Public Policy
Government Assistance Programs1
The major federal and state programs to aid displaced textile and apparel workers are:
- Trade Adjustment Assistance
- Rapid Response Services
- Dislocated Worker programs
- Unemployment Insurance
- National Emergency Grants
- Worker Adjustment and Retraining Notification
Each state has local One-Stop Career Centers to coordinate and provide services to displaced workers, including those from the textile and apparel industries.
1. Trade Adjustment Assistance
The Trade Adjustment Assistance (TAA) for workers program was established by the Trade Act of 1974 and provides training, income support, and other reemployment and supportive services to certified workers who have lost their jobs or had their work hours or salary reduced because of increased imports or shifts in production to foreign countries. Below are some of its details:
- All workers, even uncertified ones, have access to rapid response and other services, such as information on unemployment insurance (UI) benefits, job search assistance, local area job openings, and job training, through a local One-Stop Career Center or rapid response team.
- Group career workshops and other assistance such as skills assessment, stress management workshops, and one-on-one job counseling may be available to workers who need additional assistance.
- Training services for TAA-certified workers, such as on-the-job training (OJT), occupational skills improvement, and remedial education (e.g. English as a second language), may be available. TAA-certified workers can also receive income support in the form of trade readjustment allowances (TRA) if they enroll in an approved training program within a specified time. TRA may be provided for up to 104 weeks to complete a full-time training program. However, if remedial education is needed, a total of 130 weeks of training and TRA are possible.
Under the Trade Act of 2002, the amount of funds available annually for training under the worker TAA program doubled to $220 million. The total appropriation for the entire worker TAA program in FY 2003 was $972 million. The revised TAA program now includes a temporary, five-year program of Alternative Trade Adjustment Assistance (ATAA) for older workers. Under this program where a petition has been certified, workers in firms with a significant number of workers over the age of 50 who are without easily transferable skills may choose, instead of other TAA benefits, to receive payments of 50% of the difference between their pre-layoff wages and reemployment wages. A worker could receive payments for up to a two-year period, but the maximum amount paid may not exceed $10,000. In order to qualify, the worker must be at least 50 years of age, become reemployed within 26 weeks of separation, and be reemployed at annual wages of less than $50,000 in a full-time job that is not the job from which he/she was laid off.
A new Health Coverage Tax Credit (HCTC), administered by the Internal Revenue Service, is also available to dislocated textile and apparel workers.
2. Rapid Response Services
Rapid Response Services provide immediate aid to workers affected by announcements of plant closings and large layoffs, typically 50 or more workers. Each state has a designated Rapid Response Coordinator, through its dislocated worker department. In certain layoff situations, the dislocated worker offices may send one or more representatives to the affected work site to coordinate with workers before the layoff occurs. During rapid response, specialists assemble information on workers' needs and organize the services necessary to help individuals get back to work. These services may include: career counseling; job search assistance; and information about education and training opportunities. Other available services for workers about to lose their jobs include:
- Use of computers, telephones, and fax machines for job search purposes;
- Financial planning and stress management workshops;
- Financial support for training;
- Income support if the worker's job was lost due to foreign trade; and
- Special services for veterans and adults with disabilities.
3. Dislocated worker programs
Because TAA has time-intensive application procedures, many workers do not take advantage of retraining and financial support benefits provided under the Workforce Investment Act (WIA), which are comparatively more flexible and easier for individual workers to access quickly.
Under WIA, three types of no-cost services are available to dislocated workers to help get them back to work. Firstly, all workers have access to core services through a local One-Stop Career Center. Examples of core services include:
- Unemployment Insurance
- Job Search Assistance
- Job Referral
- Local Area Job Openings
- Resume Assistance
- Job Training
Secondly, individuals may also be eligible for one-on-one assistance, group career workshops, and other assistance such as:
- Assessment of their skills and abilities
- Resume writing classes
- Help in planning how to get back to work
- Stress and financial management workshops
- One-on-One job counseling
Thirdly, if an individual qualifies, a broad range of training services may be available. Local One-Stop Career Centers usually have a list of training programs, descriptions, and costs to help guide individuals in the decision-making process as well as help them identify sources of financial assistance to help pay for training. Eligibility requirements may exist for some dislocated workers services. Examples of services are listed below:
- Occupational Skills Training
- On-the-Job Training
- Skills Improvement
- GED Preparation
- English as a Second Language (ESL)
- Math and Reading Training
4. Unemployment Insurance
The Federal-State unemployment insurance (UI) program, created by the Social Security Act of 1935, offers the first economic line of defense against the effects of unemployment. Payments made directly to eligible, unemployed workers, providing partial replacement of lost earnings during unemployment. In order to be eligible for benefits, jobless workers must demonstrate workforce attachment, usually measured by wages earned and/or weeks of work, and must be able and available for work.
