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Technical information: (202) 691-6378 USDL 02-483
http://www.bls.gov/cps/
For release: 10:00 A.M. EDT
Media contact: 691-5902 Wednesday, August 21, 2002

WORKER DISPLACEMENT, 1999-2001

During the January 1999 through December 2001 period, 4.0 million
workers were displaced from jobs they had held for at least 3 years, the
Bureau of Labor Statistics of the U.S. Department of Labor reported today.
The number of displaced workers increased from 3.3 million in January 1997
through December 1999. The more recent period includes the recession that
began in March 2001 and the resulting slowdown in the labor market. In
contrast, the prior survey covered a period of strong employment growth and
declining unemployment.

Since 1984, the Employment and Training Administration of the U.S.
Department of Labor has sponsored surveys that collect information on
workers who were displaced from their jobs. These surveys have been
conducted biennially as supplements to the Current Population Survey (CPS),
a monthly survey of households that is the primary source of information on
the nation's labor force.

Displaced workers are defined as persons 20 years of age and older who
lost or left jobs because their plant or company closed or moved, there was
insufficient work for them to do, or their position or shift was abolished.
The period covered in this study was 1999-2001, the 3 calendar years prior
to the January 2002 survey date. The following analysis focuses primarily
on the 4.0 million persons who had worked for their employer for 3 or more
years at the time of displacement (referred to as long-tenured). Another
6.0 million persons were displaced from jobs they had held for less than
3 years (referred to as short-tenured). Combining the short- and long-
tenured groups, the number of displaced workers totaled 9.9 million, up
from 7.6 million in the prior survey. Results from the January 2002
survey included the following highlights:

--Nearly two-thirds of the long-tenured displaced were reemployed at
the time of the survey.

--Nearly half of the long-tenured displaced workers cited plant or
company closings or moves as the reason for their displacement.

--Forty-three percent of displaced workers who had worked for their
employer for 3 or more years had received written advance notification
that their jobs would be terminated. Those who had received advance
notice, however, were no more likely to be reemployed in January 2002
than were those who had not received advance notice.

--One-third of long-tenured displaced workers lost jobs in manufacturing.
This proportion continued to be much larger than the industry's share of
long-tenured employees. (Long-tenured employment is defined as the number
of persons employed for 3 years or more as measured by the CPS supplement on
job tenure.)

--Just over half of long-tenured workers who were displaced from full-
time wage and salary jobs and who were reemployed in such jobs had earnings
that were lower than those on the lost job. Among this group of reemployed
full-time workers, about 3 in 10 experienced earnings losses of 20 percent
or more.

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Characteristics of the reemployed

Sixty-four percent of the 4.0 million long-tenured displaced workers
were reemployed when surveyed in January 2002. The proportion unemployed
at the time of the survey was 21 percent. The remaining 15 percent of long-
tenured displaced workers were not in the labor force. (See table 1.)

In January 2002, reemployment rates for workers ages 20 to 24 and those
in the central-age group (ages 25 to 54) were roughly the same--about 70
percent. By comparison, reemployment rates were lower for older workers
ages 55 to 64 (51 percent) and 65 years and older (20 percent). Large
proportions of older displaced workers were not in the labor force when
surveyed.

Men and women's shares of displacement were about equal to their shares
of long-tenured employment. In January 2002, men and women had similar
reemployment rates, 65 and 62 percent, respectively. Women were slightly
less likely to be unemployed than men, but the proportion of displaced
women who had left the labor force, at 19 percent, was higher than for
men--12 percent.

In January 2002, whites (65 percent) were more likely to be reemployed
than either blacks (58 percent) or Hispanics (55 percent).

Reason for job loss and receipt of advance notice

Of those long-tenured workers displaced from January 1999 through
December 2001, 47 percent lost or left their jobs due to plant or company
closings or moves, 25 percent cited insufficient work as the reason for
being displaced, and 27 percent reported that their position or shift was
abolished. (See table 2.) These proportions were about the same as those
reported in the prior survey.

