Those attitudes are fueled largely by political pressure from Big Labor. Despite a sound U.S. economy and historically low unemployment rate of 4.7 percent, liberals have swallowed the union-made Kool-Aid and embraced the claim that free trade hurts the middle class. In fact, the contrary is true. Research from the Institute for International Economics shows that the typical (middle class) family of four saves around $10,000 per year, thanks to the lower tariffs that result from free trade. And there’s a bonus. Because their money goes further due to trade-lowered pricing, families are able to buy more, triggering economic growth and creating new jobs.
Yet despite the well-known benefits of free trade, Rangel and about 40 co-sponsors were able to ram their Trade and Globalization Assistance Act through the House with little resistance. Rather than reform the current program, the new initiative makes it worse by expanding it and giving the government an even greater role.
One of the biggest flaws of the Rangel bill is its expansion of the nanny state. The current program offers trade-displaced workers job training and unemployment benefits for two full two years. The Rangel bill would let some workers stay out of the workforce for up to three years, collecting taxpayer-funded unemployment benefits all the while. (Older workers could qualify for cash handouts if they take a lower-paying job.)
It's unclear how displaced workers will benefit from taking a three-year hiatus from real-life work experience, but that's exactly the approach favored by many “progressives.” An alternative, advocated by Rep. Jim McCrery (R-La.), takes an "earn and learn" approach that allows workers to hold a full-time or part-time job and receive training simultaneously, using the same logic as nighttime higher-education classes for full-time workers. McCrery’s bill also attempts to streamline operations at the U.S. Department of Labor so that it is reoriented to provide workers with the services they desire instead of the services favored by Washington bureaucrats.
No one in Congress argues that the government should “abandon” American workers. But given the relatively minimal number of jobs displaced by international trade each year -- loosely estimated at only 3 percent of all jobs lost in any given year -- Rangel's extravagant plan to expand the job-training program to service workers makes little sense. The administration estimates this expansion would instantly increase eligibility for the program by at least 30 percent.
American workers in all segments of the economy face far greater challenges than free trade. To name just two, there’s the need to keep up with new technologies and to identify and respond to changes in consumer behavior. Those challenges are hard.
But politicians vastly prefer easy targets to hard challenges, and the unions have made free trade an easy -- albeit inappropriate -- target.