In my 2016 book, Failure to Adjust: How Americans Got Left Behind in the Global Economy, I told the story of how economic globalization caught the United States off-guard. For most of our history, we were a reasonably self-sufficient economy, with an expanding domestic market that was more than large enough to exploit economies of scale. So as trade, global travel, and financial integration began to grow explosively in the 1960s, the United States was slow to recognize that it needed to adapt its institutions to the new realities.
One of the most telling examples is the program known as Trade Adjustment Assistance (TAA). It was launched by President John F. Kennedy in 1962 with the explicit goal of helping to support and retrain those who would lose jobs as a result of the coming acceleration of global competition that Kennedy and future presidents embraced. “When considerations of national policy make it desirable to avoid higher tariffs,” Kennedy said, “those injured by that competition should not be required to bear the full brunt of the impact.”
Despite the soaring rhetoric, the program was stillborn–under-funded by Congress and overly restrictive from the start. When the surge in Chinese imports in the early 2000s contributed to the loss of millions of manufacturing jobs, only a small fraction of displaced workers received TAA. Far more exited the labor market entirely through programs such as Social Security disability.
TAA is only one example of where U.S. institutions are poorly designed to deal with disruptive change, which has been accelerating over the past several decades. Whether the causes are trade competition, financial crises, job-displacing automation, or an unexpected and lethal pandemic that spreads across the world, the United States sorely lacks the capacity to help its citizens manage these shocks.
Two of the most glaring deficiencies are the absence of sick leave for a significant portion of the workforce, and an unemployment benefits system that requires companies to fire their employees before those workers have access to any government aid. The first has helped undermine efforts to contain the virus, and the second means that economic recovery in the United States is likely to be especially prolonged.
Chosen excerpts by Job Market Monitor. Read the whole story @ After the Pandemic: Can the United States Finally Retool for the Twenty-First Century? | Council on Foreign Relations