Starting over
Worker retraining programs are popular but fall short of solving the job shortage
LANSING, MICH. --In the twilight of his working years, Michael Wey should be coasting into retirement from his factory job at toolmaker Olofsson Corp. here. Instead, the 58-year-old father of three spends long days in the classroom at Lansing Community College learning how to become a home inspector while his wife's paycheck from her secretarial job covers the bills. After 15 years at the factory, Wey was laid off in September 2002 from his $22.10-an-hour job when Olofsson succumbed to competitive pressures and shuttered its plant.
Finding himself unemployed, underskilled, and too young to collect Social Security, Wey took advantage of the Trade Adjustment Assistance program. Under the program, workers who are laid off because of outsourcing or foreign competition may be eligible for funding for up to two years of retraining in another field as well as two years of income. Wey hopes to get his contractor's license in residential construction. "I'll have a lot of different options for work, and construction jobs will always be there," he says.
Wey is one of the fortunate ones. After three years of job losses, some workers have turned to federal retraining to broaden their skills in a changing economy. But funds for such programs are limited, and many report difficulty finding jobs in new fields. And the sheer number of layoffs in some industries leaves many unemployed without much chance of retraining. In Michigan, 170,000 manufacturing jobs have been eliminated since 2000, many lost to labor overseas. The increase in requests for retraining benefits, coupled with a funding cap instituted by Congress in 2002, has drained the program's coffers in the hardest-hit states. In the Lansing area, TAA ran out of money just three months into its 2004 fiscal year. As a result, hundreds of unemployed factory workers in Michigan are on waiting lists for money to learn skills and hopefullygain work in promising sectors like healthcare or high tech.
Battleground. With outsourcing and job losses being key campaign issues, both President Bush and Democratic challenger John Kerry have visited this battleground state in recent weeks to win the state's 17 electoral votes. Al Gore beat Bush in 2000 by about 200,000 votes in Michigan, and polls show a dead-even race for the White House. An April poll by Lansing-based EPIC/MRA showed 47 percent of state voters favoring Kerry and 45 percent standing behind Bush.
Speaking in Ann Arbor in late April, Kerry stressed the need to expand the TAA program to provide assistance to a wider range of displaced workers. Just a week later, the Senate blocked a measure that would have extended benefits to service workers and increased funds for the program. Now, only workers who manufacture a product directly impacted by trade can qualify, and the program excludes workers in the service sector. The Bush administration tripled funding for TAA in fiscal 2004 to $1.3 billion from its 2002 levels but requested slightly less in its 2005 budget proposal. And Bush has said little about the program since.
Neither candidate has addressed the plight of workers like Stephen Knight, who was laid off when Wohlert Corp., a manufacturer of car engine parts, closed last December. Knight, 43, was a welder there for 10 years, making an average of $15 per hour. The firm filed for bankruptcy after 108 years of operation, and its Lansing factory sits vacant with rusting equipment in its empty parking lot and a "For Sale" sign out front.
Just weeks after being told they qualified for retraining funds, Wohlert employees learned that the state did not have the money to pay for their education. Knight, who wants to learn computer repair, is collecting unemployment. "I E-mailed my congressman," he says. "Now, I'm just waiting. There's not a whole lot I can do."
Howard Rosen of the Trade Adjustment Assistance Coalition says that TAA is a program with little political support. Because retraining displaced workers is an integral part of trade policy, antitrade constituents like unions don't actively advocate it. Rosen thinks funding for retraining should be doubled and the Labor Department should be more aggressive in touting its benefits. Moreover, he says, there should be a greater effort placed on job creation. "I believe that we as a nation are not committed to this issue yet," he says. "The ultimate goal is re-employment, not training."
Indeed, one of the main criticisms of the program is that retrained workers can't find jobs with their new skills. Local employment offices like Michigan Works in the Lansing area have counselors to help people determine which promising fields may work best for them. Computer training, healthcare, construction, and truck driving are some areas offering the most opportunity right now. Labor Department figures show that 61 percent of people who completed the TAA program found jobs, and they earned an average of 72 percent of their former salary in 2003. These rates were down from 67 percent and 74 percent, respectively, in 2002.
As Virgene Kirby has discovered, acquiring an education isn't necessarily enough. After working for 32 years in the offices of manufacturer Federal Mogul Corp., Kirby, 56, was laid off in 2000. She used the TAA program to complete a bachelor's degree in management and organizational development this month. Kirby currently works for Michigan State University, making $13.13 an hour, but she is searching for a job that will get her back to the $17.64 an hour she made at Federal Mogul. "I hope this retraining will pay off," Kirby says. "I'm grateful for it." She has been searching for months for a better-paying position and has gotten "a lot of nice rejection letters." She is now extending her search to other states.
But for many displaced workers, a comparable salary isn't the top priority. "Job security is what I'm really looking for," says Richard Love, who lost his job in inventory control for Spartan International, a manufacturer of commercial-sign products and adhesives for cars. Love is finishing up a program to become an office administrator.
Finding a new job depends heavily on regional economics. In rural areas where the economy cannot sustain dramatic increases in unemployment, people are more often forced to relocate. "We have more outbound commuting than we did previously," says Thomas Harned, director of economic development for Martinsville, Va., which lost 12,000 jobs in 10 years after several textile mills closed. Henry County, around Martinsville, has the highest unemployment rate in the state and, at 12.8 percent, is more than double the nation's. Still, Harned says, the local community college is at record enrollment, and the job market has improved during the past six months.
While the politicians will debate the loss of jobs in such key states as Michigan, the impact of global trade on U.S. jobs will grow no matter who wins the election. Michigan can expect more visits from both Kerry and Bush in the coming months, with outsourcing and job losses continuing to occupy the airwaves. But for many of those most affected by trade, politics simply doesn't matter. "This is a global economy," says Love. "There is nothing politicians can do to stop this. Workers have got to be resilient in this market. You can't expect to stay in one place for 30 years anymore."
This story appears in the May 31, 2004 print edition of U.S. News & World Report.