A social safety net for the impact of technical change : an evaluation of the Myers Committee's adjustment assistance proposal / J.H. Cassing and A.L. Hillman.

Abstract

This paper assesses the "social safety net" proposal by the Myer's Committee Report on Technological Change as a program aimed to ameliorate the losses of individuals adversely affected by technical progress. The point is made that while the safety net is geared toward retrenched employees moving through the unemployment pool, much of the actual loss from unanticipated technical progress is taken as written down capital values by immobile factor owners tied to the old technology. In the end, the safety net amounts to little more than increased unemployment benefits which do not compensate many of the injured parties. Some of the arguments for treating certain factor owners asymmetrically are scrutinized and the experiences of Australia and the United States with Committee Report on Technological Change as a program aimed to ameliorate the losses of individuals adversely affected by technical progress. The point is made that while the safety net is geared toward retrenched employees moving through the unemployment pool, much of the actual loss from unanticipated technical progress is taken as written down capital values by immobile factor owners tied to the old technology. In the end, the safety net amounts to little more than increased unemployment benefits which do not compensate many of the injured parties. Some of the arguments for treating certain factor owners asymmetrically are scrutinized and the experiences of Australia and the United States with similar trade adjustment assistance schemes are recounted. Show more