Trade Adjustment Assistance
Reforms Have Accelerated Training Enrollment, but Implementation Challenges Remain Gao ID: GAO-04-1012 September 22, 2004The Trade Adjustment Assistance (TAA) Reform Act of 2002 consolidated two programs serving trade-affected workers and made changes to expand benefits and decrease the time it takes for workers to get services. GAO was asked to provide information on (1) how key reform provisions have affected program services, (2) what have been the challenges in implementing new provisions, (3) whether demand for TAA training has changed and how states are meeting this demand, and (4) what is known about what the TAA program is achieving.
Most workers are enrolling in services more quickly than in prior years, partly because of a new 40-day time limit Labor must meet when processing a request, or petition, for TAA coverage. Labor reduced its average petition-processing time from 107 days in fiscal year 2002 to 38 days in fiscal year 2003 after the Reform Act took effect. Also, most states reported that workers are enrolling in training sooner because of a new deadline requiring workers to be enrolled in training by the later of 8 weeks after petition certification or 16 weeks after a worker's layoff. However, this deadline may have negatively affected some workers--especially during large layoffs--as it does not always leave enough time to assess workers' training needs. States reported challenges implementing some new provisions of the TAA Reform Act. Officials in most of the states we visited reported an increased administrative workload from issuing training waivers to allow workers to qualify for the Health Coverage Tax Credit (HCTC)--over 40 percent more waivers were issued in fiscal year 2003 than in 2002. While officials in all the states we visited said workers are or are likely to be interested in the wage insurance provision (Alternative TAA, or ATAA) that supplements the wages of certain workers aged 50 and over, it is still unclear how many workers will take advantage of this benefit. However, some found the provision's eligibility criteria problematic, partly because they require workers to lack easily transferable skills yet find reemployment within 26 weeks of layoff. Demand for TAA training increased substantially in fiscal year 2002, prior to the implementation of the reforms. States have struggled to meet this higher demand with available TAA training funds, even though TAA training funds available nationally doubled between fiscal years 2002 and 2003. Most states have responded by using other federal employment and training resources. Information on TAA program results has been limited, but Labor is making improvements by requiring states to use wage records to track TAA outcomes. Labor also initiated a new, 5-year evaluation study.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-04-1012, Trade Adjustment Assistance: Reforms Have Accelerated Training Enrollment, but Implementation Challenges Remain
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Report to the Committee on Finance, U.S. Senate:
United States Government Accountability Office:
GAO:
September 2004:
Trade Adjustment Assistance:
Reforms Have Accelerated Training Enrollment, but Implementation
Challenges Remain:
GAO-04-1012:
GAO Highlights:
Highlights of GAO-04-1012, a report to the Committee on Finance, U.S.
Senate
Why GAO Did This Study:
The Trade Adjustment Assistance (TAA) Reform Act of 2002 which
consolidated the two former programs serving that served trade-affected
workers ”the TAA and North American Free Trade Agreement--Transitional
Adjustment Assistance (NAFTA-TAA) programs--and made a number of key
changes designed to expand benefits and decrease the time it takes for
to get workers to get services into services. GAO was asked to provide
information on (1) how key reform provisions have affected program
services, (2) whether demand for program services has increased and
how states are meeting this demand, what have been the challenges in
implementing new provisions, (3) whether demand for TAA training has
changed and how states are meeting this demand, and (4) what is known
about what the TAA program is achieving.
What GAO Found:
Most workers are enrolling in services more quickly than in prior
years, partly because of a new 40-day time limit Labor must meet when
processing a request, or petition, for TAA coverage. Labor reduced its
average petition-processing time from 107 days in fiscal year 2002 to
38 days in fiscal year 2003 after the Reform Act took effect. Also,
most states reported that workers are enrolling in training sooner
because of a new deadline requiring workers to be enrolled in training
by the later of 8 weeks after petition certification or 16 weeks after
a worker‘s layoff. However, this deadline may have negatively affected
some workers”especially during large layoffs”as it does not always
leave enough time to assess workers‘ training needs.
States reported challenges implementing some new provisions of the TAA
Reform Act. Officials in most of the states we visited reported an
increased administrative workload from issuing training waivers to
allow workers to qualify for the Health Coverage Tax Credit (HCTC)”
over 40 percent more waivers were issued in fiscal year 2003 than in
2002. While officials in all the states we visited said workers are or
are likely to be interested in the wage insurance provision
(Alternative TAA, or ATAA) that supplements the wages of certain
workers aged 50 and over, it is still unclear how many workers will
take advantage of this benefit. However, some found the provision‘s
eligibility criteria problematic, partly because they require workers
to lack easily transferable skills yet find reemployment within 26
weeks of layoff.
Demand for TAA training increased substantially in fiscal year 2002,
prior to the implementation of the reforms. States have struggled to
meet this higher demand with available TAA training funds, even though
TAA training funds available nationally doubled between fiscal years
2002 and 2003. Most states have responded by using other federal
employment and training resources.
Information on TAA program results has been limited, but Labor is
making improvements by requiring states to use wage records to track
TAA outcomes. Labor also initiated a new, 5-year evaluation study.
Possible path for receiving TAA services
[See PDF for image]
[End of table]
What GAO Recommends:
GAO recommends that the Department of Labor monitor the implementation
of certain provisions of the TAA Reform Act and propose legislative
changes if:
* the new training enrollment deadline is negatively affecting some
workers, or
* the eligibility criteria for the new wage insurance provision are
resulting in denial of services to some older workers who could
benefit from them that have presented initial implementation
challenges, specifically .
In its comments, Labor did not raise any issues with our findings,
conclusions, or recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-04-1012.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Sigurd R. Nilsen at
(202) 512-7215 or nilsens@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Most Workers Are Enrolling in Services Sooner, but Some May Be
Negatively Affected by the Enrollment Deadline:
New Health Care Provision Has Caused Increased Administrative Workload
for Some Officials, While Other Provisions Have Been Difficult to Fully
Implement:
Demand for TAA Training Has Increased, and States Have Responded by
Supplementing Limited TAA Funds with Other Federal Resources:
Information on Program Results Has Been Limited, but Labor Is Taking
Steps to Collect Better Data:
Conclusions:
Recommendation for Executive Action:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Final Decisions Rendered by the U.S. Court of
International Trade on Appealed TAA Cases, Fiscal Years 1999-2004:
Appendix III: Certified Workers, Benefit Recipients, and Expenditures:
Appendix IV: State Training Allocations, Fiscal Years 2001-2004:
Appendix V: Detailed Listing of Steps States Report Taking in Response
to Limited TAA Training Funds:
Appendix VI: Demographic Characteristics of TAA Participants:
Appendix VII: Comments from the Department of Labor:
Appendix VIII: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Major Changes in the TAA Reform Act of 2002:
Table 2: TAA Eligibility Requirements:
Table 3: Labor's Fiscal Year 2003 TAA Performance and Goals:
Table 4: Site Selection Criteria:
Table 5: Local Workforce Areas Selected for Visits:
Table 6: Final Decisions Rendered by the U.S. Court of International
Trade on Appealed TAA Determination Cases, Fiscal Years 1999-2004:
Table 7: TAA and NAFTA-TAA Certified Workers, Benefit Recipients, and
Expenditures, Fiscal Years 1999-2003:
Table 8: State Training Allocations, Fiscal Years 2001-2003, and State
Training Base Allocations, Fiscal Year 2004:
Table 9: Steps States Report They Have Taken in Response to Limited TAA
Training Funds, Fiscal Years 2001-2003:
Table 10: Steps States Report They Have Taken or Anticipate Taking in
Response to Limited TAA Training Funds, Fiscal Year 2004:
Table 11: Select Demographic Characteristics of Participants Exiting
TAA Program, July 1, 2001-June 30, 2002:
Figures:
Figure 1: Average TAA Petition Processing Time, Fiscal Years 1999-2003:
Figure 2: Example of How TAA Program Delays May Leave Workers Less Time
to Enroll in Training:
Figure 3: Increase in Individuals Receiving Training Waivers, Fiscal
Years 1999-2003:
Figure 4: Estimated Number of TAA-Certified Secondary Workers, Fiscal
Years 1999-2003:
Figure 5: Estimated Proportion of TAA-Certified Workers Who Are
Secondary Workers, Fiscal Years 1999-2003:
Figure 6: Most States Will Have Their Wage Insurance Programs
Operational by Mid-2004:
Figure 7: Estimated Number of TAA-Certified Workers, Fiscal Years 1999-
2003:
Figure 8: Number of Workers Entering TAA Training, Fiscal Years 1999-
2003:
Figure 9: Manufacturing Employment, Fiscal Years 1995-2003:
Figure 10: 37 States Place Limits on Training Costs per TAA
Participant:
Figure 11: States Have Taken a Variety of Steps in Response to Limited
TAA Training Funds:
Figure 12: States Use Various Funding Sources for TAA Case Management:
Figure 13: Number of States Using Supplemental Sources to Collect Data
on Specific Employment Outcomes:
Figure 14: Percentage of Total TAA Participants in Selected States,
Fiscal Years 2000-2002:
Abbreviations:
ATAA: Alternative Trade Adjustment Assistance:
ES: Employment Service:
GPRA: Government Performance and Results Act:
HCTC: Health Coverage Tax Credit:
IRS: Internal Revenue Service:
NAFTA-TAA: North American Free Trade Agreement Transitional Adjustment
Assistance:
OMB: Office of Management and Budget:
PART: Program Assessment Rating Tool:
TAA: Trade Adjustment Assistance:
TAPR: Trade Act Participant Report:
UI: Unemployment Insurance:
WIA: Workforce Investment Act:
WRIS: Wage Record Interchange System:
United States Government Accountability Office:
Washington, DC 20548:
September 22, 2004:
The Honorable Charles E. Grassley:
Chairman:
The Honorable Max Baucus:
Ranking Minority Member:
Committee on Finance:
United States Senate:
Economists generally agree that international trade has benefited
Americans in a number of ways, for example, through making a broader
range of goods and services available. However, international trade has
also contributed to layoffs in a range of industries, including the
manufacture of textiles, paper products, and electronic equipment. The
share of all United States employment that is in manufacturing has
declined fairly steadily over the last several decades. Recently, the
number of manufacturing employees in the United States fell by almost
2.1 million over a 2-year period between 2000 and 2002, representing 12
percent of the manufacturing sector. The sharp decline in manufacturing
employment in the United States has focused attention on the costs to
workers of increased global competition, and on federal efforts to
assist these workers--workers who, some evidence suggests, tend to be
older with fewer transferable skills than other dislocated workers.
These factors may complicate trade-affected workers' transition to
reemployment, and make federal efforts to help them reintegrate into
the workforce especially important.
The federal government has a number of programs to assist workers who
have been dislocated from their jobs. The primary program for workers
dislocated from manufacturing because of international trade is the
Trade Adjustment Assistance (TAA) program, established in 1962 and
currently funded at about $1.3 billion annually. Under this program,
workers may receive a variety of services, including training and
income support while they are in training for up to 2 years after they
exhaust their Unemployment Insurance (UI) benefits. In our previous
reviews of the TAA program, we found weaknesses in the program's
structure and operations. For example, the program allowed some workers
to delay entering training for several years after being laid off,
raising questions about the timeliness of the program's assistance.
Partly in response to these concerns, Congress passed the Trade
Adjustment Assistance (TAA) Reform Act of 2002. The act consolidated
two former programs that served trade-affected workers--the TAA and the
North American Free Trade Agreement Transitional Adjustment Assistance
(NAFTA-TAA) programs--and made a number of key changes designed to
expand benefits and decrease the time it takes to get workers into
services. The law required that most of these changes take effect in
November 2002, but it allowed some provisions to be implemented as late
as August 2003. Among the changes, the act:
* shortened from 60 days to 40 days the time Labor is given to process
petitions filed on behalf of groups of workers to determine their
potential eligibility for services;
* established a deadline for workers to enroll in training, after they
have been laid off or their petition has been approved, in order to
maintain eligibility for extended income support payments;
* created a Health Coverage Tax Credit (HCTC) to help trade-affected
workers who are enrolled in or have completed training, or have a
waiver from this requirement, pay for health insurance;
* created a wage insurance benefit for workers age 50 and older,
subsidizing the difference between the prior and new wages of some
trade-affected workers who find reemployment quickly; and:
* expanded the eligibility criteria for secondary workers--defined as
those who are indirectly affected by international trade, because they
supply component parts to or perform finishing work for directly
affected firms.
In light of recent changes to the program, you asked us to examine (1)
how key provisions of the TAA Reform Act have affected program
services, (2) what have been the challenges in implementing the TAA
Reform Act's new provisions, (3) whether demand for TAA training has
changed, and how states are meeting this demand, and (4) what is known
about what the TAA program is achieving. To address these questions, we
conducted a Web-based survey of the 50 states and Puerto Rico in March,
2004, and received responses from all 50 states. We collected
administrative data from the Department of Labor (Labor) on TAA
petitions, participants, services, performance, and expenditures from
fiscal year 1999 through 2003. We assessed all data for reliability and
found them to be sufficiently reliable for the purposes of our
reporting objectives. We conducted site visits to 5 states--Maine,
North Carolina, Pennsylvania, Texas, and Washington. We selected these
states according to several criteria, including recent experience with
large numbers of TAA participants; representation of a range of
adversely affected industries and, according to Labor officials, a
range of experiences implementing TAA; and geographic diversity. On our
site visits, we interviewed state officials, local service delivery
staff, employers, and TAA program participants. We conducted our work
between August 2003 and August 2004 in accordance with generally
accepted government auditing standards. (See app. I for more details on
our objectives, scope, and methodology.)
Results in Brief:
Most trade-affected workers are enrolling in services sooner than in
prior years because of certain key provisions of the TAA Reform Act,
but states report that the new training enrollment deadline has had
unintended consequences for some workers. With the new 40-day time
limit for processing petitions, Labor has reduced the average
processing time from 107 days in fiscal year 2002, before the new time
limit took effect, to 38 days in fiscal year 2003. In addition, 41 of
the 50 states reported that workers are now enrolling in training
sooner as a result of the new training enrollment deadline which
requires workers to be enrolled in training or have a training waiver
by the later of 8 weeks after the petition is certified or 16 weeks
after the worker is laid off. However, states report that some workers
have been negatively affected by the deadline. State officials told us
that, as a result of the training enrollment deadline, some workers may
not be enrolling in the most appropriate training. Officials reported
that in order to meet the deadline, they feel pressured to assess
workers more quickly and lack the time to adequately assess workers'
training needs. Another negative effect of the deadline, states report,
is that some potentially eligible workers are missing the deadline and
therefore losing their eligibility for any extended income support
beyond what is available through their UI benefits. Officials also told
us that the deadline may provide workers with too little time to
process the trauma of losing their jobs and to accept the need for
training or other services. These difficulties are heightened in the
case of large layoffs, because the volume of workers who need services
within a very short time period overwhelms the program's capacity to
provide them with appropriate skill assessments.
The implementation of the HCTC has increased the administrative
workload for some local areas, while some other new provisions of the
TAA Reform Act have been difficult for states to fully implement.
States report that implementing the HCTC has required them to issue
many more training waivers to TAA-eligible workers than in past years,
and officials in most of the states we visited told us that issuing
waivers has caused an increased administrative workload. States issued
over 40 percent more training waivers in fiscal year 2003 than in 2002,
according to Labor's data. State officials also told us that some new
provisions of the Reform Act have been challenging to fully implement.
