In December 2009, Bristol Myers Squib, a biopharmaceutical company with international operations, told employees at two Indiana plants that 75 to 100 of them would need to seek other work. In February 2010, HSBC, the British financial firm that bills itself as the “world’s local bank,” laid off 20 full-time customer service representatives who processed loan modifications in a Kentucky town named, ironically enough, London. Some 125 workers who built and assembled truck cabs for 18 wheelers at Mayflower Vehicle Systems in Norwalk, Ohio, saw their workplace shut its doors in April 2010.
A few hundred layoffs in a labor market that’s routinely shed tens of thousands of jobs or more each month over the past two years is hardly surprising. But HSBC, Bristol Myers Squib and Mayflower Vehicle Systems didn’t reduce their workforce — those jobs are still being done, but in places like India, France, and Mexico. And while manufacturing jobs have always been vulnerable to foreign competition, increasingly, white collar and service industry workers are facing the same pressures as large multinational firms and small businesses alike improve their bottom lines by shifting jobs overseas.
This trend would be easier to understand and document were a remarkable set of public government documents and data actually available to the public.
Workers who lose their jobs due to foreign competition are eligible for additional unemployment and retraining expenses from a Labor Department program created in 1974 called Trade Adjustment Assistance (TAA). The program was originally envisioned as a means of transitioning Americans who worked for industries hard hit by foreign competition–shoes, garments and electronics–to acquire new skills to work in new markets. The program has been expanded to aid white collar and service workers who’ve lost their jobs to foreign competition.
Workers apply for the benefits by filing a petition with Labor’s Employment and Training Administration. The Federal Register publishes lists of petitions received for benefits under the act, adding that the documents are “available for inspection at the Office of the Director, Division of Trade Adjustment Assistance, Employment and Training Administration,” followed by the address of the Labor Department’s Washington, D.C. headquarters, known as the Frances Perkins Building, and a room number, N-5428.
Yet when we initially tried to review those documents, we weren’t allowed anywhere near room N-5428. In fact, we weren’t even let into the building. We were told to file Freedom of Information Act request for the petitions we wished to review, which we did. The copies of the documents we received–public documents available for inspection–had information redacted from them, including contact information for workers applying for the assistance.
The Labor Department’s Web site has a TAA search page where users can search petitions by company name, by city and state, and by SIC code. Users can find basic information on new petitions, determinations of petitions that have been approved (or certified, in the Web site’s language) or denied, but the results don’t include crucial information of how many workers have been affected by foreign trade. Results can’t be downloaded and can only be viewed twenty at a time on the Web page, making it difficult to use the information in any meaningful way. Crucial information from the paper petitions filed with the Employment and Training Administration–which are supposed to be available for public inspection–is omitted.
The documents tell us that software support and customer service employees of IBM reported they lost their jobs when the computer giant “transferred all the customer service jobs to Daksh, India.” Forty technical analysts from Bank of America, a beneficiary of funds under the Troubled Asset Relief program, claim their jobs were shipped to Costa Rica. White collar workers in a Fort Worth, Texas, office of J.P. Morgan Chase, another recipient of TARP funds, told the Labor Department that their jobs had been outsourced to India. “Employees from Chase [Fort Worth] were sent to train new hires in India and new hires were sent to Chase [Fort Worth] to be trained,” a petition reads. Warner Music Group fired about 50 IT workers including system/network/database administrators, engineers, analysts and computer operators after it outsourced their jobs to HCL, also in India. Several hundred risk-fraud analysts who worked for American Express in their Salt Lake City office lost their jobs when they were outsourced to a foreign country.
In 2009, the first year that service and white collar workers became eligible for Trade Adjustment Assistance, the number of petitions filed doubled to 4,549 petitions compared to 2,224 petitions received in 2008.
That’s not to say that manufacturing workers aren’t also filing for benefits. Danaher Tool Group laid off about two dozen workers who made hand tools at its West Hartford, Conn., facility in December 2009 due to import competition. GE Transportation laid off more than 20 workers from Emporium, Pa., in October 2009 because railroads ordered cheaper foreign made parts. Suntron Corporation, a contract manufacturer of PC board assemblies, laid off 200 workers when it closed its Newbert, Ore., plant at the end March 2010 to shift production to Tijuana, Mexico.
According to a December 2009 report to the Senate Finance and House Ways and Means Committee, there were 201,053 workers certified with 1,845 petitions approved. The manufacturing industry had 183,227 TAA certified or approved workers who applied through 1,620 petitions. In 2008, there were 126,633 workers covered under the 1,437 approved petitions, down from 2007 where 1,449 TAA certifications covered 146,983 workers.
Currently, workers in firms that supply services, shift production to any country and those who produce component parts for imported finished products are eligible for TAA benefits. In addition, workers who lose jobs at firms that supplied services to companies with TAA-certified workers or firms identified in an International Trade Commission injury determination are also able to receive TAA benefits. Some pubic agency employees are eligible as well. The American Recovery and Reinvestment Act, signed by President Barack Obama in February 2009, increased the upper limit for spending on job training to $575 million per year for 2009 and 2010, up from $220 million in 2008. The initial allocations for 2010 is $446 million, with Michigan receiving the largest training fund of $44 million, followed by North Carolina with $37 million. The largest funding is allocated to states who had the highest numbers of certified workers in the previous year.
The new criteria for TAA allows for workers to enroll in training 26 weeks after certification or layoff, after which the Trade Readjustment Allowances (TRA) gives up to 130 weeks of cash payments for workers enrolled in full-time training and up to 156 weeks of cash payments if the workers were also enrolled in remedial training. The expanded coverage also provides 100% job search allowance of a maximum $1500 and relocation allowances with a lump sum of up to $1500. It also extends cash payments by 26 weeks to 130 weeks for workers getting full-time training. The TAA program covers 80 percent of a worker’s monthly health insurance premium. If workers are older than 50, they dont’t have a deadline for reemployment and get a maximum benefit of $12,000 over a period of two years.