Episode 750: Retraining Day

Jan 27, 2017

Trade has winners and losers. The winners are American consumers. We all get cheaper goods from abroad. American companies benefit too; they sell more products overseas, even hire extra workers. But there are also people who lose, and those people tend to lose big and lose in big groups. In parts of the country, factories have been closing and jobs have been moving overseas for decades.

So to make trade really benefit everyone, there's this idea that makes a lot of sense. Take some of the money, some of the gains, from the people who are better off because of trade and give it to the losers. This isn't just a theoretical idea. It's an entire government program.

Since 1974, the Trade Adjustment Assistance (TAA) program has been helping workers who have lost their jobs due to trade policy. TAA is sometimes called the Cadillac of retraining programs. In one sense, workers who lose their jobs to trade are in a far better position than workers who lose their jobs to pretty much anything else: recession, bad management, whatever. Because if they lose their jobs to trade they can qualify for TAA and that means the government will help them find a job in an industry that isn't dying. TAA will pay for school, relocation and job-seeking expenses, pretty much whatever it takes to help a former factory worker find a new job that won't be outsourced.

So why don't we hear more about this program? Why does it seem like there's nothing left behind for workers after a factory closes up because of trade?

On today's show, we visit one of the cities where trade has had a big impact: Erie, Pennsylvania. When General Electric downsized a locomotive factory in Erie, 1,500 people lost their jobs. Many of them were eligible for TAA benefits. Things aren't going so smoothly, though. We try to find out why.

Music: "The Long Haul" and "Happy Faces." Find us: Twitter/ Facebook.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

NOEL KING, HOST:

Alex Goldmark.

ALEX GOLDMARK, HOST:

Noel King.

KING: I want to talk for half a second about something that President Trump said in his inaugural address.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

KING: He even got kind of poetic at one point, talking about...

(SOUNDBITE OF ARCHIVED RECORDING)

TRUMP: Rusted-out factories scattered like tombstones across the landscape of our nation.

KING: And he's not totally wrong, but he's also not totally right. In parts of this country, yes, factories have been closing and jobs have been moving overseas for decades. But trade doesn't just take jobs. Any economist will tell you trade makes the country better overall. American consumers get to buy cheaper goods, and American companies sell more stuff overseas.

GOLDMARK: And there is this idea that I love. And that is if you can just take just a little bit of the money from the people who are doing better because of trade and you can give it to the losers - the workers in the rusted-out factory, say - then it should, in theory, make trade help everyone.

KING: And this is not just an idea. This is an actual federal government program for laid-off workers. It's been around since 1974. And here's how it works. If you can prove that you lost your job to trade policy, the government is going to help with money, with cash, but they are also going to try and help you find a job in an industry that is not dying.

GOLDMARK: It is called Trade Adjustment Assistance. It's like you have been adjusted out of a job. We're going to assist you. Everyone just calls it TAA.

KING: I wanted to see how TAA works in real life, so I went to Erie, Pa., which is a city that has lost a lot of jobs to trade. A lot of factories closed. The TAA program is run out of this little job center in what used to be a strip mall. The job center's called CareerLink. So I was down there last Wednesday. I was talking to people. Everybody was really nice, maybe a little tense. And I was going to go back the next day to talk some more people, but I got a text message saying, no, no, don't come because...

(SOUNDBITE OF ARCHIVED RECORDING)

TRACI TEUDHOPE: I'm Traci Teudhope. A man calls threatening to blow up CareerLink.

KING: They had a bomb threat.

(SOUNDBITE OF ARCHIVED RECORDING)

TEUDHOPE: Executive director Rick Cornwell says there were two phone calls made this morning, a man threatening to open fire and blow the place up. Erie police are in the process of searching the building for any suspicious materials. Cornwell believes both phone calls came from the same man who they believe is a disgruntled client.

KING: People in Erie are so frustrated that one of them, at least, threatened to blow up a job center. Hello, and welcome to PLANET MONEY. I'm Noel King.