For example, some states said it has been difficult to identify newly
eligible secondary workers because, in some cases, trade-affected
companies may be reluctant or find it difficult to provide lists of
firms that supply them with component parts. The estimated percentage
of workers covered by approved TAA petitions who are secondary workers
increased from just over 1 percent in fiscal year 2002 to just over 2
percent in fiscal year 2003. In addition, while officials in all of the
states we visited said workers are interested in or will likely be
interested in the new wage insurance provision, most states did not
implement the provision in calendar year 2003--and of the 1,962
approved TAA petitions in fiscal year 2003, 60 included approved
requests for the wage insurance program. It is unclear how many workers
will take advantage of the wage insurance benefit at this stage of
implementation. Also, Labor, officials in one state, and employers
found the wage insurance eligibility criteria problematic. The TAA
statute clearly indicates that to be eligible for the wage insurance
program, workers must lack easily transferable skills, yet find
reemployment within 26 weeks of layoff. Officials in one state told us
that these criteria exclude workers who can find reemployment quickly
but at lower wages, and who therefore could be well served by a wage
insurance benefit. In addition, after wage insurance coverage is
requested, employers must confirm that their workers lack easily
transferable skills, and an employer indicated that it is difficult to
assess the skill levels of an entire group of affected workers, who may
possess a diverse set of skills and skill levels.
Demand for TAA training increased substantially in fiscal year 2002,
and states are exhausting their TAA funds and using other federal
employment and training resources to serve many TAA-eligible workers.
According to Labor's data, the number of participants entering training
annually increased by over 50 percent to about 45,000 participants
between fiscal years 2001 and 2002, and remained roughly steady at that
higher level in fiscal year 2003. This increase in demand coincided
with a sharp decline in manufacturing employment in fiscal year 2002,
but predated the implementation of the TAA Reform Act in fiscal year
2003. States have struggled to meet this higher demand with the TAA
training funds available to them, even though TAA training funds
available nationally doubled between fiscal years 2002 and 2003.
According to our survey, 19 states temporarily discontinued enrolling
TAA-eligible workers in training at some point between fiscal years
2001 and 2003 because they lacked adequate training funds, and six
states have taken this step during fiscal year 2004. Responding to the
demand has been particularly difficult for states where officials have
interpreted the TAA statutory provisions on training to mean that all
TAA-eligible workers are entitled to training. However, Labor has
issued guidance encouraging states to consider service options other
than training for TAA-eligible workers, and many states are beginning
to take additional steps to manage their TAA training funds. For
example, several states we visited reported that they are more
carefully screening workers to determine if training is the most
appropriate strategy for them. Most states have responded to this
heightened demand, consistent with guidance from Labor, by increasingly
relying on other federal employment and training resources to support
both case management and training for TAA-eligible workers. For
example, since fiscal year 2001, 41 states have applied for federal
grants designed to provide assistance to laid-off workers in order to
supplement their TAA funds.
Historically, information on TAA program results has been limited, but
Labor has taken steps to gather more complete and accurate data on the
program. In 1999, Labor introduced a new performance measurement system
that was designed to collect information on TAA program participants
and their outcomes in order to track performance against national
goals. However, in a previous report we found that some states did not
report complete information to this system. In order to improve the
quality of performance data, Labor revamped the performance measurement
system in fiscal year 2001 and began requiring states to use UI wage
records for reporting outcomes for TAA program participants. While wage
records generally provide objective and consistent information, they do
not contain information on all categories of workers. Most states do
little to supplement wage record data with other data sources that may
capture this information; only 12 of the states we surveyed reported
that they collect outcome data beyond what is required by Labor. Labor
completed a study of program effectiveness in 1993, but the study's
conclusions are of limited usefulness in assessing the current program.
Labor recently began a new 5-year study of the implementation and
effectiveness of the TAA program, which it expects will provide more
useful findings. Labor expects the first of several interim reports
will be issued by mid-2005 and expects to issue the final report in
2009.
We are recommending that Labor monitor the implementation of certain
provisions of the TAA Reform Act that, according to officials, have
presented implementation challenges and may have had unintended
consequences for some workers, and if necessary, propose legislative
changes to address these issues. Specifically, we are recommending that
Labor assess (1) whether the new training enrollment deadline is having
a negative impact on some workers affected by very large layoffs, and
(2) whether the eligibility criteria for the wage insurance provision
are resulting in denial of services to some older workers who could
benefit from the program. In its comments on a draft of this report
Labor did not raise any issues with our findings, conclusions or
recommendations. Labor provided technical comments, which we
incorporated as appropriate.
Background:
To assist workers who are laid off as a result of international trade,
the Trade Expansion Act of 1962 created the Trade Adjustment Assistance
program. Historically, the main benefits available through the program
have been extended income support and training. Participants are
generally entitled to income support, but the amount of funds available
for training is limited by statute. For fiscal year 2004, about $1.1
billion was appropriated for income support and about $269 million for
training and other benefits.[Footnote 1] Labor certifies groups of
laid-off workers as potentially eligible for TAA benefits and services
by investigating petitions that are filed on the workers'
behalf.[Footnote 2] Workers are eligible for TAA if they were laid off
as a result of international trade and were involved in the production
of an article; workers served by the TAA program have generally been
laid off from the manufacturing sector.
Congress has amended the TAA program a number of times since its
inception. For example, in 1974 Congress eased program eligibility
requirements, and in 1988 Congress added a requirement that workers be
in training to receive income support. In 1993 Congress created a
separate North American Free Trade Agreement Transitional Adjustment
Assistance program specifically for workers laid off because of trade
with Canada or Mexico.[Footnote 3]
Changes Included in TAA Reform Act of 2002:
The most recent amendments to the TAA program were included in the TAA
Reform Act of 2002 (Pub. L. No. 107-210), which was signed into law in
August 2002. The Reform Act consolidated the former TAA and NAFTA-TAA
programs into a single TAA program and doubled the amount of funds
available for training annually. The act also:
* changed some administrative requirements in an effort to accelerate
the process of enrolling workers in the program;
* increased the maximum number of weeks of income support available, to
match the maximum number of weeks of training available;
* added two new benefits, a Health Coverage Tax Credit and a wage
insurance provision; and:
* expanded program eligibility to include some secondary workers
affected by trade with countries other than Canada and Mexico as well
as more workers affected by a shift in production (see table 1).
Table 1: Major Changes in the TAA Reform Act of 2002:
Petition processing;
Former TAA: 60-day time limit for Labor to conduct an investigation
and issue a decision;
Former NAFTA-TAA: 40-day time limit[A];
TAA under TAA Reform Act of 2002: 40-day time limit.
Extended income support;
Former TAA: 52 weeks of extended income support available after
exhaustion of UI benefits;
Former NAFTA-TAA: 52 weeks of extended income support available after
exhaustion of UI benefits;
TAA under TAA Reform Act of 2002: 78 weeks of extended income support
available after exhaustion of UI benefits (plus an additional 26 weeks
for participants completing remedial training).
Training enrollment deadline;
Former TAA: None[B];
Former NAFTA-TAA: Participant must be enrolled in training by the later
of 16 weeks after separation or 6 weeks after certification to qualify
for extended income support;
TAA under TAA Reform Act of 2002: Participant must be enrolled in
training or have a waiver from this requirement by the later of 16
weeks after separation or 8 weeks after certification to qualify for
extended income support.
Eligibility--secondary workers;
Former TAA: Secondary workers not eligible;
Former NAFTA-TAA: Secondary workers who supply component parts to or
perform finishing work for a firm directly affected by trade with
Canada or Mexico are eligible[C];
TAA under TAA Reform Act of 2002: Secondary workers who supply
component parts to any firm directly affected by trade, or perform
finishing work for a firm directly affected by trade with Canada or
Mexico are eligible.
Eligibility--shift of production;
Former TAA: Workers affected by shift of production to foreign
countries not eligible;
Former NAFTA-TAA: Workers affected by shift of production to Canada or
Mexico are eligible;
TAA under TAA Reform Act of 2002: Workers affected by shift of
production to countries with which the United States has a trade
agreement are eligible, and workers affected by shift of production to
other countries under certain conditions.
Authorization for training expenditures;
Former TAA: $80 million annually;
Former NAFTA-TAA: $30 million annually;
TAA under TAA Reform Act of 2002: $220 million annually.
Health Coverage Tax Credit;
Former TAA: No provision;
Former NAFTA-TAA: No provision;
TAA under TAA Reform Act of 2002: Covers 65 percent of participants'
health insurance premiums for qualified health plans.
Wage insurance (Alternative TAA);
Former TAA: No provision;
Former NAFTA-TAA: No provision;
TAA under TAA Reform Act of 2002: Subsidizes difference between prior
and new wages for older workers who obtain reemployment without TAA
training.
Source: GAO analysis.
[A] The 40-day time limit under the former NAFTA-TAA program included a
10-day time limit for states to issue a preliminary eligibility ruling,
followed by a 30-day time limit for Labor to make a final ruling.
[B] Prior to the Reform Act, workers could receive up to 26 weeks of
extended income support without meeting any training enrollment
deadline. However, to receive more than 26 weeks of extended income
support, workers were required to file a training application by the
later of 210 days after layoff or 210 days after petition
certification. This 210-day deadline still applies under the current
law.
[C] Secondary worker eligibility is not included in the statute that
authorizes the NAFTA-TAA program. When the NAFTA-TAA program was
created, however, the Clinton administration issued a Statement of
Administrative Action making workers secondarily affected by trade with
Canada or Mexico eligible for benefits and services through another
federal program.
[End of table]
Most of the changes included in the act--including the petition-
processing time limit, the training enrollment deadline, and the
expanded group eligibility criteria--took effect for petitions filed on
or after November 4, 2002. Congress allowed more time for the
implementation of the new benefit programs created by the act, giving
Labor until August 2003 to implement the wage insurance program and
certain components of the Health Coverage Tax Credit.
Under the current revised TAA program, eligible participants have
access to a wider range of benefits and services than before,
including:
Training. Participants may receive up to 130 weeks of training,
including 104 weeks of vocational training and 26 weeks of remedial
training (e.g., English as a second language or literacy).
Extended income support. Participants may receive up to 104 weeks of
extended income support benefits beyond the 26 weeks of UI benefits
available in most states. This total includes 78 weeks while
participants are completing vocational training and an additional 26
weeks, if necessary, while participants are completing remedial
training. The amount of extended income support payments in a state is
set by statute at the state's UI benefit level.[Footnote 4]
During their first 26 weeks of extended income support, participants
must either be enrolled in training, have completed training, or have a
waiver from this requirement; to qualify for more than 26 weeks of
extended income support, participants must be enrolled in training. The
TAA statute lists six reasons why a TAA participant may receive a
waiver from the training requirement, including that the worker
possesses marketable skills or that the approved training program is
not immediately available.[Footnote 5] States must review participants'
waivers at least every 30 days, and if necessary may continue to renew
participants' waivers each month throughout the initial 26 weeks of
extended income support.
Job search and relocation benefits. Payments are available to help
participants search for a job in a different geographical area and to
relocate to a different area to take a job. Participants may receive up
to a maximum of $1,250 to conduct a job search. The maximum relocation
benefit includes 90 percent of the participant's relocation expenses
plus a lump sum payment of up to $1,250.
Health Coverage Tax Credit. Eligible participants may receive a tax
credit covering 65 percent of their health insurance premiums for
certain health insurance plans. To be eligible for the credit, trade-
affected workers must either be receiving extended income support
payments, or they must be eligible for extended income support but are
still receiving UI payments, or they must be recipients of benefits
under the new wage insurance program. As a result, trade-affected
workers who are still receiving UI rather than extended income support
may register for the HCTC only if they are in training, have completed
training, or have a waiver from the training requirement.[Footnote 6]
The Internal Revenue Service (IRS) along with other federal agencies
administers the tax credit; states are required to regularly submit to
the IRS lists of potentially eligible TAA participants.
Wage insurance. The wage insurance program--known as the Alternative
TAA (ATAA) program--is a demonstration project designed for older
workers who forgo training, obtain reemployment within 26 weeks, but
take a pay cut. Provided the participant's annual earnings at his or
her new job are $50,000 or less, the benefit provides 50 percent of the
difference between the participant's pre-and postlayoff earnings up to
a maximum of $10,000 over 2 years. In order for the workers covered by
a petition for TAA assistance to qualify for the benefit, the petition
must include a specific request for ATAA eligibility. The petition must
stipulate that a significant proportion of the workers covered by the
petition are age 50 and older and that the workers lack easily
transferable skills.
Certification Process and Eligibility Requirements:
The process of enrolling trade-affected workers in the TAA program
begins when a petition for TAA assistance is filed with Labor on behalf
of a group of laid-off workers. Petitions may be filed by entities
including the employer experiencing the layoff, a group of at least
three affected workers, a union, or the state or local workforce
agency. The law requires Labor to complete its investigation, and
either certify or deny the petition, within 40 days after it has
received the petition.
Labor investigates whether a petition meets the requirements for TAA
certification by taking steps such as contacting company officials,
surveying a company's customers, and examining aggregate industry data.
When Labor has certified a petition, it notifies the relevant state,
which has responsibility for contacting the workers covered by the
petition, informing them of the benefits available to them, and telling
them when and where to apply for benefits.
The TAA statute lays out certain basic requirements that all certified
petitions must meet, including that a significant proportion of workers
employed by a company be laid off or threatened with layoff. In
addition to meeting these basic requirements, a petition must
demonstrate that the layoff is related to international trade in one of
several ways. Table 2 summarizes these statutory eligibility
requirements for the TAA program.
Table 2: TAA Eligibility Requirements:
Basic requirements (both must be satisfied):
(1) Significant number or proportion of workers in firm or subdivision
have been separated or are threatened with separation.
(2) Affected workers must have been employed by a company that
produced an article.[A].
Additional requirements (one must be satisfied);
(1) Increased imports--Imports of articles like or directly competitive
with articles produced by the firm have increased, the sales and/or
production of the firm has decreased, and the increase in imports has
contributed importantly to the decline in sales and/or production and
the layoff of workers.
(2) Shift of production--There has been a shift of production by the
firm to another country, of an article like or directly competitive
with the article produced by the firm, and either;
* the country to which production was shifted is party to a free trade
agreement with the United States;
* the country to which production was shifted is a beneficiary under
the Andean Trade Preference Act, the African Growth and Opportunity
Act, or the Caribbean Basin Economic Recovery Act; or;
* there has been or is likely to be an increase in imports of articles
like or directly competitive with articles produced by the firm.
(3) Affected secondarily by trade--Workers must meet one of two
criteria:
* Supplier secondary workers--Affected firm produces and supplies
component parts to another firm that has experienced TAA-certified
layoffs; parts supplied to the certified firm constituted at least 20
percent of the affected firm's production, or a loss of business with
the certified firm contributed importantly to the layoffs at the
affected firm;
* Downstream secondary workers--Affected firm performs final assembly
or finishing work for another firm that has experienced TAA-certified
layoffs as a result of an increase in imports from or a shift in
production to Canada or Mexico, and a loss of business with the
certified firm contributed importantly to the layoffs at the affected
firm.
Source: GAO analysis.
[A] Leased workers of companies under contract with a company that
produced an article also meet this eligibility requirement.
