Laid-off Tech Workers
Seek Government Benefits 

PETER LOFTUS / Dow Jones Newswires 29aug03

Software developer Jim Fusco wonders why he should be treated any differently from a factory worker.

Mr. Fusco, who was laid off from International Business Machines Corp. in Piscataway, N.J. last year, attributed the layoff to IBM's transfer of information-technology jobs to overseas. IBM spokesman Clint Roswell said the company is continuously "rebalancing" its work force, which operates in more than 160 countries.

Mr. Fusco applied for job-training assistance and weekly cash payments under a federal program for people who lose their jobs due to increased imports or the transfer of jobs overseas. Begun in the 1960s, the Trade Adjustment Assistance program was designed to soften the blow to U.S. workers—typically in manufacturing—of expanding global trade.

But Mr. Fusco's application was rejected by the Labor Department, which oversees the program. The department ruled the service he provided at IBM didn't qualify as a product that could be imported. With some exceptions, only workers who make products that are subject to import duties, such as clothing or furniture, can be certified for the program's benefits.

"High-tech workers are sometimes denied certification because they don't produce a product," said Lorette Post, a spokeswoman for the Labor Department.

In the past year, laid-off service workers at several other technology firms have been denied federal job-training benefits, according to Labor Department data. They include former workers from Intel Corp., Electronic Data Systems Corp., Computer Sciences Corp. and Earthlink Inc.

Mr. Fusco and others argue that they are as deserving of benefits as the workers who do qualify, like those in manufacturing.

Some employers agree. IBM believes the extension of TAA benefits to information-technology services workers would be a "good idea," Mr. Roswell said.

"We would endorse the expansion of the program" to include service workers, said Sean Healy, spokesman for EDS, a large computer-services company in Plano, Texas. "The U.S. economy is now more of a service economy than a manufacturing economy."

Both EDS and IBM provide job-training assistance to departing employees, their spokesmen said. An Earthlink spokeswoman declined to comment. Officials from Computer Sciences and Intel couldn't be reached.

The Labor Department doesn't break out the number of laid-off tech workers who have been denied benefits. An informal review of Labor Department data shows that TAA benefits were denied to workers laid off from among eight large technology companies in more than 20 cities. A minimum of three workers from a single work location are necessary to apply for benefits. The former employees had mostly worked in IT services.

Under the Labor Department program, laid-off workers receive vouchers to pay for job-training classes for as much as two years. They can also get weekly cash payments while they're in training, which average more than $200 and kick in after regular unemployment compensation runs out.

An expansion of the program to include IT service workers isn't likely anytime soon. Last year, Congress expanded the benefits to include new categories of workers, lengthen the period for cash benefits, and give tax credits to help buy health insurance.

The Senate, under Democratic control last year, had proposed expanding the Labor program to include some categories of service workers, but it was stripped out of the final bill. The expansion that went into law is expected to triple annual spending on the program to $1.2 billion.

The General Accounting Office, the investigative arm of Congress, said in early August it would study issues related to the IT offshore outsourcing and its effect on the U.S. job market. The study was requested by Rep. Adam Smith, a Washington Democrat, and is supported by labor unions.