June 23,2005

Baucus Works to Help Displaced Service Workers

Senator Introduces Bill to Expand Trade Adjustment Assistance

(WASHINGTON, D.C.) U.S. Senator Max Baucus today introduced the Trade AdjustmentAssistance Equity for Services Workers Act, which would extend the Trade AdjustmentAssistance (TAA) program to provide job retraining, income support, and health care benefits toservice sector workers who have lost their jobs due to international trade.

Baucus introduced the legislation after the Bush Administration struck TAA languagefrom the version of the United States-Central America-Dominican Republic Free TradeAgreement (CAFTA) Implementation Act that it submitted to Congress today. Last week, theTAA bill was adopted by a majority of the Finance Committee as an amendment to the CAFTAlegislation.

In a letter to the U.S. Trade Representative (USTR) sent last week, Baucus joined a bipartisangroup of senators from the Finance Committee urging the USTR to keep the language inthe final bill.

“Frankly, I am disappointed to have to introduce this bill yet again,” Baucus said. “Thelanguage of the bill was adopted by the Finance Committee, but the administration sent us thefinal implementing bill with the amendment stripped out.”

Baucus continued, “President Bush likes to say that trade is for everyone, and that we allshare the benefits -- including workers. He also says that we need a skilled workforce that cankeep American businesses competitive in global markets. This amendment presented thePresident with the perfect opportunity to show a real commitment to those priorities. But he letthe opportunity pass him by.”

The TAA program began in 1962, and was expanded under the Trade Act of 2002.Baucus proposed extending TAA benefits to service workers as part of both the Trade Act of2002 and the American Jobs Creation Act of 2004. Despite broad support in the Senate, theprovisions were struck in both bills.

Baucus raised the urgent need to provide America’s service workers with retraining andother transitional assistance in light of the trend toward moving service sector jobs offshore toother countries. He noted that 80 percent of American jobs are now in the service sector and thatstudies estimate that between a half million and over 3 million US service jobs will be movedoffshore in the next 5 to 10 years.

“Examples abound of service sector jobs – even high tech jobs – relocating overseas,”Baucus said. “This doesn’t mean the total number of jobs in the U.S. economy is shrinking. Butthe possibility that jobs may be available in a different field is cold comfort to a worker whoseown skills are no longer in demand.”

Baucus continued, “The benefits service workers will receive under this legislation wouldbe exactly the same as those now received by manufacturing workers affected by trade. When afactory relocates to another country, those workers are eligible for TAA. But when a call centermoves to another country, those workers are not eligible for TAA. It is a matter of simpleequity.”

This bill provides TAA benefits to three categories of service workers affected by trade:First, it covers workers who lose their jobs due to competition from imported services.For example, if a U.S. truck driver loses his job because his employer loses routes to a Mexicandomiciledtrucking company, the U.S. driver would be eligible for TAA.

Second, it covers workers who lose their jobs when a service facility relocates overseasas, for example, in the case of a call center or software design operation. These workers wouldbe eligible if their employer opens an overseas facility, or – as is often the case – if the employercontracts out the jobs to a foreign service provider. This “offshoring” eligibility would apply toboth private and public sector service workers whose jobs relocate overseas.

Third, the bill covers secondary service workers. Secondary workers are those whoprovide inputs to a primary firm where the workers are eligible for TAA. Right now, workerswho make parts for manufactured products are covered if they lose their jobs when the primaryfirm closes. But workers who supply services to a TAA-eligible firm do not. This bill correctsthat inequity.