[End of table]
If Labor denies a petition for TAA assistance, the workers who would
have been certified under the petition have two options for challenging
this denial. They may request an administrative reconsideration of the
decision by Labor. To take this step, workers must cite reasons why the
denial is erroneous according to the facts, the interpretation of the
facts, or the law itself, and must mail their request to Labor within
30 days of the announcement of the denial. Workers may also appeal to
the United States Court of International Trade for judicial review of
Labor's denial. Workers must appeal a denial to the U.S. Court of
International Trade within 60 days of either the initial denial or a
denial following administrative reconsideration by Labor. (See app. II
for a summary of final decisions made by the U.S. Court of
International Trade since fiscal year 1999 on TAA appeals.)
Integration with One-Stop System and Workforce Investment Act Program:
The Workforce Investment Act (WIA) of 1998 encouraged greater
coordination between the TAA program and other federal employment and
training programs. WIA required the use of a consolidated service
delivery structure--called the one-stop center system--and mandated
that services for about 17 categories of federal employment and
training programs, including TAA, be accessible through this system.
These programs must ensure that certain services, such as eligibility
determination and assessment, are available through at least one one-
stop center in each local area.[Footnote 7]
The WIA dislocated worker program, also a mandated partner in the one-
stop delivery system, is the federal government's primary employment
and training program designed for laid-off workers. Funded at almost
$1.5 billion in fiscal year 2004, the dislocated worker program
includes two components: formula funds that Labor annually distributes
to states (about $1.2 billion) and the national reserve (about $300
million). Labor uses part of the national reserve to award national
emergency grants to states, based on their requests throughout the
year, to help them respond to disasters and major layoffs. Labor also
uses part of the national reserve to award national emergency grants
specifically to serve trade-affected workers who are also eligible for
the TAA program.[Footnote 8]
Most Workers Are Enrolling in Services Sooner, but Some May Be
Negatively Affected by the Enrollment Deadline:
States report that most trade affected workers are enrolling in
services sooner than in prior years because of some of the key
provisions of the TAA Reform Act, but the new training enrollment
deadline has had unintended consequences for some workers. The new 40-
day time limit for Labor to process petitions has enabled workers to
receive services more quickly after being laid off. In addition to
setting the new petition processing time limit, the act also
established a new training enrollment deadline for workers, and states
reported to us that most workers are now enrolling in training sooner
as a result of this deadline. However, states reported that some
workers have been negatively affected by the deadline. For example,
some workers may not enroll in the most appropriate training or may
miss the deadline and lose extended income support. These problems are
heightened in the case of large layoffs, some states reported.
Training Enrollment is Accelerated by Certain Provisions of the Reform
Act:
Most workers are enrolling in TAA services sooner than in prior years
because of two key provisions of the TAA Reform Act, the new petition-
processing time limit and the new training enrollment deadline. The
Reform Act reduces by one-third, from 60 days to 40 days, the time
period in which Labor must review a petition. The purpose of the
reduced time frame is to enable workers to receive benefits and
services more quickly. In the past, Labor sometimes had difficulty
meeting the 60-day time limit for petition processing. But it reduced
the average processing time from 107 days in fiscal year 2002, before
the new time limit took effect, to 38 days in fiscal year 2003 (see
fig. 1). Also, Labor improved the percentage of petitions processed in
40 days or less from 17 percent in fiscal year 2002 to 62 percent in
fiscal year 2003 after the act went into effect.[Footnote 9] According
to a Labor official, management changes helped the agency reduce the
average petition-processing time. For example, Labor developed a step-
by-step timeline for staff, laying out when they must complete specific
steps in the petition review process in order to meet the 40-day
requirement. In addition, Labor increased the number of petition
investigators by adding more contractors. Officials also have plans to
reengineer the petition reviews in part to expedite the
process.[Footnote 10]
Figure 1: Average TAA Petition Processing Time, Fiscal Years 1999-2003:
[See PDF for image]
[End of figure]
Workers are also enrolling in services sooner because of the new
training enrollment deadline.[Footnote 11] The deadline requires
workers to be enrolled in training or have a training waiver by the
later of two dates: either 16 weeks after being laid off or 8 weeks
after the petition is certified. Workers who fail to meet this deadline
become ineligible to receive extended income support benefits. Forty-
one of the 50 states surveyed reported that workers are now enrolling
in training sooner as a result of this deadline. Most states also
reported that the deadline accelerates the processes of determining
eligibility and notifying and assessing workers. Prior to the TAA
Reform Act, workers were required to be in training or have a training
waiver in order to start collecting extended income support benefits
after exhausting their UI eligibility--26 weeks in most states. Now,
because of the new deadline, workers may be required to either be in
training or possess a training waiver while still collecting regular UI
benefits.
Training Enrollment Deadline May Have Unintended Consequences for Some
Workers:
Although the new training enrollment deadline gets most workers into
training sooner, it has also had unintended consequences. For example,
officials from the majority of states reported that as a result of the
training enrollment deadline, some workers might not be enrolling in
the most appropriate training because less time is available to assess
workers' training needs. In order to meet the training enrollment
deadline, officials may feel pressured to assess workers more quickly.
State officials in some of the states we visited told us that some TAA
program participants are not able to carefully select training programs
because of rushed assessments.
Another negative effect of the new time limit is that some workers miss
the deadline and lose their eligibility for extended income support.
Thirty-six states report that workers at least occasionally miss the
deadline and consequently lose their eligibility for extended income
support beyond what is available through UI benefits. A local official
from North Carolina said that some certified workers in the local area
who would like to enter the TAA program miss the deadline, either
because they do not come in for TAA enrollment until after the deadline
has passed or they come into the one-stop before the deadline but do
not leave themselves enough time to enroll in training or obtain a
training waiver. For example, this official told us that in the case of
a recent layoff of 120 workers, 20 workers did not come into the one-
stop until after their deadline had passed. Other officials in North
Carolina said that workers who lose their eligibility for extended
income support generally are not allowed to enter training, because
state and local officials are concerned that with no other source of
income, workers will drop out of training.
The ability of workers to meet the new training enrollment deadline may
be negatively affected by delays in program operations. These delays,
as well as delays by workers themselves in registering for TAA
services, may contribute to some workers having insufficient time for
an assessment of their training needs or missing the training
enrollment deadline. One of the program operation delays occurs as a
result of the time it takes Labor to notify states about certification
decisions. After Labor has certified a petition, it waits several days
before informing the state, to give relevant members of Congress
advance notification. Twenty-one states reported that the time it takes
Labor to notify states about certifications at least occasionally
causes workers to miss the deadline. Another delay may occur as a
result of the time it takes for states to receive lists of affected
workers from companies. After a state receives notification from Labor
of a certification, it obtains from the company a list of the workers
affected by the certified layoff and sends a letter to these workers
informing them of their potential eligibility for TAA. Sometimes
companies are unable or unwilling to provide these lists in a timely
manner. In these cases, some workers miss the deadline because they
don't receive the notification soon enough or may have insufficient
time for an assessment of their training needs. Twenty-seven states
reported that the time it takes states to receive the list of affected
workers at least occasionally causes workers to miss the deadline. In
addition to these program delays, laid-off workers may have
insufficient time for assessment or miss their enrollment deadline
because of their own delays in seeking assistance. Some state and local
officials in the sites we visited told us it often takes time for
dislocated workers to process the emotional shock of being laid off and
accept the need for assistance, which may cause them to miss the
training enrollment deadline. Thirty-seven states reported on our
survey that workers' delays in reporting to one-stop centers for
counseling at least occasionally cause them to miss the deadline and
lose their eligibility for extended income support.
Figure 2 illustrates the program delays, using the timeline of an
actual layoff that began in December 2002 in one of the states we
visited. In this example, Labor notified the state 6 days after
certifying the petition (step 5). Almost another month elapsed before
the state received a complete list of affected workers from the company
(step 6). As a result, by the time the state mailed notification
letters, affected workers had, at most, 3 weeks to register for
services and enroll in training or receive a training waiver.
Figure 2: Example of How TAA Program Delays May Leave Workers Less Time
to Enroll in Training:
[See PDF for image]
[End of figure]
The delays described above are heightened in the case of large layoffs,
because the volume of workers who need services within a very short
time period overwhelms the program's capacity to provide workers with
appropriate assessment. Processing a large number of affected workers
quickly may be especially challenging for program administrators in
rural areas, which do not have many staff to perform case management.
Ten states reported that processing large layoffs often or very often
causes workers to miss the training enrollment deadline, and an
additional 9 states said processing large layoffs occasionally causes
workers to miss the deadline. For example, Texas officials told us that
when dealing with very large layoffs, states may need more time to
assess and process workers than is allowed by the new training
enrollment deadline. Officials in a rural area in Maine that
experienced a large trade-related layoff said that it was challenging
to get all affected workers to register for training within the
deadline. This area hired additional workers to perform outreach to
affected workers and encourage them to register for services.
In an effort to prevent workers from missing the new deadline and
losing eligibility for extended income support, some officials are
issuing training waivers to workers who reach their deadlines without
having enrolled in a training program.[Footnote 12] For example,
officials in Maine reported that during a large layoff in a rural area,
local staff granted mass waivers to workers so they would meet the
deadline and preserve their extended income support benefits. According
to a Maine official, staff in this rural area could not provide
appropriate assessment within the training enrollment deadline to all
affected workers, so waivers were necessary to prevent workers from
losing eligibility for extended income support.
New Health Care Provision Has Caused Increased Administrative Workload
for Some Officials, While Other Provisions Have Been Difficult to Fully
Implement:
Officials in some states and local areas reported an increased
administrative workload associated with issuing more training waivers,
primarily to accelerate Health Coverage Tax Credit enrollment, and
noted that some other new provisions in the TAA Reform Act were
difficult to fully implement. State officials are issuing more training
waivers than in the past, in order to ensure that workers are able to
access the HCTC after being laid off, and some officials told us that
this increase in waivers has caused a significant administrative
workload. States also reported that the provision that extends TAA
eligibility to secondary workers and the one that provides a wage
insurance benefit have been challenging to fully implement.
Most States Are Issuing More Waivers to Enable Workers to Receive HCTC:
Almost all states reported issuing an increased number of training
waivers since the TAA Reform Act took effect. Three states reported in
our survey that before the Reform Act took effect they issued training
waivers to over 50 percent of TAA-eligible workers. Since the Reform
Act took effect, 29 states have issued waivers to over 50 percent of
eligible workers, and 15 of these issued waivers to over 75 percent of
eligible workers. Labor's national data indicate that overall states
issued over 40 percent more training waivers in fiscal year 2003 than
in 2002 (see fig. 3).
Figure 3: Increase in Individuals Receiving Training Waivers, Fiscal
Years 1999-2003:
[See PDF for image]
[End of figure]
Most states reported to us that the reason they have issued more
training waivers is to ensure that workers are eligible for the
HCTC.[Footnote 13] Thirty-eight states reported on our survey that to a
great or very great extent, they have issued more training waivers
since the TAA Reform Act took effect in order to allow workers to
qualify for the HCTC. To activate eligibility for the HCTC, even while
they are still receiving UI benefits, workers must meet the eligibility
criteria for extended income support, including the requirement that
they must be in training, have completed training or have a training
waiver. Officials in all the states we visited told us that many state
and local officials are issuing waivers so that workers can quickly
become eligible for the HCTC. Officials in two of these states noted
that workers need waivers to enroll in the HCTC even before they reach
their training enrollment deadline. Furthermore, officials in two other
states told us that workers are receiving waivers to allow them to
enroll in the HCTC even before these workers exhaust their UI benefits.
According to officials in four of the five states we visited, issuing
waivers to enable workers to qualify for the HCTC causes a significant
administrative workload. The administrative workload associated with
issuing training waivers is considerable, in part because training
waivers have to be issued individually and must be reviewed monthly.
Officials in one state noted that the workload associated with issuing
waivers is especially burdensome during a very large layoff, when a
large volume of workers must be processed. Furthermore, the increased
administrative workload associated with issuing and reviewing training
waivers may be compounded for states that choose to issue extensions to
workers whose waivers expire before they exhaust their UI benefits.
Despite officials' efforts to ensure that workers are eligible for the
HCTC, the actual rate of HCTC participation is difficult to determine
because reliable data on the total number of individuals actually
eligible for HCTC are not available. For example, according to an
October 2003 survey for the IRS, some of those identified as
potentially eligible for, but not enrolled in HCTC, were in fact
ineligible because they had other coverage, such as Medicare or through
a spouse's employer, that made them ineligible for the tax credit.
Although there are no reliable national data on the HCTC participation
rate, officials in states we visited told us that workers might not be
taking advantage of the HCTC because eligible individuals lack
affordable health care insurance options from which to choose.
Furthermore, officials in one state also noted that some workers may
not take advantage of the HCTC because they cannot afford to pay their
entire health care insurance premium while they wait to enroll in the
HCTC.
States Reported Difficulties Implementing Other New Provisions:
States reported having difficulties with the implementation of two
other reform provisions--the provision that extends TAA eligibility to
an additional category of secondary workers and the new wage insurance
provision.
Secondary Workers Provision:
The TAA Reform Act extended eligibility to a new category of secondary
workers--workers who supply parts to any company directly affected by
trade, not just those affected by trade with Canada or Mexico, as was
true under the previous NAFTA-TAA program--and the number of secondary
workers covered by certified TAA petitions increased somewhat in fiscal
year 2003.[Footnote 14] However, it is unclear whether the number of
secondary workers certified after the TAA Reform Act represents a small
or large proportion of all secondary workers who are now potentially
eligible for the TAA program, particularly because most states reported
difficulties in identifying secondary workers and only some have
increased their efforts to do so. According to Labor's data, the
estimated number of secondarily affected workers covered by approved
TAA petitions increased from about 3,600 workers in fiscal year 2002,
before the Reform Act took effect, to about 4,700 workers in fiscal
year 2003 (see fig. 4).
Figure 4: Estimated Number of TAA-Certified Secondary Workers, Fiscal
Years 1999-2003:
[See PDF for image]
Note: The data used for this figure are estimates of secondary workers
certified as eligible for TAA, based on estimates of the number of
affected workers submitted by companies at the time TAA petitions are
filed with the Department of Labor. At the time petitions are
submitted, companies may not know exactly how many workers will be
affected. We use these estimates because the Department of Labor does
not collect data on the number of workers ultimately certified.
Furthermore, because the TAA Reform Act took effect for workers
certified under petitions filed on or after November 4, 2002, data for
fiscal year 2003 may include some secondary workers who were certified
from October 1, 2002 to November 3, 2002 under the previous eligibility
criteria.
[End of figure]
Secondary workers have also increased as a proportion of all TAA-
certified workers, from about 1 percent in fiscal year 2002 to about 2
percent in fiscal year 2003 (see fig. 5). However, the total number of
secondary workers who are potentially eligible for the TAA program
under the new eligibility guidelines is not known. As a result, it is
unclear what proportion of secondary workers potentially eligible for
services have been certified under the Reform Act.
Figure 5: Estimated Proportion of TAA-Certified Workers Who Are
Secondary Workers, Fiscal Years 1999-2003:
[See PDF for image]
Note: These percentages are percentages of all workers certified under
both the TAA and NAFTA-TAA programs, although prior to the TAA Reform
Act, secondary workers were eligible for services only under the NAFTA-
TAA program. Also, the data used for this figure are estimates of
secondary workers and total workers certified as eligible for TAA,
based on estimates of the number of affected workers submitted by
companies at the time TAA petitions are filed with the Department of
Labor. At the time petitions are submitted, companies may not know
exactly how many workers will be affected. We use these estimates
because the Department of Labor does not collect data on the number of
workers ultimately certified.