More than 4 in 10 displaced workers received written advance notice
that their jobs would be terminated. In January 2002, workers who lost
jobs due to plant or company closings or moves were most likely to have
received written advance notice of their impending job loss. Of this
group, 55 percent received such notice; in comparison, 38 percent of
workers displaced because of shift abolishment and only 26 percent of
those who lost jobs due to insufficient work were notified in advance.
Regardless of the reason for displacement, receipt of written advance
notice appears to have had little impact on the likelihood of being
reemployed in January 2002. Reemployment rates were essentially the
same for those who did and those who did not receive advance notice--63
and 64 percent, respectively. (See table 3.)

Industry and occupation

As in prior surveys, manufacturing accounted for a disproportionately
large share of displaced workers. During the 1999-2001 period, 1.3 million
factory workers were displaced from their jobs--one-third of all long-tenured
displaced workers. This share was much higher than manufacturing's 19 percent
share of total long-tenured employment. Manufacturing displacements were
concentrated in durable goods industries, particularly in machinery. (See
table 4.)

Displacements in wholesale and retail trade (723,000) accounted for 18
percent of all long-tenured workers displaced during the 1999-2001 period.
Long-tenured displaced workers in transportation and public utilities
(295,000) and in finance, insurance, and real estate (284,000) each
accounted for 7 percent of total displacement.

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The reemployment rate for displaced manufacturing workers was 56 percent,
lower than the overall reemployment rate for displaced workers. (These work-
ers were not necessarily reemployed in the same industries from which they
were displaced.) Reemployment rates for workers displaced from the other
major industry groups ranged from 62 percent for workers displaced from con-
struction and from transportation and public utilities to 71 percent for work-
ers who lost jobs in finance, insurance, and real estate and in government.

The occupational composition of displaced workers was similar to that
recorded in the 2000 survey. In the January 2002 survey, persons in mana-
gerial and professional specialty jobs accounted for 30 percent of all long-
tenured displaced workers. This proportion is slightly less than this
occupational group's share of total long-tenured employment. Workers
displaced from technical, sales, and administrative support occupations
comprised 29 percent of all displaced workers, matching their share of
total long-tenured employment. In contrast, operators, fabricators, and
laborers were disproportionately affected by job loss. These workers made
up 19 percent of the long-tenured displaced, but only accounted for 14
percent of total long-tenured employment. Workers in these occupations
tend to be employed in manufacturing. (See table 5.)

The proportion of displaced workers who had found new jobs when surveyed
was highest for mechanics and repairers (82 percent) and lowest for machine
operators, assemblers, and inspectors (49 percent).

Geographic divisions

Compared with the prior survey, the number of workers displaced in each
geographic division in the United States increased during the 1999-2001
period. The distribution of displacement among the divisions, however,
was about the same as in the prior survey. In terms of employment status
at the time of the January 2002 survey, the Pacific and Middle Atlantic
divisions had the largest proportions of displaced workers who were
unemployed in January 2002--28 and 24 percent, respectively. Displaced
workers in these divisions also were least likely to have found new
jobs; the reemployment rate for workers in the Middle Atlantic division
was 54 percent and in the Pacific division was 60 percent. (See table 6.)

Earnings

Of the 2.3 million reemployed displaced workers who lost full-time wage
and salary jobs during the 1999-2001 period, 1.9 million were working again
in such jobs in January 2002. Of these reemployed full-time workers, about
48 percent were earning as much or more in their new jobs as they had earned
on the job they lost. This was lower than the proportion recorded in the
February 2000 survey (58 percent). In January 2002, 29 percent reported
earnings losses of 20 percent or more. (See table 7.)

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Total displaced workers (with no tenure restriction)

The total number of workers displaced during the 1999-2001 period
(regardless of how long they had held their jobs) was 9.9 million, more
than the number displaced during the 1997-99 period--7.6 million. Nearly
two-thirds of the total displaced had found new jobs when surveyed in
January 2002, while 22 percent were unemployed and 14 percent were not in
the labor force. (See table 8.)

Compared with the long-tenured displaced workers, the short-tenured were
more likely to be young and to have lost jobs in services and retail trade.