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Displaced IT workers stand to lose federal help

Patrick Thibodeau | Jan. 6, 2011
Expansion of Trade Adjustment Assistance program to include service workers expires Feb. 12

FRAMINGHAM 6 JANUARY 2011 - WASHINGTON -- For the past two years, tech workers who lost their jobs because of offshore outsourcing could get federal benefits to help with education, healthcare and even relocation costs. But the benefits will disappear next month unless Congress extends them.

The benefits came through an expansion of the Trade Adjustment Assistance (TAA) program, created in the 1960s to help manufacturing workers displaced by foreign competition. When offshoring began to hit IT, tech workers wanted these same benefits, but were often denied them because software isn't viewed as a tangible good by the U.S. government.

But in 2009, as part of the stimulus bill, Congress changed the TAA program to make laid-off tech workers broadly eligible for benefits. Some 155,000 people who might have otherwise been ineligible for benefits have received them since that change was enacted, according to the Labor Department.

The expanded TAA benefits were due to expire at the end of 2010, but in December Congress extended them for six weeks, through Feb. 12. After that date, and absent Congressional action, the TAA program will revert to the rules in effect before the 2009 changes.

The potential loss of TAA benefits for tech workers may renew what has been a long battle. Among its veterans is James Fusco, a former IBM mainframe programmer who was laid off in 2002 and ultimately challenged the fairness of the TAA program in court.

Fusco says that if Congress doesn't extend the law, "we're back in the same boat we were in prior to the stimulus package, and each person in a company affected (by offshore outsourcing) is going to be on their own."

Fusco's lawsuit didn't change the law, but it prompted the Justice Department to extend benefits for some IBM workers. It was a partial victory that had little affect on him because of another job opportunity.

But the core issue remains: Should laid-off tech workers be treated differently from manufacturing workers? Not in Fusco's view. "In either case, you had a source of income, a source of livelihood, that is suddenly gone due to foreign competition," he said.

The Labor Department says that if the expanded TAA program isn't renewed, the states, which distribute the funds, will lose about $267 million next year.

"There's a consensus from all observers that trade and offshoring displaces American workers," said Ron Hira, an associate professor of public policy at the Rochester Institute of Technology. "Every standard economics textbook explains this fact of trade. Given the meteoric rise of services trade and outsourcing, there is simply no defensible reason why TAA should be limited to workers who make physical products."


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