[End of figure]
States reported facing challenges in identifying secondary workers.
More than half of all states reported having at least some difficulty
identifying secondarily affected workers. States reported using a range
of methods to identify secondary workers eligible for the TAA program.
For example, according to our survey, states are most likely to
identify secondary workers by asking trade-affected employers for lists
of their suppliers or finishers or by asking employers if their layoff
was as a result of losing business from other firms that may have been
trade affected. However, officials in most of the states we visited
told us that some trade-affected employers are reluctant or find it
difficult to provide the names of suppliers that may also be affected
by their shutdown or reduced production. For example, officials in
North Carolina told us that employers are sometimes hesitant to share
this information because they do not want their suppliers to know that
they are having financial difficulties. Also, officials in Maine told
us that smaller employers may find it difficult to provide information
on their suppliers or finishers because they do not have this
information readily available. In addition, some trade-affected
employers may no longer be in operation or may be difficult to contact.
None of the state officials we talked with had developed procedures to
identify workers in other states who are secondarily affected by
layoffs in their own states--so workers in one state who are
secondarily affected by a trade-related layoff in another state might
never learn they may qualify for TAA services. Labor has also not
developed a strategy to assist states in identifying workers who are
secondarily affected by a layoff in a different state.
More states are making significant efforts to identify secondary
workers now than in the past, but this number remains relatively small.
While only 5 states reported on our survey that they sought to identify
eligible secondary workers to a great extent prior to the TAA Reform
Act, 13 states reported that since the Reform Act took effect, they
have sought to identify secondary workers to a great extent.
Wage Insurance Provision:
Officials in all of the states we visited told us either that workers
have expressed an interest in or they expect workers to be interested
in the new Alternative TAA program--a 5-year demonstration project
providing a wage insurance subsidy to older workers who find
reemployment quickly but at a lower wage. Most states also reported
having difficulty implementing this new program. Thirty-eight states
reported that they had at least some difficulty implementing the new
wage insurance provision. One of the most commonly reported problems
was the difficulty of developing new payment systems for issuing
workers' monthly checks. For example, an official in one state we
visited told us that the state's existing UI payment system, which is
used to issue payments to wage insurance beneficiaries, could not be
readily modified to issue payments to wage insurance beneficiaries.
Furthermore, an official from another state told us the state's current
UI payment system program prohibits it from issuing checks to
individuals identified in the system as employed. As a result, the
state uses an off-line payment system to issue wage insurance checks.
States also reported that a lack of guidance from Labor on this new
provision hampered their efforts to implement it. Labor did not provide
states with formal guidance on how to implement the provision until
August 6, 2003, the same day that workers were first able to apply for
the wage insurance program.[Footnote 15]
In addition, some officials and employers found the wage insurance
eligibility criteria problematic. The TAA statute clearly indicates
that for a group of workers to be certified as eligible for the wage
insurance program, the workers must lack easily transferable skills and
a significant number of the workers must be age 50 or over. Petitioners
must apply for wage insurance coverage when the petition is submitted
to Labor, and as part of the investigation process, employers must
confirm that their workers lack easily transferable job skills. The TAA
statute also clearly states that to be individually eligible for wage
insurance payments, workers must obtain reemployment within 26 weeks of
layoff and may not receive TAA-funded training. According to Labor, it
has been difficult to implement the wage insurance provision because of
eligibility criteria that include the requirement that workers must
lack easily transferable job skills. As a result of these eligibility
requirements, according to Labor, the only workers who are likely to
qualify for payments are those who take low-skill jobs at significant
pay cuts, and for whom the $10,000 maximum subsidy falls far short of
compensating them for their wage loss. On the other hand, some workers
who have some transferable skills, can find jobs paying closer to their
prelayoff wage, and need only temporary financial assistance may be
denied access to the program. According to Labor, most denied wage
insurance requests result from failure to meet this eligibility
requirement. Officials in one state and employers in two other states
also found the wage insurance eligibility criteria problematic. For
example, officials in one state we visited told us that the eligibility
criteria requiring workers to lack transferable job skills yet still
find employment exclude workers who can find reemployment quickly but
at lower wages, and who therefore could be well served by a wage
insurance benefit. In another case, an employer told us that several
administrative workers were laid off because of a plant closure and
were able to find new jobs that required the same job skills, but at a
much lower pay level because they no longer had job seniority. These
workers could have benefited from the program, according to their
employer, but were denied the subsidy because they had transferable
skills. In addition, a state official we visited reported that an
employer found that it was difficult to assess the skill levels of an
entire group of affected workers who often possess a diverse set of
skills and skill levels.
At this stage of implementation, it is unclear how many workers will
take advantage of the wage insurance benefit. Most states did not fully
implement their wage insurance programs in calendar year 2003, and some
do not expect to have their systems implemented until September 2004.
Only 19 states implemented their wage insurance programs during 2003;
most of the remaining states have implemented or expect to implement
their programs during 2004 (see fig. 6). In addition, it is unknown how
many workers are currently utilizing wage insurance benefits. Of 1,962
TAA petitions approved during fiscal year 2003, 60 included approved
requests for the wage insurance program[Footnote 16]--but at the time
we conducted our data collection, Labor's Division of Trade Adjustment
Assistance had no data on the number of older workers enrolled in the
wage insurance program. Labor is now collecting data on the number of
workers enrolled in the wage insurance program and will assess the
implementation issues associated with the wage insurance provision.
Figure 6: Most States Will Have Their Wage Insurance Programs
Operational by Mid-2004:
[See PDF for image]
Note: This figure is based on responses from 47 states. Three states
were unable to provide this information.
[End of figure]
Demand for TAA Training Has Increased, and States Have Responded by
Supplementing Limited TAA Funds with Other Federal Resources:
Demand for TAA services has increased in recent years, and states have
responded by using other federal resources to supplement available TAA
funds. States have struggled to meet the higher demand with the TAA
resources available to them, and some states have temporarily
discontinued enrolling TAA-eligible workers in training, partly because
of funding shortfalls. A perception that all TAA-eligible workers are
entitled to training has contributed to problems with managing TAA
training funds. However, Labor has encouraged states to take various
steps to manage their limited TAA resources more effectively and to
avoid treating training as the best option for all participants, and
many states have taken steps to control their TAA training expenditures
through efforts such as a more careful screening of workers' training
needs. Most states' primary response to the increased demand for
training has been to supplement their TAA funds with other federal
resources, although some barriers remain to the integration of TAA with
other federal programs.
Demand for TAA Services Increased during a Period of Manufacturing Job
Loss, and States Have Struggled to Meet This Demand with Available TAA
Funds:
Demand for TAA assistance increased substantially between fiscal years
2001 and 2002, as measured by the estimated number of workers certified
and the number of workers entering training.[Footnote 17] After
increasing in fiscal year 2002, the number of workers certified and the
number of workers entering training did not experience a further
substantial increase in fiscal year 2003. According to Labor's data, an
estimated 270,000 workers were certified as eligible for TAA services
in fiscal year 2002, a roughly 65 percent increase from 2001 and the
largest number in any year since at least fiscal year 1995. The
estimated number of certified workers then fell to about 200,000 in
fiscal year 2003 (see fig. 7).
Figure 7: Estimated Number of TAA-Certified Workers, Fiscal Years 1999-
2003:
[See PDF for image]
Note: The data used for this figure are estimates of the number of
workers certified as eligible for TAA, based on estimates of the number
of affected workers submitted by companies at the time TAA petitions
are filed with the Department of Labor. At the time petitions are
submitted, companies may not know exactly how many workers will be
affected. We use these estimates because the Department of Labor does
not collect data on the number of workers ultimately certified. These
estimates include workers certified as eligible under either the TAA or
the NAFTA-TAA program, but workers certified under both programs are
counted only once in our analysis. This method differs from the one
used in an earlier report.
[End of figure]
Similarly, the number of eligible workers entering training annually
increased in fiscal year 2002 to about 45,000, a 51 percent increase
over fiscal year 2001 (see fig. 8).[Footnote 18]
Figure 8: Number of Workers Entering TAA Training, Fiscal Years 1999-
2003:
[See PDF for image]
Note: These data are underestimates of the total numbers of workers
entering training, because some states did not capture all workers
entering training in the data they submitted to Labor.
[End of figure]
The increase in program demand in fiscal year 2002 coincided with a
sharp decline in manufacturing employment that preceded the
implementation of the TAA Reform Act of 2002. After having been
relatively steady since 1995, manufacturing employment began to decline
in 1999, and the steepest decline occurred between fiscal years 2001
and 2002--from about 16.8 million to about 15.5 million employees,
almost an 8 percent drop (see fig. 9). According to the Congressional
Budget Office, increased competition from imports is at least partially
responsible for this decline in manufacturing employment, coupled with
the recession in 2001 and other factors such as productivity
improvements and reduced demand for manufactured goods. The increase in
demand for TAA services may be more directly linked to the decline in
manufacturing employment, insofar as it was related to international
trade, than to the TAA Reform Act of 2002. While demand for TAA
services increased substantially during fiscal year 2002, most
provisions of the TAA Reform Act of 2002 did not take effect until
early in fiscal year 2003.
Figure 9: Manufacturing Employment, Fiscal Years 1995-2003:
[See PDF for image]
[End of figure]
Many states report that available TAA training funds are not sufficient
to meet the increased demand for services. Most states anticipate that
in fiscal year 2004 they will have difficulties meeting the demand for
TAA training with TAA training funds alone--even though the amount of
funds available nationally for TAA training was doubled from $110
million to $220 million between fiscal years 2002 and 2003. According
to our survey, 35 states expect that available TAA training funds for
fiscal year 2004 will not cover the amount they will obligate and spend
for TAA-eligible workers during the fiscal year. Eighteen states
estimate this gap at over $1 million.
A factor that has contributed to the difficulty states face in meeting
increased demand is the perception that training is an entitlement for
TAA-eligible workers. According to the TAA statute, a TAA-eligible
worker is entitled to training if six training approval criteria are
met, including the requirements that there is no suitable employment
available for the worker and that the training is available at a
reasonable cost.[Footnote 19] These criteria give states some
discretion in determining which TAA-eligible workers should receive
training. However, officials in four of the five states we visited said
training has historically been viewed as an entitlement for the
majority of TAA-eligible workers and that this perception persists
among some case managers and unions. For example, an official in one
state said some case managers responsible for the TAA program tend to
approve training whenever a certified worker requests it, because they
think these workers are entitled to training. This view may complicate
efforts to manage limited TAA training funds. Two officials we talked
with said training is seen as an entitlement because suitable
employment has been defined through regulation as employment paying at
least 80 percent of a worker's prelayoff wages. Most TAA-eligible
workers, according to one of these officials, have high prelayoff wages
but job skills that don't readily transfer to a new job, so they would
need training to obtain employment paying 80 percent of their prelayoff
wages.
Partly in response to the limited TAA training funds available to meet
the demand for training, some states have temporarily discontinued
enrolling TAA-eligible workers in training for periods of time.
Nineteen states reported that, at some point between fiscal years 2001
and 2003, they temporarily discontinued enrolling TAA-eligible workers
in training because they lacked adequate TAA training funds.[Footnote
20] Six states reported that they have taken this step during fiscal
year 2004. These periods of enrollment deferral may make it more
difficult for workers to complete their training programs.
Pennsylvania, for example, stopped enrolling newly eligible workers in
training for a 3-month period during fiscal year 2003 following more
than a year of unusually high demand for TAA services. Workers seeking
training during this period were given training waivers so they could
continue to collect extended income support. When the state received
additional TAA training funds from Labor, it encouraged these workers
to register for training and many did so. However, those workers who
enrolled in training had used up 3 months of extended income support
payments while waiting for training funds to become available. As a
result, they had fewer months of income support remaining to complete
their training programs, and officials are concerned that they could be
forced to drop out of their programs when they run out of extended
income support payments.
Since 2002, Labor has taken several steps intended to help states
better manage their TAA training resources at a time of increased
demand. Labor has encouraged states to put more emphasis on up-front
assessment of workers' employment and training needs, so they can
provide workers with job search assistance rather than long-term
training when appropriate. Also, Labor has changed its approach to
distributing TAA training funds among the states. In the past, states
requested TAA training funds from Labor throughout the fiscal year as
their needs arose. In fiscal year 2004, for the first time, Labor
allocated a portion of TAA training funds among the states according to
a formula. It allocated 75 percent of available TAA training funds
among the states at the beginning of the fiscal year, based on states'
historical training allocations and historical number of
participants,[Footnote 21] and held the remaining 25 percent in reserve
to help states that experience large and unanticipated trade-related
layoffs. Labor's goals in developing this new allocation approach were
to give states a better idea of the training resources available to
them, so they could more effectively plan for and budget their training
expenditures, and to ensure that funds are distributed among states
according to their needs. (App. IV contains information on the training
funds received by each state in fiscal years 2001 through 2003, and
each state's fiscal year 2004 formula allocation.) Finally, Labor has
encouraged states to obligate the TAA training funds they receive in a
fiscal year only for training costs that will actually be incurred
during that fiscal year, rather than for the full costs of training
programs that span multiple fiscal years. One of the main goals of this
effort, according to Labor officials, is to discourage states from
tying up current year funds for future training costs that may not be
incurred if workers drop out of training.
Many states are now making efforts to more carefully manage their TAA
training expenditures. More than half the states have developed new
guidelines for enrolling participants since fiscal year 2001, including
21 that have taken this step during fiscal year 2004. Four of the five
states we visited told us that they are making an effort to have case
managers more carefully assess whether training is the most appropriate
strategy for each TAA-eligible worker. Also, many states report that
since 2001 they have tried to control the amount of training funds
expended per TAA-eligible worker. Almost half the states have tried to
control training costs by enrolling TAA-eligible workers in shorter-
term training. States are also reducing the maximum amount that may be
spent on training for each TAA-eligible worker. According to our
survey, 37 states have established a cost limit on the amount that may
be spent on training for each TAA participant, ranging from $3,500 to
$25,000 (see fig. 10). Nine of these states reduced their cost limits
between fiscal years 2001 and 2003 as a way to manage their TAA
training funds, and 6 states have taken this step during fiscal year
2004. For example, Pennsylvania reduced its cost limit per TAA
participant from $20,000 to $16,000 during fiscal year 2003, as part of
its efforts to control costs.
Figure 10: 37 States Place Limits on Training Costs per TAA
Participant:
[See PDF for image]
[End of figure]
About half the states reported that since 2001 they have changed their
approach to obligating TAA training funds and are now obligating
current year funds only for current year training costs. Twenty-three
states reported that they have taken this step in fiscal year 2004
alone. (See fig. 11 for the number of states that have taken the steps
discussed above. See app. V for a detailed listing of steps taken by
each state.)
Figure 11: States Have Taken a Variety of Steps in Response to Limited
TAA Training Funds:
[See PDF for image]
Note: States could have taken a particular step both at some point
between fiscal years 2001 and 2003 and during fiscal year 2004.
