Congress is finally looking to correct a major flaw in our trade adjustment assistance program, according to a story in today's Washington Post - Aid May Grow for Laid-Off Workers:
Under a Senate bill to be introduced today, computer programmers, call-center staffers and other service-sector workers who make up the vast majority of the nation's workforce would for the first time be eligible for a generous package of income, health and retraining benefits currently reserved for manufacturing workers who lose their jobs to international trade.
This is long overdue. The problem stems from the original belief that services, unlike goods, could not be traded over international boundaries. That belief by economist was never actually true but it didn't matter because so few services were actually traded. The situation has changed dramatically with more and more services now subject to international competition. (By the way, in the mid-1980, I worked on a report at the Congressional Office of Technology Assessment on International Competition in Services: Banking, Building, Software, Know-How....)
But my friend Howard Rosen, who heads up the Trade Adjustment Assistance Coalition, is quoted in the story as saying "This is not going to be a slam-dunk." If giving computer programmers who have been laid-off because of globalization the same benefits as auto workers laid-off because of trade is not a slam-dunk, then our entire trade policy is in serious trouble. If we can't provide even this band-aid, what can we do?
As I have said a number of times in this blog, we need a new trade policy (see here, here, here, here and here). How can we come up with a new workable trade policy if we can't take a simply step of acknowledging that services are, in fact, traded and therefore we need to treat service workers the same as manufacturing workers?
Keep an eye on this one - as it is likely to be a flashpoint in the trade policy debate.