The Great Retraining Lie

There is a cruel economic hoax being played on millions of American workers, a hoax that unfortunately is being promoted by too many Democrats. The hoax is this: that workers who lose their jobs to so-called "free trade" can simply be retrained to do something else that will be a good substitute for what they have lost. This is a lie.

Right now, there is a bill moving through Congress to expand the so-called Trade Adjustment Assistant program (TAA), a program that I have found distasteful from its inception. Basically, the concept is this: if you lose your job because of trade, the government will spend money to retrain you. Rep. Charles Rangel is pushing a bill (approved last week by the House Ways and Means Committee) that would expand TAA to cover workers in services industries and allow the government to certify entire industries as eligible for TAA money (right now, the certification is done company by company); Sen. Max Baucus is working on a companion Senate version of Rangel's proposal.

I am going to give both Rangel (my very own congressman) and Baucus the benefit of the doubt--I'm going to believe that they sincerely think that what they are doing is a good thing. On its face, the idea of being trained can seem like a wonderful thing. But, Rangle and Baucus are sadly misguided and they are, intentionally or not, reinforcing a brutal economic model.

When we accept the idea of retraining workers, we accept the framework of discussion about the economic system that is being imposed on workers here and abroad. Boiled down to its basics, it goes something like this: "globalization" is inevitable so just get over it. There will be pain for some because that is the cost of progress. To ease that pain, we will throw some money at the "problem" of displaced workers.

Typically, I find that the people most in favor of the concept of retraining are those people who think they are never going to lose a job to so-called "free trade." That would be our elected officials, pundits, and a whole lot of economists. A whole lot of other folks buy the idea that this is a fair deal--without understanding both the realities for the people who are losing jobs and, frankly, that so-called "free trade" is driving down wages even for those people whose jobs are not directly tied to international trade.

The first task is to paint a real picture of life after losing a job. Louis Uchitelle recently observed this:

Across America, more than 30 million people have been forced out of jobs since the early 1980s, the Bureau of Labor Statistics reports, and regaining lost incomes has not been easy. Nearly 50 million new jobs have been created over that same period, according to the bureau, so there are always new opportunities but more often than not at lower pay. Among those who have lost work, only a third held new jobs two years later that paid as well as those that were lost, according to the bureau's surveys of displaced workers. Another third of those displaced were in jobs that paid, on average, 15 to 20 percent less than their previous employment -- while the final third had dropped out of the labor force entirely.

So, the truth is the vast majority of people who lose jobs never get the same income back--retraining or not.

The retraining scam, which has irked me for many years, fits very nicely into the larger frame that I've ranted about for way too long (here is one example): the idea that we can accept the great economic model represented by so-called "free trade" because if we just get educated, we will also fit quite nicely into the brave new world.

The problem with education, and the subset called "retraining," is that the global economy is based not on competition over skills but competition based on wages. No matter how smart you think you are--and, by the way, those people who say we have the smartest workers in the world should pay attention to the racist sentiments inherent in that idea--there will always be someone who will do your work for less if there is no minimum standard. So, education, which in the abstract is nice, is the wrong answer to the question of how people will have any kind of economic stability.

The second task is to ask: Why is this push for expanded TAA happening now? The people who have been pushing so-called "free trade" understand that their economic model is on the ropes. The pending so-called "free trade" deals with Colombia and South Korea are going nowhere, and the proposed agreements with Peru and Panama are also encountering opposition. Even the majority of Republican are opposed to so-called "free trade." In an October 15th piece on Rangel's proposal, The Wall Street Journal wrote that:

The lawmaker's approach is based on the idea that the best way to bolster support for free trade is by dealing head-on with some of the anxieties it creates among American workers and industries.

Indeed, the deal on TAA was expected to be a trade-off with the Bush Administration--Democrats would support so-called "free trade" agreements and, in exchange, the TAA would be expanded. By the way, the OMB is now recommending that the president veto the House TAA bill because the Administration opposes expanding the program's reach.

The third task, I believe, is to ask: why should we accept this frame? Why should we accede to the notion that we accept a brutal economic system that requires millions of people to be "retrained"--which is, at the very least, given the circumstances of the retraining, a humiliating and degrading experience. The very words of the program mask its implications: people are being "assisted" so that they can "adjust" to the new, brave world.

This is not inevitable. The entire debate over trade is simply about setting the rules, the terms of engagement over how trade should take place. These rules are not like the sun rising in the east and setting in the west. Workers should not have to accept the notion that massive job losses and a hammering down of wages is a natural consequence of "globalization."

And Democrats should stop enabling the imposition of an economic system by throwing a few bones to workers. Rather than try to ease workers' "anxieties" (as if this is some condition that should be treated with some Prozac) and retrain them like zoo animals, we need Democrats to put a halt to a vicious economic model that is doing grave harm to workers here and abroad.