[End of figure]
States Are Using Other Federal Funds to Supplement Case Management and
Training for TAA-Eligible Workers:
In addition to making changes in how they manage their TAA funds,
states have also been turning to other federal resources to help
provide case management and training to TAA-eligible workers. Labor has
encouraged states to combine TAA with other federal programs to serve
TAA-eligible workers, through written guidance and a series of regional
forums for state officials.[Footnote 22] In response to limited TAA
funds, almost all states--46--reported on our survey that they have
been co-enrolling TAA participants in the WIA program for job search or
training since 2001. States are also increasingly using WIA national
emergency grant funds to provide services, including training and case
management, to trade-affected workers.[Footnote 23] The amount of
national emergency grant funds awarded annually to states specifically
to serve TAA-eligible workers more than doubled from about $50 million
per year in fiscal years 2001 and 2002 to about $120 million in fiscal
year 2003.[Footnote 24]
Use of Other Federal Resources to Supplement TAA Case Management Funds:
States use several federal funding sources to support case management
for TAA-eligible workers, and increasingly are relying on WIA resources
for this purpose. States may use their TAA administrative funds--15
percent of their TAA training formula allocations--for case management,
but most states we visited said TAA administrative funds were not their
main funding source for TAA case management. Only 12 states reported
that they distribute TAA administrative funds to local areas to support
case managers working directly with TAA participants. In most of the
states we visited, officials told us that state Employment Service (ES)
staff members have historically been the primary providers of direct
case management services to trade-affected workers, and most states
also told us that Wagner-Peyser grant funds have been the main funding
source for these services.[Footnote 25] Several states told us that in
recent years, they have increased their reliance on WIA to provide case
management to TAA-eligible workers, and in the majority of states
nationwide WIA and ES staff are now the primary providers of case
management services including assessment of workers' interests and
skills, recommendation of training programs, and follow-up with workers
during training. Officials in two states said they are relying on WIA
to support case management for TAA-eligible workers partly in order to
serve the increased number of workers eligible for the program.
Officials in two other states said they are using WIA case managers to
help meet their goal of more carefully assessing TAA-eligible workers'
training needs, because these case managers have experience with this
type of assessment.
Most states are combining Wagner-Peyser funds, TAA administrative
funds, and different categories of WIA funds to support TAA case
management (see fig. 12).[Footnote 26] Most states--38--reported using
three or more different funding sources for TAA case management. Just
four states reported that they relied exclusively on a single funding
source; two said they used only Wagner-Peyser funds, and two said they
used only TAA administrative funds.
Figure 12: States Use Various Funding Sources for TAA Case Management:
[See PDF for image]
[End of figure]
Officials from several local areas we visited said that within their
local areas, they are increasingly taking the same approach to serving
all dislocated workers, regardless of the programs in which they are
participating. In a local area in Maine, for example, all case managers
at the one-stop center--whether state ES or local WIA staff--have been
cross-trained on the TAA and WIA programs. Any case manager can serve
any dislocated worker, and dislocated workers receive the same case
management services regardless of whether they are enrolled in the TAA
program or the WIA dislocated worker program. A one-stop center in
North Carolina that we visited supports its TAA specialist, an ES staff
member, through several funding sources, including Wagner-Peyser grant
funds, local WIA funds, national emergency grant funds, and TAA
administrative funds. This staff member serves the TAA-eligible workers
who come to the one-stop center, as well as some dislocated workers who
are enrolled in WIA, and provides each one with similar case management
services. In another local area in Pennsylvania, trade-affected workers
initially meet with an ES staff member who determines their TAA
eligibility and provides an orientation to the benefits available
through the TAA program. They complete a set of case management
activities, including assessment and development of a training plan,
which is provided by a combination of ES and local WIA staff members
and is required of all dislocated workers.
Two local areas we visited that had recently experienced large trade-
related layoffs relied on WIA's national emergency grant funds to
support case management services for TAA-eligible workers. A local area
in North Carolina, for example, established a temporary one-stop center
in a plant that was shut down as a result of trade, and used a portion
of its national emergency grant funds to hire temporary ES staff
members to help operate this center. A local area in Maine used some of
its national emergency grant funds to temporarily hire peer support
workers from among the workers affected by the trade-related layoff.
These peer support workers provided a range of services, including
outreach to affected workers, counseling, and skill assessment. An
official told us that affected workers are more likely to trust peer
support workers than other case managers because they feel comfortable
talking with a colleague who has been through the same layoff
experience.
Use of WIA to Supplement TAA Training Funds:
In addition to providing case management for TAA-eligible workers, some
states also use WIA funds to supplement TAA training funds, and often
use the same lists of training providers for TAA as for WIA
participants. For example, North Carolina has encouraged its local
areas to use their WIA funds whenever possible to support the costs of
TAA-eligible workers' training. State officials feel their TAA training
allocation is inadequate to serve the large number of trade-affected
workers in the state. A local area in Texas reported that it sometimes
combines TAA and WIA funds to pay for a TAA-eligible worker's training,
for example, when the worker's training program costs more than the
state's cost limit for TAA training. Three states we visited also use
national emergency grant funds to support training for TAA
participants. According to our survey, 41 states have applied for
national emergency grant funds to supplement their TAA training funds
since 2001. In most states, workers are generally choosing from the
same list of training providers whether they are TAA or WIA
participants. Fourteen states reported that training programs approved
for TAA participants must be on the state's WIA Eligible Training
Provider List,[Footnote 27] and an additional 23 states reported that
most training programs approved for TAA participants are on the state's
list.
Effect of WIA Performance Measures:
While some states report making use of these other funding sources,
some officials also told us that WIA's performance measures create an
obstacle to improved coordination between the programs. States and
local areas are held accountable for the employment outcomes of workers
who receive services through their WIA dislocated worker funds,
including the proportion of participants who obtain employment and the
difference between participants' wages in their old and new jobs.
States and local areas receive financial incentives and sanctions based
on their ability to meet their goals on these performance measures.
Officials in three states we visited reported that WIA performance
measures create a disincentive to co-enroll TAA-eligible workers in WIA
services. For example, an official in one state said local WIA
administrators often perceive trade-affected workers as having high
prelayoff wages but skills that are not readily transferable, and
therefore as having little chance of replacing their prelayoff wages in
a new job--one of several WIA performance measures. Local officials are
reluctant to enroll TAA-eligible workers in WIA, out of concern that
these workers will negatively affect their ability to meet their WIA
performance goals.[Footnote 28]
Information on Program Results Has Been Limited, but Labor Is Taking
Steps to Collect Better Data:
Information on TAA program results has historically been limited, but
Labor is making efforts to gather more complete outcome data and to
more accurately assess the program's effectiveness. In 1999, Labor
introduced a new participant outcomes reporting system that was
designed to collect national information on TAA program outcomes and
uses these outcomes to track program performance against national
goals. However, in an earlier study we found that information captured
by this reporting system was often incomplete and many states did not
validate information reported to Labor.[Footnote 29] Labor has taken
steps to improve the accuracy of this information by requiring states
to use UI wage records to track outcomes. Some categories of workers,
however, are not included in these wage records and most states do
little to supplement wage record data with other data sources. As a
result, program outcomes may be understated. To evaluate the effects of
the TAA program, Labor completed a study of the program in
1993.[Footnote 30] However, because of methodological issues and recent
reforms to the program, the study's conclusions are of limited
usefulness in assessing the current program. Labor recently initiated a
new 5-year study and expects the first of several interim reports by
mid-2005.
Labor Has Attempted to Improve Accuracy of TAA Data, But Information
Gaps Remain:
Labor has taken steps to improve the accuracy of TAA program
information captured by its participant outcomes reporting system, but
weaknesses persist. In an effort to improve information on the TAA
program, in fiscal year 1999 Labor introduced a new participant
outcomes reporting system, the Trade Act Participant Report (TAPR),
that was designed to collect national information on TAA program
participants, services, and outcomes, such as employment, employment
retention, and wages. States are required to submit quarterly summary
reports on participants who are no longer receiving any TAA program
services. In an earlier study, however, we found that some states
reported incomplete data on program outcomes and failed to validate
participant information reported to Labor. As a result, program
information may have been inaccurate. States reported that they relied
heavily on participant surveys to collect information on program
outcomes such as employment and earnings and that participants often
did not return these surveys. Furthermore, some states reported that
they were unable to report more complete information because they
lacked the resources to expand their data collection efforts to better
capture program outcomes. Similarly, Labor's Inspector General also
found that information on participants and program outcomes collected
in TAPR was inadequate for evaluating the program's performance against
national goals.[Footnote 31]
In response to concerns about the reliability of data reported on TAA
participants, Labor has taken steps to improve the information captured
in its participant outcomes reporting system by incorporating wage
records data, but some states may not be accessing all available wage
data. In fiscal year 2001, Labor began requiring states to use UI wage
records to report outcomes for TAA program participants. While wage
records generally provide objective and accurate information to track
workers' employment and earnings, the data have limitations that may
contribute to understating of program outcomes. For example, state wage
records only capture information on workers who get jobs in that state
and states cannot easily access wage record information from other
states. As a result, states may not be able to provide outcome
information for TAA program participants who gained employment in
another state.
To help track employment of TAA participants across state lines, some
states are using the Wage Record Interchange System (WRIS), a data
clearinghouse used under WIA that allows states to share their wage
record data.[Footnote 32] Since June 2002, states could use WRIS for
reporting TAA outcomes, but it is unknown how many states are using or
plan to use this system. While Labor officials told us that states are
encouraged to use WRIS to obtain more complete employment and earnings
information on TAA program participants, Labor could not provide
information on how many states are actually using this data
clearinghouse to track former TAA program participants because it does
not have a mechanism in place to identify these states. Officials in
four of the five states we visited reported that they are using WRIS to
track program participants' employment and earnings outcomes.
Some individuals may not be captured by wage record data. Wage records,
which cover about 94 percent of workers, do not include some categories
of workers such as the self-employed, most independent contractors,
military personnel, federal government employees, and postal service
employees. Most states do little to supplement wage record data with
other data sources despite the fact that such information can be
reported to TAPR, and, as a result, program outcomes may be
understated. Only 12 states reported that they collect data on outcomes
such as employment, earnings, or employment retention beyond what is
required for TAPR. Nine of these states reported collecting information
on whether participants find jobs after they leave the program (see
fig. 13). This information is generally collected through telephone
interviews or mail surveys of workers. Officials from two of these
states reported that this information is generally used as a local
program management tool to gauge the effectiveness of training programs
or providers rather than to collect more complete and accurate data for
TAPR. In contrast, in a recent study of WIA outcomes, we found that 39
states collect additional data to more completely track the outcomes of
WIA participants and to help them manage their programs
locally.[Footnote 33]
Figure 13: Number of States Using Supplemental Sources to Collect Data
on Specific Employment Outcomes:
[See PDF for image]
[End of figure]
Labor tracks TAA program outcomes against national goals, but the TAA
program has not met all of its goals in any given year. Since fiscal
year 2000, Labor has used outcomes that states report to TAPR to track
program performance against national goals related to employment,
wages, and job retention.[Footnote 34] For example, performance goals
set for fiscal year 2003 included having 78 percent of all participants
find employment. While Labor has exceeded some of its goals in previous
years, it has never met all of its goals in any given year.
Furthermore, according to Labor's outcome data, none of the TAA
performance goals set for fiscal year 2003 were met (see table
3).[Footnote 35]
Table 3: Labor's Fiscal Year 2003 TAA Performance and Goals:
In percent.
Employment--employed the first quarter after program exit;
Fiscal year 2003 performance: 63%;
Fiscal year 2003 goal: 78%.
Job retention--retention in employment in the third quarter after
program exit of those who were employed in the first quarter after
program exit;
Fiscal year 2003 performance: 86%;
Fiscal year 2003 goal: 88%.
Wages--earnings replacement rate for those employed in the first
quarter after program exit and still employed in the third quarter
after program exit;
Fiscal year 2003 performance: 74%;
Fiscal year 2003 goal: 90%.
Source: Department of Labor.
[End of table]
In fiscal year 2004, Labor announced its new initiative to implement a
reporting system that would collect and report program performance for
all workforce programs administered by Labor, including TAA. This
single system is intended to reduce barriers to greater service
integration across federal workforce programs, and Labor also expects
it will increase the reliability of its performance data by
standardizing measurements such as employment, job retention, and
earnings across all programs. The majority of outcomes data will still
be collected from wage records. However, Labor officials also reported
that states would be able to submit supplemental information on program
participants whose employment status and wages are not captured in wage
records. These supplemental data, however, will not be included in
annual performance outcomes calculations.
No Recent Data Exist on Program Effectiveness, but Labor Is Initiating
a New Impact Study:
No information is currently available to accurately measure program
effectiveness. However, Labor has recently taken steps to better
evaluate the effect of TAA services on participants. While outcomes
measures are an important component of program management in that they
assess whether a participant is achieving an intended outcome--such as
obtaining employment--they cannot, by themselves, measure whether the
outcome is a direct result of program participation. Other influences,
such as the condition of the local economy, may affect an individual's
ability to find a job as much or more than participation in an
employment and training program. In order to determine whether
participant outcomes are the effects of a program, rather than of other
factors, it is necessary to conduct an impact evaluation.
Labor last completed an evaluation of the TAA program in 1993 when it
analyzed the impact of TAA services, particularly training, on
participants' employment, job retention and earnings outcomes. The
study compared TAA participants with a sample of dislocated worker non-
participants with similar prelayoff characteristics. According to the
study's findings, TAA program participants tended to have longer
periods of joblessness than other dislocated workers. Furthermore the
study found that among TAA program participants, certain participants-
-including women or those with limited education--experienced
especially long periods of unemployment (see app. VI for an overview of
demographic characteristics of recent TAA participants).[Footnote 36]
However, methodological issues resulted in inconclusive findings
regarding the impact of training on TAA program participants'
employment and earnings. In addition, Labor officials told us that
because program benefits and services were significantly changed in
2002, the study's conclusions are of limited use in assessing the
current program.[Footnote 37]
Labor initiated a new 5-year study of the TAA program in 2004, and
while details of this study are still being determined, the study is
expected to consist of three phases. The first phase will be a study of
the initial implementation of the TAA Reform Act. The longer-term
phases of the study include a quasi-experimental impact study and an
in-depth study of program administration that will identify promising
practices and data collection issues. The second phase of the study
will measure the effects of program services such as training on
participants' employment, earnings, and employment retention. The
current plans include collecting data from interviews and
administrative records for both TAA program participants and a
comparison group of UI claimants, which will be matched to participants
using a technique that allows researchers to more readily identify
appropriate comparison groups.[Footnote 38] According to Labor
officials, the methodology expected to be used in this study to
identify comparison groups is an improvement over the methodology used
in the previous study and should provide them with more conclusive
findings about the impact of TAA services on participants. Although
this is a long-term study, several interim reports are expected. The
first of several interim reports is anticipated in mid-2005, and Labor
expects to issue the final report in 2009.
Conclusions:
International trade is at least partially responsible for the decline
in manufacturing over the last several years in the United States.
Workers affected by trade may face greater barriers to reemployment
than workers laid off for other reasons, for example because trade-
affected workers are often older than other dislocated workers. By
providing training and extended income support, the TAA program is
intended to help workers laid off because of international trade obtain
reemployment.
