With the rise of global trade in the early 1960s, free-trade advocates needed a way to overcome domestic resistance to trade liberalization. Their response was the Trade Adjustment Assistance (TAA) program, which provided income support, retraining and even relocation stipends for workers displaced by trade.
The program was amended several times over the subsequent decades to meet new challenges and has ended up serving more than 5 million workers since its inception.
But while well-intended, the act has not always lived up to its promise and, in the process, has contributed to the waning support for free trade, according to an unpublished study coauthored by Kyuwon Lee, an Assistant Professor at the USC Dornsife College of Letters, Arts, and Sciences.
During a presentation at a recent PIPE Collaborative meeting, Lee noted that some workers have had to wait months, instead of the statutory limit of 40 days, to receive their benefits. The PIPE Collaborative is a university-wide research endeavor jointly sponsored by the USC Price School’s Bedrosian Center and the Office of the Provost.
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Find Out More“The problem is the bureaucracy frequently delayed the delivery of benefits, and then we pretty much know that these delays threaten the economic security of beneficiaries,” Lee said.
Nearly 60% of Americans now say that the country has lost more than it has gained from increased foreign trade, according to a Pew Research Center survey conducted in April.
“Bureaucratic delays in delivering compensation can erode citizens’ confidence in the government’s ability to protect them from the adverse consequences of international trade, reducing their support for international integration,” Lee’s paper states.
Lee acknowledges that red tape, corruption, other bureaucratic hurdles, and poor targeting of affected workers may also be contributing to the fading support of international trade. And, perhaps more than any other factor, Lee said, support for globalization has been undermined by the perception that it led to the loss of manufacturing jobs – even if evidence shows that it is not the leading cause.
Nearly 5 million manufacturing jobs have been eliminated since the late ’90s. The nearly 13 million manufacturing jobs reported by the Bureau of Labor Statistics this August is up from a low of nearly 11.5 million in 2010, but well below their peak of more than 17.5 million in 1998.
Lee’s paper – which she wrote with Carlos Felipe Balcazar, a Postdoctoral Associate at Yale University – also noted that workers who experience delays tend to blame whoever is president, rather than the civil service workers who manage the program.
“The problem is the bureaucracy frequently delayed the delivery of benefits, and then we pretty much know that these delays threaten the economic security of beneficiaries.”
Kyuwon Lee
“We also find that delays increased support for Trump back in the 2016 election,” Lee said, noting that Trump took aim at globalization and the damage it had done to American manufacturing, a theme that also animated the 2024 election.
“Our findings have important implications in the current era of rising populism, as populist politicians might leverage signs of bureaucratic hurdles in these government programs to politically mobilize their supporters, further undermining international integration and the legitimacy of bureaucracies,” she said.
Lee said her next step is to examine how these populists might disseminate the information about bureaucratic hurdles to voters and how voters would respond to such information.
