Position, Policy, and Participation: TAA Wage Replacement All-Time High

According to the editors of Investopedia.com, a fact-checked online financial education journal repository that helps readers understand complex investment information, employers must increase the prices they charge for the goods and services they provide after an increase in wages to maintain profits. It’s also a well-known fact that employers lean favorably towards increasing wages to attract and retain the right talent and to fill high-demand positions where low labor supply is a problem.

While it is the employer’s position that drives wage increase, at the same time, the forecast and attainment of a wage increase is rooted in various international and domestic policies (out of which TAA derived). The TAA program hit an all-time, first in history, high for Wage Replacement rate in FY 2022 with a national rate of 96.1%. This result is nearly a 16-percentage point increase over the previous year as the following Table 1 shows. Also below in Table 2, Participants Who Changed Industry Sector, indicates that the Wage Replacement rate increase does not appear to be directly tied to a change in industry sector as this indicator had no significant increase in outcomes in the same period. More research is needed on my part to make an accurate claim about the relationship between the two.

Table 1: TAA Wage Replacement

Table 2: Participants Who Changed Industry Sector

TAA trends show that various segments of the Adversely Affected Worker population garners strong employment-related success thanks to its engagement in TAA training, benefits, and services. For wage replacement particularly, participants aged 30 or under saw earnings of 122.7 percent, meaning they earned 22.7 percent more than their pre-participation earnings. Similarly, TAA participants aged 30 through 39 and 40 through 49 also earned more post-TAA participation, with earnings often exceeding 90 percent of original earnings. However, for the fifty and older population the earnings rate drop is deep, but the good news is this landing may be softer by enrolling in RTAA, if eligible.

Overall, the wage replacement percentage for all TAA participants remains strong at 96.1 percent, confirming that TAA Program participation (aided by policy support and employers’ favorable position towards higher wages) gets American workers back on path to the prosperity they’re working to obtain.   

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• Posted by: Katie Mehle
• Posted in: Trade Adjustment Assistance for Workers