The TAA Reform Act of 2002 changed the program in several ways that
were intended to improve and expand services for trade-affected
workers. At this early stage in implementation, several changes appear
to be helping trade-affected workers. The clearest positive effect so
far is that trade-affected workers are enrolling in services sooner,
because of the new time limit on Labor's processing of TAA petitions
and the new deadline for workers to enroll in training. It is too early
to tell what will be the results of some changes, for example, how many
workers will take advantage of the new wage insurance benefit.
Meanwhile, states report that certain provisions of the Reform Act have
presented implementation challenges. The new training enrollment
deadline may be causing some workers to lose their eligibility for
extended income support, making it more difficult for them to complete
the training they may need to obtain reemployment at wages comparable
to their prelayoff wages. The new enrollment deadline may also be
preventing some workers from receiving thorough assessments of their
training needs and enrolling in the most appropriate training.
Furthermore, these difficulties may be heightened in the cases of very
large layoffs. Some officials report that eligibility requirements for
the new HCTC have increased their administrative workload by causing
them to spend more of their resources issuing training waivers just to
facilitate workers' eligibility for the tax credit. Resources spent on
issuing training waivers may be detracting from time invested in
providing workers with needed job placement and training assistance.
Furthermore, some find the eligibility criteria for the wage insurance
program problematic, for example because the criteria require workers
to lack easily transferable skills yet find re-employment without TAA-
funded training. These eligibility criteria could be resulting in the
denial of wage insurance payments to some workers who could benefit
from the program.
Recommendation for Executive Action:
We recommend that Labor monitor issues related to the implementation of
certain provisions of the TAA Reform Act that may have had unintended
consequences for some workers, and propose legislative changes as
deemed necessary. In particular, Labor should track over time the
following:
* the ability of workers to meet the new training enrollment deadline
and of states and local areas to provide appropriate assessments to all
trade-affected workers within the deadline, especially when responding
to very large layoffs, and:
* whether the eligibility criteria for the new wage insurance program
are resulting in the denial of services to some older workers who could
benefit from the program.
Agency Comments:
We provided a draft of this report to officials at Labor for their
review and comment. In its comments, Labor did not raise any issues
with our findings, conclusions or recommendations. Labor provided
technical comments, which we include as appropriate. Labor's comments
are reproduced in appendix VII.
We are sending copies of this report to the Secretary of Labor,
relevant congressional committees, and others who are interested.
Copies will also be made available to others upon request. The report
is also available at no charge on GAO's Web site at http://www.gao.gov.
Please contact me on (202) 512-7215 if you or your staff have any
questions about this report. Other major contributors to this report
are listed in app. VIII.
Signed by:
Sigurd R. Nilsen:
Director, Education, Workforce, and Income Security Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
We were asked to provide information on (1) how key provisions of the
Trade Adjustment Assistance (TAA) Reform Act have affected program
services, (2) what have been the challenges in implementing the TAA
Reform Act's new provisions, (3) whether demand for TAA training has
changed, and how states are meeting this demand, and (4) what is known
about what the TAA program is achieving. To address these questions, we
conducted a Web-based survey of all 50 state workforce agencies that
administer the TAA program and Puerto Rico. We conducted site visits to
5 states--Maine, North Carolina, Pennsylvania, Texas, and Washington--
and interviewed state and local officials in each state. We reviewed
data and documents from the U.S. Department of Labor (Labor) and other
sources. We also interviewed officials from Labor, the AFL-CIO, the
National Association of State Workforce Agencies, and the Congressional
Research Service.
Web-Based Survey:
To collect broad information on TAA Reform Act implementation and
states' management of their training funds, we surveyed state officials
from the 50 states and Puerto Rico in March, 2004. Washington, D.C. was
not surveyed because it did not have a TAA program. This structured
survey was administered via e-mail and the Internet and had a 98
percent response rate, including responses from all 50 states. The
survey was designed to obtain information on the following: Labor and
state efforts to reach out to new categories of eligible workers such
as secondary workers, the effect of new training enrollment deadlines
on services to participants, and obstacles that states faced in
implementing new provisions in the TAA Reform Act, including the Health
Coverage Tax Credit and the wage insurance provision. The survey also
included questions on other sources of funds used to support services
for TAA participants and the extent to which states collect outcome
data that is more up to date and accurate than the data required by
Labor.
Because this was not a sample survey, there are no sampling errors.
However, the practical difficulties of conducting any survey may
introduce other errors, commonly referred to as nonsampling errors. For
example, difficulties in how a particular question is interpreted, in
the sources of information that are available to respondents, or in how
the data are entered into a database or were analyzed can introduce
unwanted variability into the survey results. We took steps in the
development of the questionnaire, the data collection, and the data
analysis to minimize these nonsampling errors. For example, GAO survey
specialists designed the questionnaire in collaboration with GAO staff
with subject matter expertise. Then, the draft questionnaire was
pretested with three state officials to ensure that the questions were
relevant, clearly stated, and easy to comprehend. When the data were
analyzed, a second, independent analyst checked all computer programs.
Since this was a Web-based survey, respondents entered their answers
directly into the electronic questionnaire. This eliminates the need to
have the data keyed into a database, thus removing an additional source
of error.
Site Visits:
We selected 5 states for site visits according to several criteria,
including experience with large numbers of TAA participants in recent
years, representation of a range of adversely affected industries,
states recommended by Labor either as models in implementing TAA or as
states facing implementation challenges, and geographic diversity (see
table 4). In each state we interviewed state officials on topics
including TAA Reform Act implementation, management of TAA training
funds, and coordination between TAA and other federal programs.
Table 4: Site Selection Criteria:
State: Maine;
Average participants[A] per year, FY00-FY02 (national ranking): 1,286
(14);
Average TAA training allocation per year, FY01- FY03 (national
ranking): $4,073,574 (17);
Recent adversely affected industries: Paper, computer equipment,
apparel.
State: North Carolina;
Average participants[A] per year, FY00-FY02 (national ranking): 6,850
(1);
Average TAA training allocation per year, FY01-FY03 (national ranking):
$6,596,453 (7);
Recent adversely affected industries: Textiles.
State: Pennsylvania;
Average participants[A] per year, FY00-FY02 (national ranking): 2,401
(7);
Average TAA training allocation per year, FY01-FY03 (national ranking):
$14,846,753 (1);
Recent adversely affected industries: Steel, airlines, chemical dye,
electronics.
State: Texas;
Average participants[A] per year, FY00-FY02 (national ranking): 4,368
(2);
Average TAA training allocation per year, FY01-FY03 (national ranking):
$9,893,323 (3);
Recent adversely affected industries: High-tech,[B] oil, electronics,
garment/apparel.
State: Washington;
Average participants[A] per year, FY00-FY02 (national ranking): 3,749
(3);
Average TAA training allocation per year, FY01-FY03 (national ranking):
$11,070,045 (2);
Recent adversely affected industries: Aluminum, lumber/paper/forest
products, aerospace.
Source: Department of Labor and GAO analysis.
[A] Participants are workers in training during the fiscal year.
[B] High-tech job categories include computer-related occupations and
technical and quality assurance.
[End of table]
Combined, the 5 states constituted about 36 percent of the national
total of TAA participants from fiscal years 2000 through 2002 (see fig.
14).
Figure 14: Percentage of Total TAA Participants in Selected States,
Fiscal Years 2000-2002:
[See PDF for image]
Note: Because of rounding, the total does not add up to 36 percent.
[End of figure]
We judgmentally selected two local areas in each state and visited a
mix of urban and rural areas (see table 5). We met with local
officials, program participants, employers, and workforce investment
board members. We collected information on how local areas are
implementing provisions of the TAA Reform Act and how they are
coordinating Workforce Investment Act and TAA funds.
Table 5: Local Workforce Areas Selected for Visits:
State: Maine;
Local workforce area: Augusta;
City: Augusta;
Local workforce area: East Millinocket;
City: East Millinocket.
State: North Carolina;
Local workforce area: Vance County;
City: Henderson;
Local workforce area: Kannapolis;
City: Kannapolis.
State: Pennsylvania;
Local workforce area: Berks County;
City: Reading.
Local workforce area: Lehigh Valley;
City: Lehigh Valley.
State: Texas;
Local workforce area: Greater Austin Area;
City: Austin.
Local workforce area: Dallas County;
City: Richardson.
State: Washington;
Local workforce area: Cowlitz/Wahkiakum East;
City: Kelso.
Local workforce area: Tacoma-Pierce County Employment & Training
Consortium;
City: Tacoma.
Source: GAO analysis.
[End of table]
Review of Data from Labor and Other Sources:
We reviewed data from Labor on petitions, participants, services,
performance, and expenditures from fiscal year 1999 to fiscal year
2003. For fiscal year 2003, we broke out data on petition-processing
times between workers served prior to the TAA Reform Act and those
served after implementation of the Reform Act in an attempt to isolate
the effects of program changes. We assessed the reliability of key data
by interviewing Labor officials, reviewing Labor documentation, and
performing edit checks of computer-based data. We found some
limitations in these data but judged the data to be sufficiently
reliable for the purposes of our reporting objectives. In particular,
some data on certified workers and on the number of workers entering
training annually may have inaccuracies, but we believe these data to
be sufficiently reliable for the purpose of demonstrating trends over
time, the main focus of our reporting objective. Data that were used
for background purposes and provided in app. VI were not independently
verified.
[End of section]
Appendix II: Final Decisions Rendered by the U.S. Court of
International Trade on Appealed TAA Cases, Fiscal Years 1999-2004:
Workers whose petitions for certification of TAA eligibility are denied
by the U.S. Department of Labor may seek judicial review of Labor's
decision by filing an appeal with the U.S. Court of International
Trade. Workers may file such an appeal either after Labor's negative
determination on the initial petition or after Labor's negative
determination on a reconsideration of its determination. The U.S. Court
of International Trade may affirm the action of the Department of
Labor, set it aside in whole or in part, or return--termed remand--the
case to Labor to take further evidence.
Table 6: Final Decisions Rendered by the U.S. Court of International
Trade on Appealed TAA Determination Cases, Fiscal Years 1999-2004:
Number of decisions;
Fiscal year: 1999: 2;
Fiscal year: 2000: 4;
Fiscal year: 2001: 3;
Fiscal year: 2002: 4;
Fiscal year: 2003: 8;
Fiscal year: 2004: 5;
Totals: 26.
Outcomes[A]: Reversed Labor's decision after remand;
Fiscal year: 2002: 1;
Fiscal year: 2003: 2;
Totals: 3.
Outcomes[A]: Affirmed Labor's original decision without remand;
Fiscal year: 1999: 1;
Fiscal year: 2001: 1;
Fiscal year: 2002: 1;
Totals: 3.
Outcomes[A]: Affirmed Labor's reversal of original decision after
remand;
Fiscal year: 2000: 1;
Fiscal year: 2003: 3;
Fiscal year: 2004: 4;
Totals: 8.
Outcomes[A]: Affirmed Labor's negative decision after remand;
Fiscal year: 1999: 1;
Fiscal year: 2000: 1;
Fiscal year: 2001: 2;
Fiscal year: 2003: 1;
Totals: 5.
Outcomes[A]: Dismissed;
Fiscal year: 2000: 2;
Fiscal year: 2002: 2;
Fiscal year: 2003: 2;
Fiscal year: 2004: 1;
Totals: 7.
Source: GAO analysis.
[A] Four other cases were remanded to the U.S. Department of Labor for
reconsideration. However, the results of these remands were not
available to us at the time of this report.
[End of table]
[End of section]
Appendix III: Certified Workers, Benefit Recipients, and Expenditures:
Table 7: TAA and NAFTA-TAA Certified Workers, Benefit Recipients, and
Expenditures, Fiscal Years 1999-2003:
Certified workers[A];
Fiscal year: 1999: 175,898;
Fiscal year: 2000: 116,720;
Fiscal year: 2001: 164,701;
Fiscal year: 2002: 274,081;
Fiscal year: 2003: 204,233.
Extended income support: Payments;
Fiscal year: 1999: $213.1;
Fiscal year: 2000: $257.6;
Fiscal year: 2001: $260.4;
Fiscal year: 2002: $228.6;
Fiscal year: 2003: $326.9.
Extended income support: New recipients;
Fiscal year: 1999: 37,540;
Fiscal year: 2000: 34,965;
Fiscal year: 2001: 34,690;
Fiscal year: 2002: 42,362;
Fiscal year: 2003: 47,992.
Workers entering training[B];
Fiscal year: 1999: 32,587;
Fiscal year: 2000: 25,258;
Fiscal year: 2001: 30,340;
Fiscal year: 2002: 45,771;
Fiscal year: 2003: 47,239.
Training-related costs[C];
Fiscal year: 1999: $97.3;
Fiscal year: 2000: $106.7;
Fiscal year: 2001: $99.0;
Fiscal year: 2002: $145.0;
Fiscal year: 2003: $191.4.
Job search allowance: Payments;
Fiscal year: 1999: $0.1;
Fiscal year: 2000: $0.1;
Fiscal year: 2001: $0.1;
Fiscal year: 2002: $0.1;
Fiscal year: 2003: $0.2.
Job search allowance: Recipients;
Fiscal year: 1999: 314;
Fiscal year: 2000: 371;
Fiscal year: 2001: 261;
Fiscal year: 2002: 2,126;
Fiscal year: 2003: 433.
Relocation allowance: Payments;
Fiscal year: 1999: $1.0;
Fiscal year: 2000: $1.2;
Fiscal year: 2001: $0.9;
Fiscal year: 2002: $1.0;
Fiscal year: 2003: $1.7.
Relocation allowance: Recipients;
Fiscal year: 1999: 772;
Fiscal year: 2000: 757;
Fiscal year: 2001: 407;
Fiscal year: 2002: 453;
Fiscal year: 2003: 766.
Source: Department of Labor.
Note: All dollars are in millions.
[A] The data used for this table are estimates of the number of workers
certified as eligible for TAA, based on estimates of the number of
affected workers submitted by companies at the time TAA petitions are
filed with the Department of Labor. At the time petitions are
submitted, companies may not know exactly how many workers will be
affected. We use these estimates because the Department of Labor does
not collect data on the number of workers ultimately certified.
[B] This figure is an underestimate of the total number of workers
entering training, because some states do not capture all workers
entering training in the data they submit to Labor.
[C] Includes costs of tuition, transportation, subsistence, and
related expenses for all workers who received training during the
year. States may pay some of these costs through funding sources other
than TAA, such as WIA funds.
[End of table]
[End of section]
Appendix IV: State Training Allocations, Fiscal Years 2001-2004:
Prior to fiscal year 2004, Labor awarded TAA training funds to states
based on their requests throughout the fiscal year. In fiscal year
2004, Labor allocated 75 percent of available training funds among the
states at the beginning of the fiscal year according to a formula. The
amounts allocated to states at the beginning of fiscal year 2004 are
their base allocations. Labor held the remaining 25 percent of
available training funds in reserve to help states respond to large
and unanticipated layoffs throughout the year. States are eligible to
submit requests for 25 percent reserve funds only after they have
expended 50 percent of their base allocations.
Table 8: State Training Allocations, Fiscal Years 2001-2003, and State
Training Base Allocations, Fiscal Year 2004:
State: Alabama;
Fiscal year 2001: $6,762,498;
Fiscal year 2002: $690,000;
Fiscal year 2003: $2,639,932;
Fiscal year 2004: $2,352,825.