GOLDMARK: And I'm Alex Goldmark. And today on the show - why would anyone want to blow up a place trying to get people jobs in Erie, Pa.?

KING: We're going to go to Erie. We're going to meet some people there. And we're going to find out - are these workers really forgotten?

(SOUNDBITE OF MUSIC)

KING: Erie is way out in northwestern Pennsylvania. It's a long, low city that's set on the edge of Lake Erie. And, Alex, can I tell you something about Erie?

GOLDMARK: I've only been there once. Lay it on me.

KING: I loved Erie, Pa.

GOLDMARK: OK.

KING: I loved it. First thing is people who are from Erie rep Erie so hard. This one night I was going back to my hotel. I got in a taxi, and the taxi driver took me to the wrong hotel because he said my hotel was a crappy hotel and he wanted me to see that Erie had nicer places to stay. That's awesome.

GOLDMARK: (Laughter) So he was like TripAdvisor but with veto power?

KING: Exactly. Exactly. I actually - I did see one guy being rude. He was being condescending to a waitress at Applebee's. But then he went back and he apologized to her.

GOLDMARK: So even the one rude person turned out to be a nice person?

KING: Yes. This is Erie.

GOLDMARK: OK.

KING: (Laughter).

GOLDMARK: But you were there to meet the workers who had lost their jobs and were part of this retraining program.

KING: Mick Borland is one of those guys. He's 60 years old, but he looks about 15 years younger. He was wearing work pants and work boots and a Carhartt jacket, and he had this amazing T-shirt with a tiger airbrushed on it and the tiger is, like, drinking from a stream.

Favorite shirt of yours?

MICK BORLAND: Just one of many.

KING: Mick worked at General Electric for eight years. GE has this big plant in Erie. They make locomotives there. Mick was a crane operator. And then last year GE laid off 1,500 people. And just to give you a sense of the scale, Erie only has 100,000 residents. Mick was on the shop floor working, and he says his bosses came down and they hand him something.

BORLAND: They give us a piece of paper saying that we're being laid off.

KING: What does the piece of paper say? Does it just say sorry, you're fired?

BORLAND: No, sorry, you're unemployed (laughter).

GOLDMARK: Mick has been in manufacturing since he was 25. Before that he was a carpenter. And he's been watching the jobs dwindle. He's been doing what he can, but when he gets that piece of paper he knows his life is about to change.

KING: And then he gets invited to the meeting.

GOLDMARK: The meeting.

KING: Yeah. He and the other laid off workers are told, come on out. We're going to set you down for a seminar. And that seminar is run by this guy.

So tell me, what's your name?

JOE MICELI: Joe Miceli.

KING: Spell your name for me.

MICELI: M-I-C-E-L-I.

KING: So Irish.

MICELI: (Laughter) Italian.

KING: (Laughter).

GOLDMARK: Joe is the program supervisor for workplace programs. That is his fancy title there at the job center in Erie. And he works directly with a lot of people who lost their job to trade. So he knows their names, he knows their faces. And when there's a big layoff like the one at GE, Joe, he's like the first line. His first move is to tell the workers that there is this thing called Trade Adjustment Assistance.

KING: So in the case of GE, they bring in hundreds of people, as many as will fit, into the local union hall. It's a big room like a courtroom. It's got a lot of folding chairs. And there's this enormous mural on the back wall. It's, like, one hundred years of union history. Now, Joe is a large guy. He's a quiet guy. And now he's got to get up in front of 500 angry, worried, about-to-be-laid-off people.

MICELI: And this whole noise fills the whole room. It really just blurs the vision, that many people moving, talking and doing everything at once.

KING: So he's be super careful about everything, right down to what he's wearing - in this case, jeans.

MICELI: You can't dress up too much. You're not a suit. You don't come into the room of union workers of blue collar workers of America wearing a suit, telling them that they're going to lose benefits.

