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Trade Adjustment Assistance as a Model for Unemployment Insurance Reform

Trade Adjustment Assistance as a Model for Unemployment Insurance Reform. Howard Rosen National Academy of Social Insurance January 19, 2006. Trade Adjustment Assistance. Assists workers who lose their jobs due to increased imports or shifts in production

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Trade Adjustment Assistance as a Model for Unemployment Insurance Reform

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  1. Trade Adjustment Assistance as a Model for Unemployment Insurance Reform Howard Rosen National Academy of Social Insurance January 19, 2006

  2. Trade Adjustment Assistance • Assists workers who lose their jobs due to increased imports or shifts in production • Provides more assistance than under traditional UI and WIA • Federal entitlement program Howard Rosen Trade Adjustment Assistance Coalition

  3. TAA Eligibility Criteria • Decrease in production/employment • Increase in imports or shift in production • Increase in imports or shift in production “contributed importantly” to decline in employment • Secondary workers Howard Rosen Trade Adjustment Assistance Coalition

  4. Assistance • Additional 78 weeks of income support (conditioned on enrollment in training) • Training • Health Care Tax Credit • Wage Insurance (ATAA) • Job Search Assistance • Relocation Assistance Howard Rosen Trade Adjustment Assistance Coalition

  5. Wage Insurance • Workers over 50 years old • Take a new jobs within 26 weeks of separation • New job pays less than $50,000 and less than old job • Wage insurance will provide 50 % of the difference for up to 2 years • Maximum assistance of $10,000 over 2 years Howard Rosen Trade Adjustment Assistance Coalition

  6. Health Care Tax Credit • Worker has access to health insurance coverage • COBRA • State high risk insurance pools • Worker pays IRS 35 percent of premium • IRS pays 65 percent of premium Howard Rosen Trade Adjustment Assistance Coalition

  7. Changes in US Labor Market • Higher labor force participation • Structural factors more important; cyclical factors less important • Unemployment rate down • Unemployment duration up • Increased turnover Howard Rosen Trade Adjustment Assistance Coalition

  8. Job Gains and Losses by Industry Howard Rosen Trade Adjustment Assistance Coalition

  9. UI Reform Proposals • Shift to federal program • Allow voluntary contributions • Expand eligibility criteria for assistance • Wage Insurance • Health Care Tax Credit • Established tax-deferred saving for unemployment and retraining Howard Rosen Trade Adjustment Assistance Coalition

  10. Trade Adjustment Assistance Coalition 1615 Q Street, NW Suite 305 Washington, DC 200009 202-265-8555 Web site: www.TAACoalition.com E-mail: Rosen@TAACoalition.com Howard Rosen Trade Adjustment Assistance Coalition

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