State: Alaska;
Fiscal year 2001: $0;
Fiscal year 2002: $0;
Fiscal year 2003: $1,425,664;
Fiscal year 2004: $539,240.
State: Arizona;
Fiscal year 2001: $4,520,650;
Fiscal year 2002: $925,865;
Fiscal year 2003: $4,286,604;
Fiscal year 2004: $3,190,283.
State: Arkansas;
Fiscal year 2001: $2,645,000;
Fiscal year 2002: $1,451,875;
Fiscal year 2003: $2,919,461;
Fiscal year 2004: $2,226,153.
State: California;
Fiscal year 2001: $6,787,415;
Fiscal year 2002: $7,831,443;
Fiscal year 2003: $9,437,155;
Fiscal year 2004: $6,826,917.
State: Colorado;
Fiscal year 2001: $1,093,500;
Fiscal year 2002: $1,177,232;
Fiscal year 2003: $2,590,199;
Fiscal year 2004: $1,859,483.
State: Connecticut;
Fiscal year 2001: $2,642,528;
Fiscal year 2002: $2,300,000;
Fiscal year 2003: $3,205,582;
Fiscal year 2004: $2,388,390.
State: Delaware;
Fiscal year 2001: $0;
Fiscal year 2002: $0;
Fiscal year 2003: $41,466;
Fiscal year 2004: $0.
State: Florida;
Fiscal year 2001: $5,168,100;
Fiscal year 2002: $3,747,465;
Fiscal year 2003: $5,594,035;
Fiscal year 2004: $4,332,785.
State: Georgia;
Fiscal year 2001: $0;
Fiscal year 2002: $1,891,750;
Fiscal year 2003: $0;
Fiscal year 2004: $0.
State: Hawaii;
Fiscal year 2001: $11,541;
Fiscal year 2002: $0;
Fiscal year 2003: $0;
Fiscal year 2004: $0.
State: Idaho;
Fiscal year 2001: $1,920,421;
Fiscal year 2002: $3,137,200;
Fiscal year 2003: $4,304,245;
Fiscal year 2004: $3,155,550.
State: Illinois;
Fiscal year 2001: $5,663,750;
Fiscal year 2002: $4,427,500;
Fiscal year 2003: $7,923,660;
Fiscal year 2004: $5,809,033.
State: Indiana;
Fiscal year 2001: $2,415,000;
Fiscal year 2002: $3,323,500;
Fiscal year 2003: $6,597,124;
Fiscal year 2004: $4,836,517.
State: Iowa;
Fiscal year 2001: $405,150;
Fiscal year 2002: $1,035,000;
Fiscal year 2003: $6,376,729;
Fiscal year 2004: $4,513,308.
State: Kansas;
Fiscal year 2001: $347,814;
Fiscal year 2002: $2,019,208;
Fiscal year 2003: $6,025,569;
Fiscal year 2004: $4,417,495.
State: Kentucky;
Fiscal year 2001: $2,388,901;
Fiscal year 2002: $3,200,757;
Fiscal year 2003: $2,688,600;
Fiscal year 2004: $2,405,596.
State: Louisiana;
Fiscal year 2001: $1,124,701;
Fiscal year 2002: $940,010;
Fiscal year 2003: $728,928;
Fiscal year 2004: $612,285.
State: Maine;
Fiscal year 2001: $3,174,980;
Fiscal year 2002: $4,381,291;
Fiscal year 2003: $4,664,450;
Fiscal year 2004: $3,607,190.
State: Maryland;
Fiscal year 2001: $34,500;
Fiscal year 2002: $690,000;
Fiscal year 2003: $706,808;
Fiscal year 2004: $518,179.
State: Massachusetts;
Fiscal year 2001: $1,667,500;
Fiscal year 2002: $2,702,500;
Fiscal year 2003: $8,133,369;
Fiscal year 2004: $5,962,776.
State: Michigan;
Fiscal year 2001: $2,866,156;
Fiscal year 2002: $6,141,000;
Fiscal year 2003: $8,191,855;
Fiscal year 2004: $6,050,100.
State: Minnesota;
Fiscal year 2001: $632,500;
Fiscal year 2002: $3,967,500;
Fiscal year 2003: $7,621,904;
Fiscal year 2004: $5,173,069.
State: Mississippi;
Fiscal year 2001: $379,562;
Fiscal year 2002: $915,573;
Fiscal year 2003: $2,635,960;
Fiscal year 2004: $1,932,488.
State: Missouri;
Fiscal year 2001: $2,169,475;
Fiscal year 2002: $5,687,589;
Fiscal year 2003: $8,631,673;
Fiscal year 2004: $5,519,517.
State: Montana;
Fiscal year 2001: $1,148,850;
Fiscal year 2002: $1,322,500;
Fiscal year 2003: $2,373,933;
Fiscal year 2004: $1,118,812.
State: Nebraska;
Fiscal year 2001: $2,098,750;
Fiscal year 2002: $2,012,500;
Fiscal year 2003: $344,401;
Fiscal year 2004: $441,442.
State: Nevada;
Fiscal year 2001: $0;
Fiscal year 2002: $281,750;
Fiscal year 2003: $1,066,034;
Fiscal year 2004: $332,032.
State: New Hampshire;
Fiscal year 2001: $195,500;
Fiscal year 2002: $1,153,450;
Fiscal year 2003: $885,500;
Fiscal year 2004: $662,720.
State: New Jersey;
Fiscal year 2001: $3,450,000;
Fiscal year 2002: $4,018,157;
Fiscal year 2003: $1,454,572;
Fiscal year 2004: $1,397,110.
State: New Mexico;
Fiscal year 2001: $0;
Fiscal year 2002: $542,800;
Fiscal year 2003: $820,282;
Fiscal year 2004: $601,369.
State: New York;
Fiscal year 2001: $4,545,317;
Fiscal year 2002: $2,024,920;
Fiscal year 2003: $3,471,173;
Fiscal year 2004: $2,755,667.
State: North Carolina;
Fiscal year 2001: $4,231,540;
Fiscal year 2002: $6,619,170;
Fiscal year 2003: $9,159,118;
Fiscal year 2004: $7,246,224.
State: North Dakota;
Fiscal year 2001: $29,900;
Fiscal year 2002: $33,350;
Fiscal year 2003: $11,270;
Fiscal year 2004: $0.
State: Ohio;
Fiscal year 2001: $4,678,912;
Fiscal year 2002: $2,913,171;
Fiscal year 2003: $8,144,190;
Fiscal year 2004: $5,717,602.
State: Oklahoma;
Fiscal year 2001: $1,220,190;
Fiscal year 2002: $1,269,752;
Fiscal year 2003: $2,658,052;
Fiscal year 2004: $1,948,684.
State: Oregon;
Fiscal year 2001: $9,805,360;
Fiscal year 2002: $8,780,480;
Fiscal year 2003: $6,335,181;
Fiscal year 2004: $5,244,609.
State: Pennsylvania;
Fiscal year 2001: $10,867,500;
Fiscal year 2002: $8,245,500;
Fiscal year 2003: $32,707,004;
Fiscal year 2004: $23,725,215.
State: Rhode Island;
Fiscal year 2001: $1,957,593;
Fiscal year 2002: $4,934;
Fiscal year 2003: $959,973;
Fiscal year 2004: $764,425.
State: South Carolina;
Fiscal year 2001: $730,250;
Fiscal year 2002: $2,070,000;
Fiscal year 2003: $12,506,305;
Fiscal year 2004: $9,168,685.
State: South Dakota;
Fiscal year 2001: $270,250;
Fiscal year 2002: $347,300;
Fiscal year 2003: $629,480;
Fiscal year 2004: $461,488.
State: Tennessee;
Fiscal year 2001: $2,806,000;
Fiscal year 2002: $2,219,500;
Fiscal year 2003: $2,852,109;
Fiscal year 2004: $2,349,510.
State: Texas;
Fiscal year 2001: $8,232,418;
Fiscal year 2002: $6,389,309;
Fiscal year 2003: $15,058,242;
Fiscal year 2004: $11,211,282.
State: Utah;
Fiscal year 2001: $214,508;
Fiscal year 2002: $2,804,350;
Fiscal year 2003: $3,684,565;
Fiscal year 2004: $2,286,508.
State: Vermont;
Fiscal year 2001: $460,000;
Fiscal year 2002: $920,000;
Fiscal year 2003: $317,139;
Fiscal year 2004: $280,819.
State: Virginia;
Fiscal year 2001: $4,600,000;
Fiscal year 2002: $3,484,500;
Fiscal year 2003: $7,302,968;
Fiscal year 2004: $5,353,742.
State: Washington;
Fiscal year 2001: $7,736,280;
Fiscal year 2002: $4,450,500;
Fiscal year 2003: $21,243,827;
Fiscal year 2004: $15,412,748.
State: West Virginia;
Fiscal year 2001: $2,300,000;
Fiscal year 2002: $805,000;
Fiscal year 2003: $743,636;
Fiscal year 2004: $662,652.
State: Wisconsin;
Fiscal year 2001: $3,323,854;
Fiscal year 2002: $5,692,500;
Fiscal year 2003: $16,883,175;
Fiscal year 2004: $12,377,478.
State: Wyoming;
Fiscal year 2001: $140,000;
Fiscal year 2002: $16,985;
Fiscal year 2003: $64,898;
Fiscal year 2004: $0.
Reserve Funds;
Fiscal year 2001: -;
Fiscal year 2002: -;
Fiscal year 2003: -;
Fiscal year 2004: $55,000,000.
National Total;
Fiscal year 2001: $129,864,614;
Fiscal year 2002: $131,006,636;
Fiscal year 2003: $259,047,999;
Fiscal year 2004: $244,750,000.
Source: Department of Labor.
Note: State allocations in all fiscal years include funds reserved for
administration in addition to funds reserved for training. Allocations
for fiscal years 2001-2003, but not for fiscal year 2004, also include
amounts awarded for job search and relocation benefits.
[End of table]
[End of section]
Appendix V: Detailed Listing of Steps States Report Taking in Response
to Limited TAA Training Funds:
Table 9: Steps States Report They Have Taken in Response to Limited
TAA Training Funds, Fiscal Years 2001-2003:
State: Alabama;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Alaska;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Arizona;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Arkansas;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: California;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Colorado;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: Yes.
State: Connecticut;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: Yes.
State: Delaware;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Florida;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Georgia;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: Yes.
State: Hawaii;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Idaho;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Illinois;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Indiana;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Iowa;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: Yes.
State: Kansas;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Kentucky;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Louisiana;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Maine;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Maryland;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Massachusetts;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Michigan;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Minnesota;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Mississippi;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Missouri;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Montana;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Nebraska;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: Yes.
State: Nevada;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: New Hampshire;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: New Jersey;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: Yes.
State: New Mexico;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: Yes.
State: New York;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: North Carolina;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: North Dakota;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Ohio;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Oklahoma;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Oregon;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Pennsylvania;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: Yes.
State: Rhode Island;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: South Carolina;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: Yes.
State: South Dakota;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Tennessee;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Texas;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Utah;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Vermont;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Virginia;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Washington;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: West Virginia;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Wisconsin;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Wyoming;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
Total;
Developed new guidelines for enrolling participants: 18;
Obligated current year funds only for current year costs: 18;
Enrolled participants in shorter-term training: 22;
Placed participants on temporary waiting list for training: 19;
Reduced training cost limit per participant: 9.
Source: GAO survey of state workforce agencies.
Note: (Yes) indicates state has taken step at some point between fiscal
year 2001 and fiscal year 2003.
[End of table]
Table 10: Steps States Report They Have Taken or Anticipate Taking in
Response to Limited TAA Training Funds, Fiscal Year 2004:
State: Alabama;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Alaska;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Arizona;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Arkansas;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: a;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: California;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: Anticipates taking step
during fiscal year 2004.
State: Colorado;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: Yes.
State: Connecticut;
Developed new guidelines for enrolling participants: Anticipates
taking step during fiscal year 2004;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Anticipates
taking step during fiscal year 2004;
Reduced training cost limit per participant: No.
State: Delaware;
Developed new guidelines for enrolling participants: Anticipates
taking step during fiscal year 2004;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: No.
State: Florida;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Anticipates
taking step during fiscal year 2004;
Reduced training cost limit per participant: Anticipates taking step
during fiscal year 2004.
State: Georgia;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: Yes.
State: Hawaii;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Idaho;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Illinois;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Anticipates taking
step during fiscal year 2004;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Indiana;
Developed new guidelines for enrolling participants: Anticipates
taking step during fiscal year 2004;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Iowa;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Anticipates
taking step during fiscal year 2004;
Reduced training cost limit per participant: Yes.
State: Kansas;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Kentucky;
Developed new guidelines for enrolling participants: Anticipates
taking step during fiscal year 2004;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Anticipates
taking step during fiscal year 2004;
Reduced training cost limit per participant: No.
State: Louisiana;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Maine;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Anticipates
taking step during fiscal year 2004;
Reduced training cost limit per participant: No.
State: Maryland;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Massachusetts;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: Anticipates taking step
during fiscal year 2004.
State: Michigan;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Minnesota;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: Anticipates taking
step during fiscal year 2004;
Placed participants on temporary waiting list for training: Anticipates
taking step during fiscal year 2004;
Reduced training cost limit per participant: Yes.
State: Mississippi;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Missouri;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Montana;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Nebraska;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Anticipates taking
step during fiscal year 2004;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: Anticipates taking step
during fiscal year 2004.
State: Nevada;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: New Hampshire;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: Anticipates taking step
during fiscal year 2004;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: New Jersey;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: Yes.
State: New Mexico;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: Anticipates taking
step during fiscal year 2004;
Placed participants on temporary waiting list for training: Anticipates
taking step during fiscal year 2004;
Reduced training cost limit per participant: Yes.
State: New York;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: Yes;
Reduced training cost limit per participant: Anticipates taking step
during fiscal year 2004.
State: North Carolina;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: North Dakota;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Ohio;
Developed new guidelines for enrolling participants: Anticipates taking
step during fiscal year 2004;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: Anticipates taking
step during fiscal year 2004;
Placed participants on temporary waiting list for training:
Anticipates taking step during fiscal year 2004;
Reduced training cost limit per participant: Anticipates taking step
during fiscal year 2004.
State: Oklahoma;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Oregon;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Anticipates
taking step during fiscal year 2004;
Reduced training cost limit per participant: No.
State: Pennsylvania;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Rhode Island;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: Anticipates
taking step during fiscal year 2004;
Reduced training cost limit per participant: No.
State: South Carolina;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: South Dakota;
Developed new guidelines for enrolling participants: Anticipates taking
step during fiscal year 2004;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Anticipates taking step
during fiscal year 2004;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Tennessee;
Developed new guidelines for enrolling participants: Anticipates
taking step during fiscal year 2004;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: Anticipates taking step
during fiscal year 2004.
State: Texas;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Utah;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Vermont;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Virginia;
Developed new guidelines for enrolling participants: Anticipates
taking step during fiscal year 2004;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Anticipates taking
step during fiscal year 2004;
Placed participants on temporary waiting list for training:
Anticipates taking step during fiscal year 2004;
Reduced training cost limit per participant: No.
State: Washington;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: No;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: West Virginia;
Developed new guidelines for enrolling participants: Yes;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: Yes;
Placed participants on temporary waiting list for training:
Anticipates taking step during fiscal year 2004;
Reduced training cost limit per participant: No.