Comments

[TommyMcCarthy]

I'm an admirer of Mr. Tasini and agree that this post is well done as a "statement of the problem".

His two most salient points: 1:)that "globalization is based not on a competition over skills but acompetition over wages"... and 2:).."there will always be someone who will do your work for less when there is no minimum standard" are of course irrefutable facts independent of what trade agreements may or may not be in place.

He fails to show, however, in what way retraining programs meant to mitigate the effects of job loss are somehow THEMSELVES responsible. If the intent is to decry the NEED for such programs then we can all agree to sing "Ain't That A Shame", and it most assuredly IS. If Mr. Tasini has something more specific in mind for REDUCING the need for retraining, I'd love to hear about it.

"Ben Dixon" asks the question more succinctly than I have here..(see comment above) and "Yowza1" posits at least one positive suggestion regarding bringing CEO and line worker pay more in line.

All in all a thought-provoking post and excellent comments by all. I usually make a point of reading Mr. Tasini's work, and I look forward to a piece with some specific proposals for protecting American jobs.

Until then, however, railing against retraining workers is, to my mind, only a short step up from blaming displaced workers themselves. I'd like to believe this was not Mr. Tasini's intent.........tm

[Mair1]

This 'bill for displaced workers' is bull@@it.

Instead of looking at 're-training' those displaced as a result of free trade, they should be making it taxably unfeasible for businesses to outsource white collar and blue collar manufacturing jobs.

[RickO]

That's right folks, when you lose your good paying IT job to someone in Calcutta, you can sign up for RETRAINING! (In some countires it's called re-education and is conducted in cozy camp environment.)

You can signup for such exciting careers like:
> French fry machine operator
> Bedpan santitation technician
> Telemarketer
> Drive-thru sales associate
> Wal-Mart Greeter
> War casualty
> Can collector
...and many more, all from our prestigious non-accredited free-trade University. Operators (in India) are standing by! Call now.

[DeeLight]

While jobs in manufacturing, construction and financial services fall, the Bureau of Labor Statistics notes that more than HALF of the job growth so far this year is in the health care and food-service industries.

Globalization of wages based on job function regardless of location should be addressed but that won"t save the US worker. The US standard of living is destined to decline.

Equitable globalization of wages based on job function regardless of location would have to drive down US wages.

However, if US companies keep moving jobs and operations to other countries for such greatly reduced labor costs, the US worker becomes unemployed or is forced to take one of the much lower paying jobs that are available. Well, actually, more than one probably.

Labor forces are exploited the world over even in the US. But the degree to which workers in other countries are mistreated is incomprehensible to the average US citizen.

Mainly because the average US citizen never considers how workers in other countries are treated. If some small portion of that nasty information manages to reach us, we choose to think of other things as we keep buying those cheap imported goods. Yet with jobs disappearing and real wages declining, what are we to do?

So if virtually none of the world"s workers are sharing equitably in the money pie, where"s all the money?

As for retraining, how much training does it take to go from manufacturing, construction or finance into food-service?

[Dantheman99]

Wages have not increased in 18 years in my field, but the cost of living sure has.

One of the problems is the hypersensitivity to inflation. From my macroeconomics class in graduate school I learned that our economy could easily sustain 3-5% inflation rate which would allow wages to rise. The people who don't like that are people who make their living off their capital rather than their labor. We need a Labor Party in this country badly. The Democratic Party used to be America's progressive-liberal-labor party, but the DLC Clintonians have destroyed it and turned it into another party of capital. I support the Greens currently as a far more pro-labor party than the Democrats.

One bill that should be supported is one that limits corporations to deduct executive pay from taxable income only up to 100% of what the lowest paid employee makes. It limits skyrocketing inequality, encourages those who run corporations to raise wages at the bottom and generates more tax revenue.

Trade is wonderful for our economy. What we call "free-trade" at the moment is not "fair trade". We need trade that is free and fair.

Single-payer health care will help our economy tremendously. Companies that are forced to bear the burden of providing health insurance to their employees are competing against companies around the world who live in nations with government financed universal health care.

That's why health care reform could really happen nationwide. Companies know the old world war II model of employer-based health care doesn't work for the future.

[outnow]

Great post!

I work with accident victims who are trying to put their lives back together. I frequently employ vocational rehabilitation experts to provide forensic assessments. Then I employ forensic economists to assess the effects of injuries and prospects of re-employment in the employment market. Oftentimes, these individuals go through the Workers Compensation system and/or the social security system. Also, these persons may have to be evaluated for private disability insurance, if they are so fortunate to have coverage.

I have to present and argue these cases in court with opposing experts.

Your points are well made. NAFTA is a disaster for vocational rehabilitation and employment for anyone other than CEOs, economists, lawyers, and physicians. Most other labor jobs can and will be outsourced.

