Jobless Muddle

Anger over $1.6 billion

Clarence Murphy, 35, a Michigan trucker who hauls cars for the auto industry and has been periodically out of work for much of this year as a result of the nationwide slowdown in car sales, had a question for Jimmy Carter at a campaign town meeting earlier this month in Flint. Why is it, he asked, that the Federal Government gives generous unemployment retraining and compensation benefits to autoworkers who lose their jobs because of rising imports, while other workers, like himself, who are being laid off because of the same auto-industry slump get nothing? Carter eventually invited Murphy to the White House to explain that including workers like him in the program was simply "too costly." Both the question and the answer highlighted the inequities that abound in one of Washington's most confusing and costly unemployment programs, the so-called Trade Adjustment Assistance, or TAA.

Some 520,000 workers currently qualify for the federal payments as part of the TAA program. These payments can be as high as $269 a week and last up to 18 months. Started in 1962, TAA initially gave a cash payment to any worker who lost his job as a direct result of U.S. Government trade concessions that led to an increase in foreign imports. In 1974 Congress substantially relaxed the qualifications for recipients and boosted the size of the aid.

The beneficiaries of TAA range all the way from coal and textile workers to shoemakers and electronics-industry workers. But most attention is now focused on the nation's recession-ravaged steelworkers and autoworkers. American steelmen began qualifying for benefits in large numbers when foreign steel started pouring into the U.S. in the mid-1970s. More recently, the Labor Department has been ruling that rising automobile imports are hurting U.S. carmakers, thus opening the way for claims from laid-off autoworkers. In Michigan alone, some 150,000 autoworkers have already filed for benefits, while perhaps 220,000 more have applied from elsewhere around the country.

Yet workers like Murphy, who have been laid off by firms indirectly affected by the rise in imports, cannot qualify for aid. That sometimes arbitrary exclusion can produce bizarre results. Kenneth McMillan, a seven-year veteran of the McLouth Steel plant outside Detroit, which supplies sheet metal to the auto industry, was let go by his employer on March 11, but he has been unable to qualify for TAA benefits. Reason: even though a steelman, who thus might have qualified if foreign imported steel had hurt his company, McMillan lost his job because of imported cars instead. Complains his wife bitterly: "The denial of benefits stinks. As far as I'm concerned, we have just as much right to the money as the autoworkers. After all, the cars get made out of steel, don't they?"

A bill now in Congress would broaden the program to include the whole panoply of suppliers whose workers do not currently qualify for assistance. The measure would add perhaps as much as $1.2 billion annually to a program that is already racing out of control. In the past twelve months, expenditures have leaped from $259 million to $1.6 billion.

Instead of a blanket inclusion in the program of all suppliers, the Carter Administration wants a more modest, and less costly, reform. This would extend coverage only to suppliers of actual, essential components. What is more, such companies would have to show that at least 50% of their output had been going to the firm being directly hit by the import competition.

In the past ten years the number of federal programs like TAA that have been designed to ease the pain of joblessness, spur retraining and supplement the assistance provided under existing unemployment programs has swelled from nine to 18. There are now, for example, special programs for out-of-work West Coast lumber mill hands, ones to locate jobs for unemployed railroad workers, and a new program to find employment for airline employees who are let go as a result of deregulation. The mishmash of programs clearly needs a thorough re-examination rather than just some further tinkering.

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