KING: You wear a tie?

MICELI: No tie.

KING: A tie makes you look like a suit.

MICELI: Absolutely. You're one of the workers. You're with them.

KING: He gets up on stage, he clears his throat to get everyone's attention.

MICELI: And all of those 300 or 500 faces first look at you. The responsibility hits you.

KING: He starts by acknowledging this really sucks. You are a victim of the global economy. But he says here's some good news, kind of. He gives everyone a blue booklet. It's a copy of the Trade Adjustment Assistance Act. And he explains because your job has been lost to trade, you get to take advantage of these benefits. You might not feel lucky, but you're pretty lucky. Joe's boss has a way of describing this, and you should just hear it directly from him.

RUBEN PACHET: This is the - what we call the Cadillac of all training programs.

GOLDMARK: This is Ruben Pachet. He oversees what's called Trade Act training in Pennsylvania. He knows the benefits inside and out. He has spent years explaining them to people. And he will tell people, if you qualify for TAA, the federal government will pay in full for your schooling for up to two and a half years - trade school, community college, wherever you want to go. As long as you are in school or retraining, you will get a check in the mail. It's like an unemployment check, but it doesn't cut off until you are retrained for a new job. If you want to retrain on the job, then the government will pay for you to have an apprenticeship.

KING: You also get some money to go looking for work. They'll pay for gas and food and lodging as long as you're on the road looking for a job. And here's a big one - if you're willing to leave Erie, if you can get a job outside the city, the federal government will pay for you to move anywhere in the U.S. Here's Ruben.

PACHET: So far during my tenure, the furthest we've relocated someone would be Puerto Rico. They got a job as a biologist (laughter).

KING: Really?

PACHET: Yeah. Bilingual, so that helped him a lot, and the company hired him in Puerto Rico, so we relocated his family to Puerto Rico.

GOLDMARK: These are the kinds of stories that Joe and Ruben tell at the meeting in the union hall. And when they're done, and they've finished their spiel, all the workers - they start rushing over, and they say - when do my unemployment checks start coming in? When do I have to register for school by? And Ruben and Joe - they tell them come on down to the job center. That's where we will help you figure out what you're going to do for the rest of your life.

KING: And once they're there, someone like Ruben sits down with them, pulls up a list of jobs and says, these are the ones we think are not going to go away.

PACHET: We have a list of high-priority occupations that, with the case manager, the worker can review and if the occupation that I want - I'm able to get a job afterwards.

KING: So if I'm looking at that list, and I say, I want to be an X-ray technician, they're going to look and say, oh, yeah, X-ray technician is right up at the top. If I tell them, I want to be a trapeze artist, they're going to look and say, no, trapeze artist is not on there. We are not going to pay for you to train.

PACHET: And the way we would show that just so that we're not stepping over a person's dream is - let's look at the labor market information in your area. And the labor market information in your specific area - you know, how many trapeze jumpers are there? How many jobs are available? And because there aren't any, let's look at something that perhaps, you know, may interest you a bit more.

KING: You, like, nudge them toward X-ray technician.

PACHET: Yes.

KING: Look at - look at that one (laughter). It's a little like being on a trapeze.

PACHET: Exactly, exactly.

GOLDMARK: And this all costs more money than a regular unemployment program, so a company has to prove that their laid off workers deserve it. The Department of Labor makes the company apply and prove to the government that, yes, these jobs were lost because of trade - not a recession, not bad management, but trade. And six in 10 companies that apply don't get it. But in this case, GE - for this factory - they applied. They passed. And so Mick and his coworkers - they're going to get TAA, and they are headed to retraining for one of those new jobs on the list, which means back to school.

KING: Here's the thing about colleges and technical schools. They want your records. They want your transcripts. A lot of these people have been out of school for a long time. They're not kids. Joe Miceli was telling me about this one woman. She got laid off from GE. She decided to take advantage of the benefits.

