Lessons from past trade adjustment policies to support displaced workers in the era of artificial intelligence - Equitable Growth

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RESEARCH<br>March 11, 2026

Lessons from past trade adjustment policies to support displaced workers in the era of artificial intelligence

AI, tech, & the economyEconomic InequalityInequality & MobilityLabor

AUTHORS:

Jacob Leibenluft

Key takeaways

Anticipating that trade and globalization could displace workers, lawmakers and experts established Trade Adjustment Assistance more than 60 years ago in an effort to address that potential harm. Yet the program did not live up to its intentions, failing to reach many of the workers it was designed to assist—with significant economic and political consequences.<br>The history of the program offers lessons for policymakers when addressing future job displacement, particularly job loss that might be caused by artificial intelligence. Along with taking steps to limit the magnitude and consequences of displacement in the first place, these lessons include ensuring policy solutions are deployed that match the scale of any disruption, making speed paramount in the delivery of any assistance, and supporting the ability of individual workers affected by AI displacement to chart their own futures amid job dislocations.<br>Policymakers should also focus on developing high-quality training models that prepare workers for in-demand jobs, compensation and adjustment efforts that go hand-in-hand, better data tools to help policymakers and analysts understand where displacement is occurring and how the job market might evolve, and appropriate place-based policies even if job loss is geographically dispersed.

Overview

More than 60 years ago, U.S. policymakers, economists, and labor leaders alike agreed that the potential for new economic forces to strengthen U.S. prosperity and security was just over the horizon. But the risk, as they understood it, was that even amid the possibility of higher growth that might benefit the nation as a whole, some workers might face severe harm. Whether out of moral obligation or to prevent the risk of political backlash, the question then was how to help these workers successfully adjust to a new economic normal.

This question was a central one in the debate over how to expand U.S. global trade in the 1950s and 1960s. That debate over how to balance the gains and losses that come from global trade rages on today. But squint, and a similar specter looms over new advances in artificial intelligence, which pose both hopes for massive gains in productivity and fears about the potential to replace a broad array of blue- and white-collar jobs. While emerging research has offered inconclusive—and, at times, contradictory—assessments of the potential extent of labor market dislocation from AI, even the possibility of significant displacement has sparked new debates about how it might reshape U.S. politics and how policymakers might respond.

Lessons from past trade adjustment policies to support displaced workers in the era of artificial intelligenceDownload

Often lost in today’s discussion, however, is that even though politicians, experts, and the general public over the past century did not fully anticipate the nature or extent of previous economic dislocations, they were nonetheless engaged in conversations similar to those happening today. Those conversations acknowledged the risks that forces such as increased global trade, technological advancement, or the energy transition could lead to greater overall prosperity but also result in significant harm for a sizable minority of people and places. The question is why, despite this awareness, the efforts that came out of those conversations turned out to be largely unsuccessful—especially with respect to trade and globalization.

Among workers and in communities most affected by an upsurge in imports earlier this century, the economic and political consequences are still being felt today, as economists David Autor at the Massachusetts Institute of Technology, David Dorn at Zurich University, and Gordon Hanson at Harvard University spell out in their contribution to Equitable Growth’s economic populism series.1 As noted elsewhere in that series, an emerging research base provides evidence that a failure to effectively respond to economic disruption—and perceived threats of displacement—fueled the rise of right-wing populism both in the United States and in other advanced economies.

This paper explores one notable effort to address displacement: Trade Adjustment Assistance. While policymakers have pursued efforts to help workers facing targeted displacement due to a variety of causes—from agricultural dislocation during the Great Depression of the 1930s to the impact of environmental regulations on coal miners and loggers since the 1990s—Trade Adjustment Assistance is the policy with the longest, and arguably most studied, history.

After a discussion...