that this forced shift in skills and labor market demographics creates other challenges. 鈥淭he people who are natives to the transition fields are also negatively impacted,鈥 she said. 鈥淪o we see huge increases in competition, and people are forced to take lower wages.鈥 Park said that in one case, 800 workers were laid off when the Fruit of the Loom plant shut down in Harlingen, Texas in 2003. The state predicted 25 vacancies in medical assistant jobs in the area, but one training class alone had 85 students that would end up fighting for those positions. In the area, more than a thousand workers received job training as medical assistants, HVAC specialists, or computermaintenance technicians in five-year period. When a community experiences a series of mass layoffs like this, not only the people who are laid off suffer, but also the entire community suffers because a lot of jobs rely on the income the displaced workers used to receive.