Summary

Many Americans who lose their jobs to foreign competition never receive the retraining and other help that is due them in making the transition to new employment because the Labor Department's process in certifying their eligibility for assistance is flawed. To be eligible for the Trade Adjustment Assistance program, which helps workers find new employment through job counseling, retraining, and placement assistance, an individual must work in an industry affected by imports, as certified by the Department of Labor. Problems in the program's certification process raise questions about how Labor determines worker eligibility. Flaws in Labor's petition investigations and limited state aid to workers may lead to petitions' going unfiled or to erroneous decisions on whether to provide program assistance to workers. Although specific improvements in the certification process can be made, Labor's need to determine worker eligibility quickly makes it unclear how much improvement is realistic without changing the process. The President has proposed combining all dislocated worker programs into a single program delivering services to all such workers regardless of the reason for dislocation. This proposal would eliminate the need for certifying workers as affected by imports, but it may also cut the benefits available to workers now being served under the program.

GAO found that: (1) between 1990 and 1991, 63 percent of the TAA petitions filed contained investigative flaws; (2) flawed investigations denied workers needed assistance or resulted in non-qualified workers receiving benefits; (3) the three steps in the TAA investigative process included determining whether company sales had decreased and if a significant number of workers lost their jobs, determining whether imports or competitive products had increased, and determining whether imports significantly contributed to the company's decline in sales and production; (4) major flaws in the TAA certification process included incomplete, inaccurate, or unsubstantiated data collection, incorrect or omitted analyses of trade statistics, and inadequate or omitted customer surveys; (5) investigative flaws were attributed to time and schedule constraints resulting in data collection and review shortcuts; (6) during 1990 and 1991, few investigative determinations were appealed; (7) states with a high rate of workers filing petitions expended greater amounts of resources on outreach programs, program specialists, and rapid response teams; (8) states with low filing rates provided few outreach services, had undertrained and overworked staff, and lacked adequate program information distribution; and (9) Labor denied those TAA petitioners who provided services or produced component parts for companies directly affected by imports.