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Fewer Workers May Have Lost Jobs Without Notice Last Year, Survey Shows

May 27, 1988

WASHINGTON (AP) _ The number of people losing their jobs to mass layoffs or plant closings appears to have declined sharply last year, but one in four of them still exhausted their unemployment benefits before finding new work, the government said Thursday.

On the heels of President Reagan’s veto of a trade bill because it would require large companies to give workers 60 days advance notice of such layoffs, the Labor Department said the number of people losing their jobs in such a fashion in 1987 dropped 28 percent from 1986 in 11 states.

In 1987, a total of 195,950 workers were caught up in mass layoffs or plant closings in the 11 states, compared with 272,436 workers in 1986, the Bureau of Labor Statistics said in its first comprehensive report on the issue.

The number of plant closings or mass layoffs - defined as 50 or more workers in any three-week period - dropped by nearly one-third, from 1,370 in 1986 to 941 last year, the bureau said.

″The improvement reflected the overall economic expansion (in which) employment was up by 10 percent and the number of persons unemployed was down by 8 percent in those 11 states,″ the bureau said.

The 11 states - Alabama, Arizona, Arkansas, Louisiana, Massachusetts, Nevada, New Mexico, Oklahoma, Texas, Washington and Wisconsin - account for about 25 percent of the nation’s total employment.

Congress in 1983 ordered Labor Department statisticians to start conducting the survey after the nation’s unemployment rate soared to 11.4 percent and the rolls of the unemployed grew to 12.5 million during the first two years of Reagan’s administration.

Since then, the jobless rate has dropped to 5.4 percent - the lowest since 1974 - with fewer than 7 million people now out of work in the longest peacetime economic expansion in U.S. history.

While 1986 figures were available for only 11 states, the 1987 figures cover 29 of them, representing 55 percent of the nation’s workforce.

Lewis Siegel, the Labor Department economist in charge of coordinating the effort, said figures were being collected this year for 49 states, excluding only Oregon.

Of the 406,887 workers in the 29 states who lost their jobs last year to mass layoffs or plant closings, 78 percent or 319,343 filed claims for unemployment insurance beefits, indicating they did not have a new job lined up when they lost their old one.

The government tracked those people through state employment offices and found that 85,548, or more than one-fourth of them, exhausted their unemployment benefits - an average $139 a week with a 26-week maximum in most states - before finding new work.

The report was hailed by advocates of the 60-day advance notice requirement that Reagan cited as a major reason why he vetoed the 1,000-page trade bill on Tuesday.

″With that kind of advance notice, many of these people would have had an opportunity to seek new jobs while currently employed and would likely not have had to draw unemployment insurance,″ said John Zaluskey, an economist for the AFL-CIO.

The advance notice provision was approved by Congress after surveys by the Labor Department and the General Accounting Office showed two of every three U.S. workers caught up in such layoffs get no warning.

The National Academy of Sciences said in a report last year that the Reagan administration’s reliance on ″voluntary″ notices is ″not providing workers with the ... ‘best practice’ minimum of two or three months to adjust successfully to job loss.″

The academy estimated that advance layoff notices would reduce by 25 percent the time a laid off employee is out of work, saving hundred of millions of dollars in unemployment benefits.

Reagan, however, said when he vetoed the trade bill that the layoff notice requirements would ″cost jobs and damage our economic growth.″

Business groups supportive of the bill in general had urged Reagan to veto the measure because of the layoff provision, which U.S. Chamber of Commerce President Richard Lesher called ″the camel’s nose under the tent″ in a broad union agenda for more government control in the workplace.

The House immediately overrode Reagan’s veto, with Democrats rejoicing that Reagan had given them an issue for rallying voters in the November election.

Democratic presidential front-runner Michael Dukakis said Reagan and Vice President George Bush ″don’t understand that for working families ... there is nothing more painful than losing a job.″

The Senate, which passed the trade bill on a 63-36 vote that was short of what would be needed to override Reagan’s veto, was expected to take up the measure again early next month.

The 18 states added to the 1987 survey by the Bureau of Labor Statistics were Indiana, Iowa, Kansas, Maine, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Utah, Vermont and Virginia.

Of the 29 states surveyed for 1987, two - Texas and Wisconsin - accounted for one-fourt of the total layoffs. Five other states - Louisiana, Minnesota, New Jersey, New York and Pennsylvania - accounted for another one-fourth.

″Slack″ or ″seasonal″ work were listed by employers in the survey as accounting for about half of the layoffs. The other biggest reasons cited for them by employers were completion of contracts, 7 percent; business ownership changes, 4 percent; and import competition, 2 percent.

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