Dislocated Workers

The Labor Department has addressed several shortcomings affecting the North American Free Trade Agreement's (NAFTA) Transitional Adjustment Assistance Program. This program, which was begun in January 1994, provides benefits to workers who have lost their jobs because of increased imports from or production shifts to Mexico and Canada. By shortening its worker certification time frame, Labor was able to make almost all decisions on benefit eligibility within 40 days or less. Also, the state's added role in the certification program ensured rapid response services for workers who filed a petition. Labor broadened the program's eligibility requirements to include secondary workers (those indirectly affected by NAFTA), but limited guidance, unclear authority, and a slow and cumbersome funding mechanism may make it hard for these workers to obtain benefits. In addition, although the program more closely tied cash benefits to training by eliminating waivers and requiring workers to enroll in training, these restrictions have caused some workers to receive incomplete assessments and remedial assistance, along with a limited mix of services. Labor has not addressed some program shortcomings, such as the lack of ongoing support, follow-up, and performance monitoring. Labor has encouraged closer coordination among federal dislocated worker programs but has not formally required states to track participants.

GAO found that: (1) Labor has shortened its certification process for the NAFTA Transitional Adjustment Assistance (TAA) Program, resulting in 94 percent of NAFTA-TAA determinations being made in 40 days or less; (2) the states' added role in the NAFTA-TAA certification process has ensured rapid response services for dislocated workers; (3) although Labor has broadened the NAFTA-TAA eligibility requirements to include secondary workers, limited guidance, unclear authority, and a slow and cumbersome funding mechanism make it difficult for such workers to access benefits; (4) while Labor has more closely tied cash benefits to training by eliminating waivers and requiring workers to enroll in training, these restrictions have resulted in some workers receiving incomplete assessments and remedial assistance, and a limited mix of services; (5) Labor has not adequately addressed the lack of ongoing support, follow-up, and performance monitoring for NAFTA-TAA; and (6) while Labor has encouraged closer coordination between federal dislocated worker programs, it has not formally required states to track NAFTA-TAA participants.