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Displaced workers of 1979-83:
how well have they fared?
What happen to workers when recessions close their plants or severely curtail operations? And what happens to those who lose their jobs because of structural problems of the type that have recently affected some of our key manufacturing industries? How many of these workers manage to return to the same or similar jobs as economic conditions improve? How many remain without jobs or eventually settle for different and usually lower paying jobs?
In an attempt to obtain answers to these questions in connection with the 1980-81 and 1982-83 recessions, two agencies of the U.S. Department of Labor arranged for a special household survey in January 1984. Among the principal findings:
A total of 11.5 million workers 20 years of age and over lost jobs because of plant closings or employment cutbacks over the January 1979—January 1984 period. Those who had worked at least 3 years on their jobs—the focus of this study—numbered 5.1 million.
About half of the 5.1 million workers reported they had become displaced because their plants or business closed down or moved. Two-fifths reported job losses due to "slack work" (or insufficient demand), and the rest said their shifts or individual jobs had been abolished.
About 3.5 million of the displaced workers had collected unemployment insurance benefits after losing their jobs. Nearly one-half of these reported they had exhausted their benefits.
Many no longer had health insurance coverage, including some who subsequently found work.
Of the 5.1 million displaced workers, about 3.1 million had become reemployed by January 1984, but often in different industries than in the ones they had previously worked. About 1.3 million were looking for work, and the remaining 700,000 had left the labor force.
Of the 3.1 million displaced workers who were reemployed, about half were earning as much or more in the jobs they held when surveyed than in the ones they had lost. However, many others had taken large pay cuts, often exceeding 20 percent.
Blacks accounted for about 600,000 of the 5.1 million displaced workers, and Hispanics made up 300,000. The proportion reemployed as of January 1984 was relatively small for both of these groups— 42 percent for blacks and 52 percent for Hispanics. Conversely, the proportions looking for work were relatively high— 41 percent for blacks and 34 percent for Hispanics.
This excerpt is from an article published in the June 1985 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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