More State Economic Development Plays

Economic research finds that job loss from import competition can be overstated -- most job dislocation comes from the business cycle or technological change. But the same research often shows that workers hurt by import competition often include some of America's most vulnerable workers. Victims of trade-related job loss are on average older, less educated, and more likely to live in relatively remote areas dependent on a few businesses for employment. When regions like these are hit by plant closings, the combination means that workers can have a tougher time finding new jobs, risk large drops in income, and often need special attention. Imaginative policies like those developed by former Governor Mark Warner in Virginia early in this decade, and built upon by newly elected Governor Tim Kaine, can help them retrain, find new jobs, and thus cushion blows to individual workers and communities.

In Virginia, the apparel and textile industries -- which nationwide have shed almost 900,000 jobs since 1995, and two million since the 1970s -- has many such workers and has suffered a series of recent plant closings. For example, five major plant closings between 1999 and 2002 cost the Martinsville, Va., area 9,000 textile jobs . To help empower laid-off workers with the tools they need to regain economic security, former Gov. Mark Warner launched an innovative approach to provide emergency aid and advice. Called the "Economic Crisis Strike Force," the initiative deploys rapid and specialized assistance to displaced workers and communities hurt by large layoffs. In early 2006, Gov. Tim Kaine introduced and signed legislation making the "Strike Force" a permanent entity.

Rather than establish large new bureaucracies or programs to deal with such economic disasters, the Strike Force creates Coordinated Economic Relief Centers (CERCs) in affected communities by bringing together existing traditional state assistance services, local authorities, and non-governmental service providers. The CERCs are set up through close collaboration with officials and community leaders in affected localities and placed in areas convenient for rural residents. Services and information include assistance with job search and placement, information about community college training programs, aid from private and nonprofit groups, emergency assistance for child care, medical bills, and home heating. CERCs make these programs more accessible and less confusing for people in need.

Governor Warner opened and operated four CERC facilities during his tenure in Marion, Martinsville, South Boston, and Clarksville. Since making the program permanent, Governor Kaine has opened a CERC in the Galax / Twin County region of Southwest Virginia. This CERC, operating throughout 2006 and the summer of 2007, has provided 8,600 people with training, referral, unemployment assistance, child care and food stamps, and other services, including direct job placement for over 400.

The program has won Governor Kaine and Governor Warner widespread praise from laid-off workers, national and local press, as well as business and community leaders.

With job loss an inevitable downside of technical change and a dynamic business cycle, policymakers need proven tools to aid and empower workers and communities hurt by large layoffs. By coordinating a comprehensive response and facilitating collaboration between various disparate government agencies charged with assisting displaced workers, Virginia gives some of its most economically vulnerable constituents the tools they need to recover and develop financial security again.

Resources for Action

The Governor's Economic Crisis Strike Force
www.governor.virginia.gov/MediaRelations/NewsReleases/2006/Mar06/0316.cfm

Additional Reading

Idea of the Week: Reinventing Trade Adjustment Assistance for Workers, Democratic Leadership Council, April 12, 2002
http://www.dlc.org/ndol_ci.cfm?contentid=250382&kaid=131&subid=207

PPI Trade Fact of the Week: Trade-Related Job Losses in the United States: 1 Percent of Total Layoffs? June 15, 2005
www.ppionline.org/ppi_ci.cfm?knlgAreaID=108&subsecID=900003&contentID=253391

Contacts

David N. Smith
Deputy Secretary of Commerce and Trade
P.O. Box 1475
Richmond, VA 23218
(804) 786-7831
(804) 371-0250 (fax)
david.smith@governor.virginia.gov

Ed Gresser
PPI Trade and Global Markets Project
Progressive Policy Institute
600 Pennsylvania Avenue, SE, #400
Washington, D.C. 20003
(202) 547-0001
egresser@ppionline.org