MICELI: She goes to apply to different schools, and the first thing that they want is her high school transcripts. Well, she went to a small private high school in Pittsburgh which has since closed down and burned down.

(LAUGHTER)

MICELI: So she...

KING: That's unlucky.

MICELI: She's very persistent. She gets on Facebook, and she finds a teacher. And from the teacher, she finds the director, and the director is now a 92-year-old man in a nursing home. And she calls him on the phone, and he remembers her.

KING: Did she get her transcript?

MICELI: She still can't get the transcript.

KING: I went back, and I checked in with Joe about her. She never did find her transcript, so she picked a different training program.

GOLDMARK: OK, but hopefully she is an outlier, and most people are able to enroll in school.

KING: Yes. They enroll in schools like the Erie Institute of Technology. I took a drive down there one night to meet with Mick Borland, the guy with the great tiger T-shirt. So the school's in another strip mall. It was 6 o'clock. It was dark out. It was raining a little bit. And when I got inside, class had just let out, and all these people flooded into the halls. And it's so weird because it's a technical school, and so I was expecting young guys. And there were - there were a few of them, but most of them were grown men. And not just grown men - they were old men. So grabbed Mick and two of his friends who had also been laid off from GE.

Is there a room we can borrow for just a couple minutes?

UNIDENTIFIED MAN: Sure.

KING: And then we'll bounce out.

UNIDENTIFIED MAN: Sure.

KING: Will that one in the corner work? There?

UNIDENTIFIED MAN: Yeah, yeah. It's a - yeah. Is it unlocked?

KING: All three of these guys are retraining in HVAC - heating, ventilation and air conditioning. And, you know, HVAC is not simple. It's like thermodynamics. You have to understand how pressure affects temperature. You have to tell what's inside of a closed system. It's solid science. Now, Mick is 60, and he has not taken a science test in 40 years. So sometimes when he's in class, he thinks about that meeting in the union hall where they explain the benefits, and they tell you about the retraining. And he thinks about one of the other workers who raised his hand and then said basically what Mick had been thinking.

BORLAND: I believe he said he was 63 or 63 and a half and said that he just wanted to get his unemployment, not have the expense of going to school or spend time in school, which was my thoughts, also.

KING: You're 59 at this point.

BORLAND: Yes, 59 - and I knew that by this time when I had to start school, I'd be 60. And they told us we were not allowed to do that. To get the benefit, we had to come to school. So it's costing the federal government the cost of our school to be here when some of us don't want to be.

GOLDMARK: But this program is specifically designed not to be early retirement. It is designed to give them their best shot at a new and better job.

KING: But then in the classroom, these guys were telling me they are sitting next to Austin.

GOLDMARK: Austin.

KING: And everybody wanted to talk about Austin because Austin is not on TAA. Austin is going to be 20 next month. Here's Mick's friend Greg Lucas.

You guys look at the 20-year-olds, like, out of the side of your eye and think that's competition.

GREG LUCAS: I feel sorry for him.

KING: Why?

LUCAS: Because when I was 20 years old, I had a good job. I could sustain a house with a family. These young kids today in Erie - they don't have a chance. They don't have a chance to start. I don't - I feel bad for them.

KING: But let's be real. After they all graduate, unless someone in this equation is willing to leave Erie, these guys are going to be competing with Austin for jobs.

GOLDMARK: And Ed is 53, and Mick is 60, and Greg is 62. And you can tell that they have all done this math. Here's Mick again.

KING: Do you expect to get a job in HVAC?

BORLAND: That's my goal because that's part of retraining - is you have to have a goal.

KING: You're smiling a little bit like you don't really believe it, though.

BORLAND: Well, I'm going to be 61 years old. How many people are going to hire me at 61?

GOLDMARK: If they want to keep collecting unemployment, they need to be in class. That's the rule. So they come to class. They work hard, and they count on those checks. But as if things weren't hard enough, Pennsylvania cut 500 workers from the department that runs the TAA program. The unemployment checks - they're now going out four, five, six weeks late.

