Economic adjustment assistance programs are also available for distressed communities, regardless of what has caused the adverse economic condition. The Community Adjustment and Investment Program was established as a result of the 1993 North American Free Trade Agreement Implementation Act. Trade-related Layoffs Hurt Case Study Communities

The six communities we selected for our case studies varied in size, demographics, and location, but they all had experienced major trade- related industry and job losses in the mid- to late-1990s. However, local program administrators told us that these programs have structural problems that hinder the effective delivery of services. One issue is related to the profile of the dislocated workers, a significant percentage of whom were in their 40’s, had not finished high school, and needed remedial courses before they could start a degree or certificate program. TAA and NAFTA-TAA Dislocated Workers Present Training Challenges

The profile of dislocated workers that emerged from our visits and discussions with program administrators, training providers, and small groups of dislocated workers is consistent with the Labor Department’s available national data on TAA and NAFTA-TAA dislocated workers. However, many did not have a high school diploma or a General Equivalency Degree (GED), and few businesses would hire them without one or the other. Local Views on Trade-Impacted Communities’ Access to Federal Funds

Officials in the communities believe that they are limited in their ability to obtain federal economic adjustment assistance and cite a number of reasons. Trade adjustment assistance program administrators and training providers in the communities said that program rules regarding income support benefits limit their flexibility in addressing dislocated workers’ training needs. Local officials learned that the necessary training infrastructure must be in place to meet dislocated workers’ needs. Eventually, grant managers began offering workers monetary incentives to leave training and take available low- skilled jobs. Assistance to Dislocated Workers

We found that many trade-impacted workers did not enroll in training. Specifically, we examined (1) the impact of trade-related layoffs on these communities, (2) the experiences of these communities with dislocated worker assistance, (3) their experiences with economic adjustment assistance, and (4) the lessons learned from these communities’ experiences. To address all of these objectives, we conducted case studies in six communities.
Why GAO Did This Study

This report reviews trade adjustment assistance and other assistance programs, such as the North American Free Trade Agreement Transitional Adjustment Assistance (NAFTA-TAA) program, to determine if they have helped distressed communities deal with the adverse impacts of trade. GAO conducted case studies in six such trade-impacted communities, all of which experienced major trade-related plant closures and layoffs in the mid- to late-1990s.

What GAO Found

Two communities lost a large percentage of local jobs in sudden plant closures and experienced economic crises. The other communities experienced rolling layoffs or a series of smaller plant closures that dislocated as many or more workers but did so gradually. Experiences in the communities GAO visited indicate that Temporary Adjustment Assistance (TAA) and NAFTA-TAA assistance to dislocated workers, although substantial, could be implemented more effectively. Program administrators and training providers in each community said that the programs have structural problems that impede effective service delivery. One factor that influenced the implementation of training benefits in many communities is that a significant percentage of dislocated workers needed to earn a high school equivalency degree or take remedial courses before they could even start a training program. Case study communities' experience with economic adjustment showed that the assistance available to them was limited and that there are no easy answers to community recovery, even when funds are available. These communities had relied on low-skilled manufacturing jobs, which are disappearing, and now face the difficult task of diversifying their economies while addressing fundamental human capital issues. These communities' experiences with efforts to assist dislocated workers and adjust to changing economic conditions offer several lessons. Program administrators and training providers said that bureaucratic rigidities in dislocated workers programs limited their flexibility in addressing dislocated workers' diverse training needs. Also, local officials believe that dislocated worker training programs are more effective and job placements much higher when strong links exist between training and local business needs.