BLS surveys mass layoffs and plant closings in 1986 - Bureau of Labor Statistics

Monthly Labor Review, Oct, 1987 by Lewis B. Siegel

BLS surveys mass layoffs and plant closings in 1986

The Department of Labor has transmitted to the Congress the first annual report on the Bureau of Labor Statistics permanent mass layoff and plant closing reporting system.1 The report presents the results of the 1986 data collection and analysis as required by Section 462(e) of the Job Training Partnership Act.

Data collected during 1986 show that, for the 11 States that submitted data in the program for the full year, a total of 1,335 layoff events2 occurred in 926 establishments. This resulted in the separation of 274,343 workers from their jobs; 85 percent (233,199) of these workers filed claims for unemployment insurance benefits. In about 10 percent of the layoffs, the plants closed. The 11 States were Alabama, Arizona, Arkansas, Louisiana, Massachusetts, Nevada, New Mexico, Oklahoma, Texas, Washington, and Wisconsin. The relationships depicted by the mass layoff data should not be considered to be necessarily representative of the Nation as a whole.

The incidence of mass layoffs in manufacturing industries far exceeded that in any other major industry grouping. (See table 1.) About 2 out of 3 manufacturing layoffs occurred in the durable goods sector, with the largest percentage taking place in the machinery industry (29 percent), followed by transportation equipment and electrical equipment (15 percent each). Among nondurable goods industries, 2 out of 3 layoffs were in the food and apparel industries. Among nonmanufacturing industries, establishments in the construction and mining industries were most likely to have layoffs, accounting for 5 out of 10 nonmanufacturing layoffs.

"Slack work' was cited most often (31 percent of the time) by employers as the reason for layoff events. "Seasonal work' accounted for an additional 20 percent of the layoff situations, followed by "contract completion' and "energy-related disruptions.' It is interesting to note that only about 2 percent of the layoffs were directly attributed to "import competition.'

The data available from the mass layoff program not only provide information on the establishments having the layoff events, but also on the characteristics of two groups of workers directly affected by the layoffs--the initial claimants for unemployment insurance benefits and those who have exhausted their regular unemployment insurance benefits. Initial claimants are those who file for unemployment insurance benefits as the result of some employment termination. Benefit exhaustees are persons whose regular unemployment insurance benefits have expired.

Of the 233,199 initial claimants in the 11 States, about 1 of 7 were black, 1 of 10 were Hispanic, 1 of 4 were women, and 1 of 10 were over 55 years of age. A total of 49,968 persons exhausted their regular unemployment insurance benefits after being separated from a qualifying establishment. Greater proportions of the exhaustees were black (about 1 of 5) and Hispanic (1 of 8).

The permanent mass layoff and plant closing program is a Federal-State cooperative program that uses a standardized, automated approach to identifying, describing, and tracking the effect of major job cutbacks, using data from each State's unemployment insurance database. Establishments that have at least 50 initial claims filed against them during a 3-week period are targeted for contact by the State agency to determine the permanency of these separations, the total number of persons separated, and the reasons for these separations. Establishments are identified by industry and location and detailed socioeconomic characteristics of unemployment insurance claimants, such as age, race, sex, ethnic group, and place of residence, are noted. The program yields information on the entire period of insured unemployment of individuals, to the point where their regular unemployment insurance benefits are exhausted.

As indicated previously, 11 States provided data in the program for all of 1986; by the second half of that year, 26 States were fully participating. (Data are also provided in the report for those 26 States, aggregated over the last half of 1986.) Currently, 47 States and the District of Columbia are participating in the program.

Copies of the report to the Congress are available from the Bureau of Labor Statistics, Division of Local Area Unemployment Statistics, 441 G Street, NW, Room 2083, Washington, DC 20212.

1 For related information, see SharonP. Brown, "How often do workers receive advance notice of layoffs?' Monthly Labor Review, June 1987, pp. 13-17.

2 The reporting system covers layoff events of 30 days or more in which at least 50 initial claims for unemployment compensation were filed in a 3-week period by separated workers against their former employer.

Table: 1. Mass layoff events, separations, and initial claimants for unemployment insurance, by selected industries, January-December 1986