Mass Layoffs Technical Note
- 10 - Technical Note The Mass Layoff Statistics (MLS) program is a federal-state program which identifies, describes, and tracks the effects of major job cutbacks, using data from each state's unemployment insurance database. Employers which have at least 50 initial claims filed against them during a con- secutive 5-week period are contacted by the state agency to determine whether these separations are of at least 31 days duration, and, if so, information is obtained on the total number of persons separated and the reasons for these separations. Employers are identified according to in- dustry classification and location, and unemployment insurance claimants are identified by such demographic factors as age, race, gender, ethnic group, and place of residence. The program yields information on an individual's entire spell of unemployment, to the point when regular unemployment insurance benefits are exhausted. Definitions Employer. Employers in the MLS program include those covered by state unemployment insurance laws. Information on employers is obtained from the Quarterly Census of Employment and Wages (QCEW) program, which is admin- istered by the Bureau of Labor Statistics (BLS). Extended layoff event. Fifty or more initial claims for unemployment insurance benefits from an employer during a 5-week period, with at least 50 workers separated for more than 30 days. Initial claimant. A person who files any notice of unemployment to initiate a request either for a determination of entitlement to and eligi- bility for compensation, or for a subsequent period of unemployment within a benefit year or period of eligibility. Layoff. The separation of persons from an employer as part of a mass layoff event. (See below.) Such layoffs involve both persons subject to recall and those who are terminated by the establishment. Mass layoff. Fifty or more initial claims for unemployment insurance benefits from an employer beginning in a given month, regardless of dura- tion. Worksite closure. The complete closure of either multi-unit or single- unit employers or the partial closure of a multi-unit employer where entire worksites affected by layoffs are closed or planned to be closed. - 11 - Revisions to preliminary data The latest quarterly data in this news release are considered preliminary. After the initial publication of quarterly information, more data are col- lected as remaining employer interviews for the quarter are completed and additional initial claimant information associated with extended layoff events is received. Movement of work concepts and questions Because of the employer interview component, the BLS decided to use the MLS program as a vehicle for collecting additional information on offshoring and outsourcing associated with job loss, by adding questions that address movement of work. The term "moving work" means that the company experiencing the layoff has reassigned work activities that were performed at a worksite by the company's employees (1) to another work- site within the company; (2) to another company under formal arrangements at the same worksite; or (3) to another company under formal arrangements at another worksite. The type of work activities subject to movement can include accounting, customer service, cleaning, warehousing, etc. "Overseas relocation" is the movement of work from within the U.S. to locations outside of the U.S. "Overseas relocation" can occur within the same company and involve movement of work to a different location of that company outside of the U.S., or to a different company altogether. "Domestic relocation" is the movement of work to other locations inside the U.S., either within the same company or to a different company. "Overseas relocation" and "domestic relocation" are no longer used in the same way as they were in earlier extended mass layoff news releases. There- fore, the data presented in this news release are not comparable to those that were presented in earlier news releases. Questions on movement of work and location are asked for all identified layoff events when the reason for separation is other than "seasonal work" or "vacation period." Seasonal and vacation layoff events were excluded because movement of work appears unlikely. Questions on movement of work are asked after the analyst verifies that a layoff in fact occurred and lasted more than 30 days, and obtained the total number of workers separated from jobs, the date the layoff began, and the economic reason for the layoff. If the reason for layoff is other than seasonal or vacation, the employer was asked the following: (1) "Did this layoff include your company moving work from this loca- tion(s) to a different geographic location(s) within your company?" (2) "Did this layoff include your company moving work that was performed in-house by your employees to a different company, through contractual ar- rangements?" A "yes" response to either question is followed by: "Is the location inside or outside of the U.S.?" and "How many of the layoffs were a result of this relocation?" Layoff actions are classified as "overseas relocation" if the employer responds "yes" to questions 1 and/or 2, and indicates that the location(s) was outside of the U.S. Domestic relocation is determined if the employer responds "yes" to questions 1 and/or 2 and indicates that the location(s) was within the U.S. After asking the movement of work questions, the employer interview continues and responses are obtained for questions on recall expectations and open/closed status of the worksite. - 12 - Reliability of the data The identification of employers and layoff events in the MLS program and associated characteristics of claimants is based on administrative data on covered establishments and unemployment insurance claims, and, therefore, is not subject to issues associated with sampling error. Nonsampling errors such as typographical errors may occur but are not likely to be significant. While the MLS employers and layoff events are not subject to sampling error, and all such employers are asked the interview questions, the employer responses are subject to nonsampling error. Nonsampling error can occur for many reasons, including the in- ability to obtain information for all respondents, inability or unwill- ingness of respondents to provide correct information, and errors made in the collection or processing of the data. For the fourth quarter of 2008, outright refusal to participate in the employer interview accounted for 3.1 percent of all private nonfarm events. Although included in the total number of instances involving the movement of work, for the fourth quarter, employers in 39 relocations were unable to provide the number of separations specifically associated with the movement of work, 8 of which involved out-of-country moves. Other information Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200; TDD message referral phone: 1-800-877-8339.
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Last Modified Date: February 13, 2009