State: Wisconsin;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Yes;
Enrolled participants in shorter-term training: No;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
State: Wyoming;
Developed new guidelines for enrolling participants: No;
Obligated current year funds only for current year costs: Anticipates
taking step during fiscal year 2004;
Enrolled participants in shorter-term training: Anticipates taking step
during fiscal year 2004;
Placed participants on temporary waiting list for training: No;
Reduced training cost limit per participant: No.
Totals taken;
Developed new guidelines for enrolling participants: 21;
Obligated current year funds only for current year costs: 23;
Enrolled participants in shorter-term training: 17;
Placed participants on temporary waiting list for training: 6;
Reduced training cost limit per participant: 6.
Totals anticipate taking;
Developed new guidelines for enrolling participants: 8;
Obligated current year funds only for current year costs: 13;
Enrolled participants in shorter-term training: 10;
Placed participants on temporary waiting list for training: 12;
Reduced training cost limit per participant: 7.
Source: GAO survey of state workforce agencies.
Notes: (Yes) indicates state has taken step during fiscal year 2004.
The survey was fielded in March 2004, therefore these results reflect
steps states have taken during the first six months of fiscal year
2004 and steps states anticipate taking during the last six months of
fiscal year 2004.
[End of table]
[End of section]
Appendix VI: Demographic Characteristics of TAA Participants:
Through the Trade Act Participant Report (TAPR), states regularly
submit data to Labor on the demographic characteristics of TAA
participants. The data provided below are for participants who
completed program services or stopped receiving services between July
1, 2001, and June 30, 2002. These data include workers who received
services under either or both the TAA program and the NAFTA-TAA
program.
Table 11: Select Demographic Characteristics of Participants Exiting
TAA Program, July 1, 2001-June 30, 2002:
Sex: Female;
Percentage[A]: 55.
Sex: Male;
Percentage[A]: 45.
Age: Under 30 years;
Percentage[A]: 10.
Age: 30-45 years;
Percentage[A]: 41.
Age: 45 years and older;
Percentage[A]: 48.
Education: Less than high school;
Percentage[A]: 20.
Education: High school graduate;
Percentage[A]: 57.
Education: Some education beyond high school;
Percentage[A]: 23.
Average tenure on prelayoff job (in years);
Percentage[A]: 9.3.
Source: Department of Labor.
Note: Because these data are provided primarily for background
purposes, they were not independently verified.
[A] All percentages are based only on participants for whom data were
available.
[End of table]
[End of section]
Appendix VII: Comments from the Department of Labor:
U.S. Department of Labor:
Assistant Secretary for Employment and Training:
Washington, D.C. 20210:
AUG 26 2004:
Mr. Sigurd R. Nilsen:
Director:
Education, Workforce, and Income Security Issues:
U.S. Government Accountability Office:
441 G Street, N.W.:
Washington, D.C. 20548:
Dear Mr. Nilsen:
The Employment and Training Administration (ETA) is in receipt of the
draft Government Accountability Office (GAO) report, "Trade Adjustment
Assistance: Reforms Have Accelerated Training Enrollment, But
Implementation Challenges Remain," GAO-04-1012. The objectives of the
study were to determine: (1) how key reform provisions have affected
program services; (2) what have been the challenges in implementing new
provisions; (3) whether demand for TAA training has changed, and how
states are meeting this demand; and (4) what is known about what the
TAA program is achieving.
The report includes one recommendation for executive action. The
recommendation is that ETA monitor the implementation of certain
provisions of the TAA Reform Act that may have had unintended
consequences for some workers and that may require legislative changes.
These include the new training enrollment deadline, which may be
negatively affecting some workers, and the eligibility criteria for the
new wage insurance provision, which may be resulting in denial of
services to some older workers who could benefit from them.
We believe the enclosed technical comments can improve the final
report. If you would like additional information, please don't hesitate
to contact me at (202) 693-2700.
Sincerely,
Signed for:
Emily Stover DeRocco:
Enclosure:
[End of section]
Appendix VIII: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Dianne Blank (202) 512-5654 Lorin Obler (617) 788-0511:
Staff Acknowledgments:
Irene J. Barnett and Eric Clemons made significant contributions to
this report in all aspects of the work throughout the assignment. In
addition, Stuart Kaufman assisted in the design of the state survey,
George Quinn Jr. assisted in the analysis of survey data, Ray
Wessmiller assisted in the analysis of data collected from the
Department of Labor, and Shana Wallace contributed to the development
of the report's overall methodology. Jessica Botsford and Richard
Burkard provided legal support, and Corinna Nicolaou assisted in the
message and report development.
[End of section]
Related GAO Products:
Workforce Investment Act: States and Local Areas Have Developed
Strategies to Assess Performance, but Labor Could Do More to Help. GAO-
04-657. Washington, D.C.: June 1, 2004.
National Emergency Grants: Labor Is Instituting Changes to Improve
Award Process, but Further Actions Are Required to Expedite Grant
Awards and Improve Data. GAO-04-496. Washington, D.C.: April 16, 2004.
Workforce Investment Act: One-Stop Centers Implemented Strategies to
Strengthen Services and Partnerships, but More Research and Information
Sharing is Needed. GAO-03-725. Washington, D.C.: June 18, 2003.
Older Workers: Employment Assistance Focuses on Subsidized Jobs and Job
Search, but Revised Performance Measures Could Improve Access to Other
Services. GAO-03-350. Washington, D.C.: January 24, 2003.
Workforce Investment Act: Better Guidance and Revised Funding Formula
Would Enhance Dislocated Worker Program. GAO-02-274. Washington, D.C.:
February 11, 2002.
Workforce Investment Act: Improvements Needed in Performance Measures
to Provide a More Accurate Picture of WIA's Effectiveness. GAO-02-275.
Washington, D.C.: February 1, 2002.
Trade Adjustment Assistance: Experiences of Six Trade-Impacted
Communities. GAO-01-838. Washington, D.C.: August 24, 2001.
Trade Adjustment Assistance: Trends, Outcomes, and Management Issues in
Dislocated Worker Programs. GAO-01-59. Washington, D.C.: October 13,
2000.
FOOTNOTES
[1] The TAA program operates on a federal fiscal year basis, that is,
fiscal year 2004 runs from October 1, 2003 to September 30, 2004.
[2] Not all workers covered by an approved TAA petition are
individually eligible for TAA benefits and services. Individual
eligibility also depends on factors including the timing and duration
of a worker's layoff. In this report, when referring to workers
eligible for the TAA program, we generally mean workers who have been
certified as potentially eligible for the program.
[3] For more information on the TAA program see GAO, Trade Adjustment
Assistance: Trends, Outcomes, and Management Issues in Dislocated
Worker Programs, GAO-01-59 (Washington, D.C.: Oct. 13, 2000), and GAO,
Trade Adjustment Assistance: Experiences of Six Trade-Impacted
Communities, GAO-01-838 (Washington, D.C.: Aug. 24, 2001).
[4] Extended income support payments may be reduced based on other
income and training allowances.
[5] The four other reasons listed in the TAA statute are (1) worker
will be recalled by former employer, (2) worker is within two years of
retirement, (3) worker is unable to participate in training because of
health problems, and (4) approved training is either not available or
not available at a reasonable cost, or no training funds are available.
[6] Before the TAA Reform Act took effect, the maximum TAA waiver
duration was a worker's initial 26 weeks of extended income support.
Now, to qualify for the HCTC, workers may need waivers while they are
still receiving UI benefits and before they have even started to
collect extended income support. Labor has issued guidance to states
clarifying that the maximum waiver duration may now exceed 26 weeks if
a worker needs a waiver during the UI eligibility period and continues
to need a waiver throughout the initial 26 weeks of extended income
support.
[7] For more information on the one-stop center system, see GAO,
Workforce Investment Act: One-Stop Centers Implemented Strategies to
Strengthen Services and Partnerships, but More Research and Information
Sharing Is Needed, GAO-03-725 (Washington, D.C.: June 18, 2003).
[8] For more information on the national emergency grants program, see
GAO, National Emergency Grants: Labor Is Instituting Changes to Improve
Award Process, but Further Actions Are Required to Expedite Grant
Awards and Improve Data, GAO-04-496 (Washington, D.C.: April 16, 2004).
[9] The percentage of petitions processed within 40 days in fiscal year
2003 prior to implementation of the act was 20 percent.
[10] The reengineering is still in a planning stage. Draft plans are
currently under review at a number of levels at Labor. One of the goals
of the changes is to standardize certain operating procedures to guide
investigators' work and to ensure consistency among the investigators'
decisions, at least in areas where this is possible. The new process
would be computer-rather than paper-based, and would calculate a
recommended determination decision for the investigator based on
qualitative and quantitative data entered into a new computer system.
However, there would still be room for discretion on the part of Labor
officials, who could override the system's recommendations.
[11] The new deadline is in addition to the 210-day deadline that
predates the TAA Reform Act and is still in effect. The 210-day
deadline is no longer an issue for participants who have enrolled in
training within the new deadline, which they must meet before the 210-
day deadline.
[12] The previous NAFTA-TAA program had a training enrollment deadline
and did not allow waivers. Officials from one state we visited always
encouraged individuals to enroll in the regular TAA program rather than
the NAFTA-TAA program if they could--because these state officials
believed that the deadline was so problematic. The deadline was
expanded to cover the consolidated TAA program in an effort to focus
participants' attention on training.
[13] In an upcoming report we will be providing a more in-depth
analysis of the implementation of the HCTC provision of the TAA Reform
Act.
[14] The TAA Reform Act expanded eligibility specifically to secondary
workers who supply component parts to any firm directly affected by
trade. However, secondary workers who finish a product are only
eligible for TAA services if they finished a product produced by a firm
directly affected by trade with either Canada or Mexico.
[15] Labor was required to establish the wage insurance program by no
later than August 6, 2003, one year after the enactment of the TAA
Reform Act.
[16] During August and September 2003, the only months of fiscal year
2003 in which petitioners had the option to apply for wage insurance
benefits, there were 223 approved TAA petitions. Over 25 percent of the
approved petitions during this time period, therefore, included
approved requests for wage insurance benefits. There were 86 requests
for wage insurance benefits submitted on TAA petitions during fiscal
year 2003.
[17] The number of workers certified as potentially eligible and the
numbers receiving specific benefits and services include workers served
under the TAA and NAFTA-TAA programs.
[18] Other measures of demand also rose in fiscal year 2002, including
the number of workers who started collecting extended income support
benefits and the number who received job search allowances (see app.
III).
[19] The other four criteria are (1) the worker would benefit from the
training, (2) there is a reasonable expectation of employment following
the training, (3) the training is reasonably available from a public or
private provider, and (4) the worker is qualified to undertake and
complete the training.
[20] One Labor official and one state official we talked with also
mentioned other factors that may have contributed to periods of
training enrollment deferral, citing, for example, occasional delays
prior to fiscal year 2004 in Labor's response to states' requests for
TAA training funds.
[21] For fiscal year 2004, Labor allocated 80 percent of available
training funds based on the average amount of funds allocated to states
for TAA training in the previous 3 fiscal years, and 20 percent based
on the average number of program participants in each state for the
previous 3 years for which complete data are available. Labor plans in
future years to include in the formula factors related to states'
performance on program outcomes.
[22] For example, one model of coordination included in Labor's
guidance is to use WIA funds for case management and TAA funds for
training and income support.
[23] Labor awards national emergency grant funds to states to help them
respond to major layoffs.
[24] According to Labor, the amount of national emergency grant funds
awarded specifically to serve trade-affected workers was about $80
million in program year 2001, about $150 million in program year 2002,
and about $90 million in program year 2003. Program years run from July
to June; for example, while fiscal year 2003 ran from October 1, 2002
to September 30, 2003, program year 2003 ran from July 1, 2003 to June
30, 2004.
[25] The ES is a nationwide system of public employment offices
established by the Wagner-Peyser Act. ES staff provide services to job
seekers and employers, including job search assistance, job referral,
and job placement assistance. Federal Wagner-Peyser funds are allocated
to each state to help support its ES staff.
[26] In addition to WIA local formula funds and WIA national emergency
grant funds, states also reported using WIA rapid response and
statewide activities funds to support case management for TAA-eligible
workers. States may reserve up to 25 percent of their WIA dislocated
worker allocations to provide rapid response services intended to help
laid-off workers transition quickly to new employment. States may also
reserve up to 15 percent of their WIA allocations to provide a variety
of other statewide activities for workers.
[27] A state's Eligible Training Provider List contains all training
course offerings that are available to WIA-funded individuals eligible
for training. To remain on the list, training providers must meet
certain performance criteria established by the state.
[28] In previous reports we have described how performance measures
create a disincentive to enrolling various populations in WIA-funded
case management and training, including older workers and dislocated
workers with high prior wages. See for example GAO, Older Workers:
Employment Assistance Focuses on Subsidized Jobs and Job Search, but
Revised Performance Measures Could Improve Access to Other Services,
GAO-03-350 (Washington, D.C.: Jan. 24, 2003) and GAO, Workforce
Investment Act: Improvements Needed in Performance Measures to Provide
a More Accurate Picture of WIA's Effectiveness, GAO-02-275 (Washington,
D.C.: Feb. 1, 2002).
[29] See GAO-01-59.
[30] Mathematica Policy Research, Inc., International Trade and Worker
Dislocation: Evaluation of the Trade Adjustment Assistance Program,
submitted to the U.S. Department of Labor (April 1993).
[31] Office of the Inspector General, U.S. Department of Labor,
Improving the Trade Act Programs (DOL Office of Audit Report Number 04-
01-009-03-330, Sep. 26, 2001).
[32] Not all states use WRIS to report WIA performance. In a recent
study, we found that 38 states currently participate in WRIS. GAO,
Workforce Investment Act: States and Local Areas Have Developed
Strategies to Assess Performance, but Labor Could Do More to Help,
GAO-04-657 (Washington, D.C: June 1, 2004).
[33] See GAO-04-657.
[34] TAA performance measures provide information to support Labor's
performance goals under the Government Performance and Results Act
(GPRA). GPRA is intended to focus government decision making,
management, and accountability on the results and outcomes achieved by
federal programs.
[35] Labor's reported data are compiled from TAPR data. Outcome data
for 2003 are based on participants who exited either the TAA or NAFTA-
TAA program from July 1, 2001 to June 30, 2002. As a result, these data
do not reflect program outcomes for participants served under the
provisions of the TAA Reform Act, who would have been certified as TAA-
eligible on or after November 4, 2002.
[36] A more recent study found that generally trade-affected workers as
compared with other dislocated workers are more likely to be women and
older. As a result of these characteristics, these types of workers are
more likely to face barriers to reemployment (Lori Kletzer, Job Loss
from Imports: Measuring the Cost, Washington, DC: Institute for
International Economics, 2001).
[37] In 2004 the Office of Management and Budget (OMB) reviewed the TAA
program through its Program Assessment Rating Tool (PART). OMB rated
the program as ineffective based in part on the fact that the existing
studies, including those of Labor, questioned whether the program was
effective in helping program participants get back into suitable jobs.
[38] According to Labor officials, because random assignment is not
possible in the TAA program, the impact study will use quasi-
experimental methods that compare outcomes of different groups of TAA
participants to those of comparison groups. The study will use
propensity scoring, a technique that allows researchers to find
comparison group members who are most closely matched to participants
on a number of characteristics simultaneously.
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