Bill looks to boost unemployment benefits for tech workers hit by offshoring

It also proposes job training help, tax break on health insurance

High-tech workers who lose their jobs because of offshore outsourcing would be eligible for up to two years of unemployment insurance, job training and a substantial tax break on health insurance under legislation introduced Monday in the U.S. Senate.

The bill, proposed by Sens. Max Baucus (D-Mont.), who chairs the Senate Committee on Finance, and Olympia Snowe (R-Maine), seeks sweeping changes to the federal government's Trade Adjustment Assistance (TAA) program. As it now stands, the TAA program largely excludes IT staffers, call center employees and other service workers from the extended unemployment help that the government offers to blue-collar workers whose jobs are offshored to lower-wage countries.

The new legislation, officially called the Trade and Globalization Adjustment Assistance Act of 2007, would rewrite the TAA policies and make them far broader. In a statement, Snowe said the U.S. has a responsibility to help service workers because the government's trade liberalization initiatives are a policy choice. "We therefore have an obligation to ensure that the costs are not borne by the most vulnerable workers alone," she said.

Marcus Courtney, president of the Seattle-based Washington Alliance of Technology Workers, said the Senate bill would "help expand a safety net for workers that have lost their jobs due to globalization."

But helping high-tech and other service workers make the transition after losing their jobs doesn't necessarily mean that they will get better or even equivalent jobs, Courtney said. Most high-tech workers who have been affected by offshoring moves "end up finding jobs that pay less than their previous positions," he said, adding that many never return to traditional full-time employment but instead work as contractors.

For most people, unemployment insurance runs out after six months. TAA unemployment benefits can last as long as two years, but recipients must also be enrolled in training programs, which the government finances.

Among the changes being proposed by Baucus and Snowe is an increase in the health care tax credit that the government provides to TAA recipients. The program now provides a 65% tax credit on health care costs; the bill filed yesterday would increase that credit to 85%.

The program also provides wage insurance for workers who take new jobs that pay less than their previous ones did. Under TAA, the government would subsidize 50% of the difference between the old and new wages for up to two years. For instance, if a person were making $45,000 prior to being laid off, and then took a new job that pays $40,000, the government would supplement the worker's income by $2,500. The Senate bill would increase the income limit to qualify for the wage insurance from $50,000 to $60,000.

The training aspect of the program was designed for vocational training. It won't cover the cost of obtaining a graduate degree that a high-tech worker might seek, said Howard Rosen, executive director of the Trade Adjustment Assistance Coalition in Washington.

"Traditionally, this program has been helping people with high school [diplomas] who have been working in the steel mill," said Rosen, who thinks that the training limitations are a weakness in the proposed legislation.

One high-tech employee who sought TAA benefits after his job was outsourced is James Fusco, a former mainframe worker at IBM. After Fusco's job was moved to Canada, he was laid off in 2002. Fusco was originally denied TAA benefits, and he ultimately filed a class-action lawsuit that led to a decision by the U.S. Department of Labor last year to include programmers under the TAA program.

Testifying before the House Committee on Ways and Means, Fusco told lawmakers that had he been approved for the TAA's benefits, "I would have pursued a more intensive and comprehensive program of training, and would have had the opportunity to compete for jobs involving newer programming skills like Java and .Net."

Copyright © 2007 IDG Communications, Inc.

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