KING: And now the job center in Erie is swamped with people who want to know - where is my money? So these guys just keep calling. Mick's friend Ed Frigett (ph) showed me his phone.

Whoa. On January 10, you called that number 54 times. Are you getting through?

ED FRIGETT: Busy signal. Utility company's calling me. My mortgage company - I don't have money to pay my mortgage.

KING: You really don't.

FRIGETT: No. I have to call him tomorrow and make arrangements because I have no money to pay it.

KING: So here's where we're at - no job, no money, no one to call about it and no idea what you're going to be doing in 12 to 18 months. This benefit program was supposed to mitigate some of that, but it's like these guys are feeling it more than ever. Maybe you can see how someone might break down.

GOLDMARK: Which brings us back to - whatever happened to that bomb threat?

KING: Well, they told me not to go down there. So the first thing I did was to go down there.

GOLDMARK: Because you're a reporter.

KING: (Laughter) Right, exactly. So by the time I got there, everyone had been evacuated. Place was empty. There was just a little sign on the door that said, you know, please come back tomorrow.

GOLDMARK: And that's basically what it feels like to go through this program for these guys, it seems. And this is the best that we can do for people who have lost their jobs to trade.

KING: Yes. Right now, this is the best federal program.

GOLDMARK: I mean, one solution could be to just make TAA way bigger - to offer it to way more people, to make it easier for more companies to get on TAA, to just give out a lot more money through it. Another idea is to just stop - to say this idea doesn't work. We can't take a little bit of the money from the people who benefit from trade, give it to the losers and have everybody better off.

KING: Yeah. And this in a way is the Donald Trump camp, right? He thinks trade itself is the problem. He wants to fight trade, so he's thrown out the Trans-Pacific Trade Agreement. He's rethinking NAFTA. And all of this is supposed to help people like Mick and his friends.

GOLDMARK: Of course, when you talk to economists, they say hold on. No, it is not that simple. Most of the jobs done by people like Mick, they'll say - they aren't going to foreign workers. They're just vanishing as factories get more automated, or they move within the U.S. So, for instance, GE build a brand new plant in Fort Worth, Texas, where there is no union, so there's lower pay.

KING: And so Erie, Pa., like its workers, is going to have to reinvent itself. With TAA or without TAA, you just can't fight the world economy.

(SOUNDBITE OF MUSIC)

GOLDMARK: If you work at a place that is being changed because of trade or is getting ready to change because of, say, NAFTA changing, we want to hear from you. We want to hear the details. Send us an email to planetmoney@npr.org or find us on Facebook or on Twitter. We are @PlanetMoney.

KING: Today's show was produced by Sally Helm with an assist from Nick Fountain. Thanks, guys. Our editor is Bryant Urstadt. We have a lot of people to thank for this episode. Two economists helped us out with interviews and research. They are Jooyoun Park at Kent State University, and Kara Reynolds at American University. Thanks also to Sara Goulet at the Pennsylvania Department of Labor, Dan Ford (ph) at Independent Pattern, Scott Slawson of UE 506. And thanks to everyone at CareerLink in Erie.

GOLDMARK: If you're looking for another podcast to try, check out the NPR Politics Podcast. It's hosted by a great team of NPR reporters and has clear, smart, funny coverage of what is going on in Washington. They will help you make sense all of it. Find it at npr.org/podcasts or wherever you get your podcasts. I'm Alex Goldmark.

KING: And I'm Noel King.

MICELI: Retraining - it transforms individuals. I've seen one of the scariest guys you'd ever meet - you know, just a large man - lumberjack physique - comes up to me a year and a half later, and he's clean cut. He's wearing his scrubs, and I barely recognize him. And that's the kind of transformative process this Trade Act can perform on people.

KING: That guy was a GE guy?

MICELI: That guy was not. That was Sharon Tube (ph). Transcript provided by NPR, Copyright NPR.