Economic Report of the President

Similar conclusions arise from examination of data on the trade or “currentaccount” balance (the broadest measure of the difference between exports andimports of goods, services, and income flows). From 1960 to the third quarterof 2004, the current account balance moved from a surplus of 0.5 percent ofGDP to a deficit of roughly 5.6 percent of GDP. Yet the average unemploymentrate in 2004 was 5.5 percent, the same as the average unemploymentrate in 1960. Over this period, the U.S. economy gained more than75 million jobs—an increase of roughly 140 percent. Increased trade hasneither inhibited overall job creation nor contributed to an increase in theoverall rate of unemployment.That factors other than trade are the most important influences on thelabor market is of no consolation to a worker who loses a job because ofcompetition stemming from international trade. To assist people facing suchdislocation, the Administration has built upon and developed programs tohelp workers acquire the skills needed to prosper in new jobs.The Administration has proposed a reform of the overall workforce trainingsystem to help Americans obtain marketable skills needed to compete for jobsin emerging and innovative fields. The Administration recognizes that effectiveworkforce training requires the cooperation of the private sector andcommunity colleges and has worked to nurture these partnerships throughthe High Growth Job Training Initiative at the Department of Labor andthrough the recently-enacted Community-based Job Training Grants.In addition, the Administration has proposed the establishment of PersonalReemployment Accounts, an innovative approach to worker retraining. Withthese accounts, qualifying individuals who lose their jobs would receive anaccount with funds that can be used for training and other services that bestfit their needs. Individuals who find new employment relatively quicklywould be eligible to keep the balance of their accounts as a cash reemploymentbonus. The accounts would thus provide both support to unemployedworkers and an incentive to find new employment.The Administration has also worked to enhance the long-standing TradeAdjustment Assistance program, which provides training and income supportto workers directly hurt by import competition. As part of the Trade Act of2002, eligibility was extended to workers indirectly affected by trade, such asworkers employed by firms that supply goods and services to industriesdirectly affected by trade competition. Benefits were enhanced to include ahealth insurance tax credit and a wage supplement for older workers whofound new jobs that did not pay as well as their previous jobs. This assistance,which will total $12 billion over 10 years, will ease the adjustment fordisplaced workers and help them move into jobs for which their skills aremost in demand.Chapter 8 | 177