Only 7% of private sector employees are unionized. Unions are increasingly approving two-tiered systems where new workers are not going to have the benefits that the senior employees have.

NAFTA is not a done deal unless the GOP or the DLC controls the executive branch and Congress.

Retraining? You can't train old dogs new with new tricks. In thirty years, I have never seen retraining being successful. What a joke!!!!

[aigeanta]

All the kids in my generation who trained in Computer Science, one of the most technical degrees you can get, had their $60-100K programmer jobs outsourced to India & China for $20-40K and they had to "retrain" to be service industry employees. It doesn't matter how much education you have - if they outsource your job, it's gone forever, and can only be replaced by slave-wage dead ends, or if you're lucky you'll find a job in an industry that hasn't been outsourced *yet*.

[jhNY]

Under cover of complete darkness, where photo opportunities fear to tread, both parties are taking money from the same transnational corporate actors, whose interests are slavishly served by both parties. It's a bitch fighting back from a kneeling position, but the money's good.

[yowza1]

Thank you for this insightful and heuristic piece. I think that a good start in the rather lofty direction you are pointing would be for some rules to change in this country to help equalize executive/CEO pay vis-a-vis that of the regular line workers in a company. As corporations are probably not directly susceptible to laws directly mandating greater equality in direct remuneration, the tax laws and policies should be changed to turn around this system wherein strategically positioned insiders grab an inordinate share of the nation's wealth.

[Aaror]

Here is a crazy idea...
Cancel all the free trade agreements, but only make one change to current actions. Impose a tarriff on all imports based on the difference between the wages paid in that nation and our minimum wage.
Would give corps two incentives,
1. to not move out of US for lower wages.
2. to pay locals at least the US minimum wage, since they may as well pay someone wages as pay the US debt down.

[Ben Dixon]

So what are you saying? That once a blue collar worker always a blue collar worker? That people are not able to accquire new skills and are stuck in their caste and unable to move about? Or are you saying that any trade that results in lost jobs is bad economic policy? Just curious.

[jhNY]

Often lost in the retraining discussion is this niggling little detail: retrain for what job precisely? I am old enough to remember Reagan exhorting displaced workers to retrain in information technology. What happened to the workers who did so? How many hold jobs in their new field today?

The new economic paradigm is roughly boiled down to: fuck you, losers. If you're worthless enough to lose your job, you're worthless enough to be blamed for it as if it were a failure on your part, a result of poor life choices.

This seems to satisfy most folks until they themselves unexpectedly join the ever-swelling ranks of losers.

Form the vantage point of steady employment, it is easy to build up a personal belief system in which you imagine your own unique talents and virtues buffer you from job loss. Lose that job and you are forced to start over, no matter your age, no matter your ability to retrain or afford retraining's cost.

And it's at that point that things move from the lofty theoretical to the nitty gritty of the real: With the last money you have or can borrow, which employment sector should you train to be a part of? Obviously, the job you retrain for should be a job that can provide enough income to cover your expenses plus the cost of retraining. So which job exactly? I await your reply.

[THORGODOFTHUNDER]

Oh, geez... of course there are exceptions. But in the main workers are getting screwed.

[LittleBrother]

I agree with your characterization of TAA and "retraining" as a scam.

Several years ago, I attended "rapid response" presentations offered by state employment services to groups of steelworkers and civilian federal employees scheduled to be laid off.

The woman coordinating these meetings was dedicated and truly believed in her mission; she would take the microphone and do the best she could to encourage these long-term employees that there was a light at the end of the tunnel. I particularly remember her claim that "her" career steelworkers and shipbuilders had transitioned successfully to health care jobs, e.g. Certified Nursing Assistant (CNA). I honestly can't remember if she cited statistics.

But the workers weren't exactly thrilled by the prospect, because reading between the lines they knew that this bright future meant lower pay and fewer, if any, benefits. Still, since TRA/TAA certified employers qualified these ex-employees for retraining benefits, most did apply for, and attend retraining.

State agency administrators would grumble, with some truth, that TAA claimants didn't have the right "attitude", and were only attending required retraining to continue to qualify for benefits. What a shock!

There was also a program administered by state unemployment insurance agencies that encouraged individuals to go into business for themselves. This program was predicated on the same analysis-- since manufacturing and industrial jobs in the US labor market have sharply declined, ex-employees might use this "opportunity" to become entrepeneurs.

I don't know if this program still exists, but I certainly never heard of any real success stories. Most of the applicants were trying, on relatively short notice, to put together a plan for operating a business with minimal guidance and experience. Everytime I see a storefront with a "For Rent" sign, even though the paint is still fresh from the previous failed small business, I wonder if the out-of-business owner was a graduate of the state self-employment program.

These programs are like cheap Band-aids that don't even stick.

[zaneblue]

Keep fighting the good fight!

[Oldchef]

Terrific post. Thank you for saying out loud what many of us have felt for the past 15-20 years.