Most States currently pay up to a maximum of 26 weeks of regular State benefits. During periods of high and rising unemployment in individual States, extended benefits are payable for up to 13 additional weeks (20 in some cases), for a maximum of 39 weeks (or 46). Furthermore, during periods of national downturns when all States are impacted by high and sustained unemployment, federally funded programs of supplemental benefits have occasionally been adopted. One such program - the Temporary Extended Unemployment Compensation (TEUC) program - offers up to 13 weeks of benefits payable in all States, and up to an additional 13 weeks (for a TEUC total of 26) in States with high unemployment.
5. National Emergency Grants
National Emergency Grants (NEG) are awarded at the discretion of the Secretary of Labor. These funds provide employment and training assistance to workers affected by major dislocations. These funds provide assistance to the Governor of any State that has suffered an emergency or disaster. They provide disaster relief employment in the affected area, and offer additional assistance to a State or local board that has expended their dislocated worker funds.
In 2002, NEG awarded $2.65 million in two grants to a regional consortium led by the Western Piedmont Council of Governments in North Carolina. This was the second grant awarded to the Western Piedmont Council of Governments to assist workers. These grants supported employment transition-related assistance for approximately 1,240 workers laid off from employers in the textile, furniture and product manufacturing sectors of southwestern North Carolina. Services included transition-related assistance including assessment, case management, training, job development, job placement, and supportive services, such as child-care and transportation costs to attend training. North Carolina has also received NEG funds to help with the aftermath of the Pillowtex layoffs, including a $6.4 million grant in 2003 and two grants totaling $6.6 million in 2005 (see below).2
6. Worker Adjustment and Retraining Notification
Early intervention is facilitated by the Worker Adjustment and Retraining Notification (WARN) Act. With certain exceptions, the WARN Act requires employers with 100 or more employees to give at least 60 days advance notice of plant closings and mass layoffs. An employer must give notice to the affected employees or their labor union representative, the State Rapid Response Dislocated Worker Unit, and the appropriate unit of local government. Employees entitled to notice under WARN include hourly and salaried workers as well as managerial and supervisory employees. However, business partners, consultant or contract employees who have a separate employment relationship and paid by another employer, and the self-employed are not entitled to WARN notices. Enforcement of the WARN requirements is through the United States district courts.
Pillowtex Example3
On September 9, 2003, the U.S. Department of Labor announced TAA certification eligibility for approximately 5,000 workers laid off from Pillowtex in North Carolina, and other states to apply for Trade Adjustment Assistance services and benefits. The Pillowtex certification covered the period from August 2002 to August 2005 and enabled eligible Pillowtex workers to apply for TAA program benefits and services. At local One-Stop Career Centers, they obtained a broad range of reemployment and retraining services, including career counseling, job placement assistance, job search and relocation allowances and income support during approved training. The Labor Department also offered information about pension and health benefit protections.
Rapid Response efforts were put in place in North Carolina to serve employees in the Pillowtex plants with Rapid Response team meetings in several areas, including Rowan, Rockingham, and Cabarrus counties, to provide information on the various services provided including WIA dislocated worker programs, TAA programs, and services supported through National Emergency Grants. The Pillowtex shutdown led to several workforce investment centers organizing special efforts to serve Pillowtex employees. For example, Rockingham County organized information on a special Web site at its Displaced Worker Resource Center for Pillowtex employees. The site included information and links for financial assistance, short-term assistance, training and reemployment, human services and counseling, referral information, and medical assistance and health insurance information.
National Emergency Grants ($20.6 million) were also used to assist Pillowtex workers -- $13 million for retraining, job search assistance, and other services, and $7.6 million to help pay for worker health insurance policies.
Subsidies and Mill Towns
While the government has taken an active role in providing assistance programs for laid off workers, it is important to note that more money is spent to protect the industry than almost any other in the history of the United States. Government protection comes most prominently with the role of subsidies. For example, for 22 years the government subsidy for cotton has guaranteed nearly double the world market price for domestic cotton farmers. What is called a Step 2 subsidy the U.S. government pays American textile mills to purchase U.S. cotton that is sold at drastically inflated prices. An adverse consequence to this subsidy is the that by continuing to sell cotton at unnaturally high prices and limiting the amount of foreign cotton that domestic textile producers can import strains the textile industry to the tune of 30% increased costs on raw materials.
These increased costs along with the technological mechanization of work once done by workers has heightened the loss of textile and apparel factory jobs. The once vibrant mill towns that dotted the North Carolina Piedmont landscape are now a relic of the past. Factories in the Piedmont region carry a strong history that highlights a past representative of the struggle over labor rights, economic development, and town representation.
References
- United States Department of Labor, "Report to Congress: The Past, Present and Future of Employment in the Textile and Apparel Industries: An Overview," May 2004. pp.10-29. [http://www.dol.gov/opa/media/reports/textile_apparel_report.pdf]
- United States Department of Labor, Education & Training Administration, "National Emergency Grants," Website. Last accessed August 13, 2007. [http://www.doleta.gov/NEG/cy_awards.cfm]
- Department of Labor (fn. 27, pp.29-31).
