Worker displacement in the mid-1990s

Abstract

The years 1995 and 1996 marked the fifth and sixth consecutive years of economic growth that began in the early 1990s. During these 2 years, 5.0 million jobs were added to nonfarm payrolls. The unemployment rate, which peaked at 7.8 percent in mid-1992, remained at about 51⁄2 percent during 1995–96. Despite these favorable labor market conditions, between 1995 and 1996 2.2 million workers aged 20 years and older lost jobs they had held for 3 or more years because their plants or companies closed down or moved, their positions or shifts were abolished, or their employer did not have enough work for them to do. In comparison, 2.4 million workers in that age group were displaced between 1993 and 1994, also a period of strong labor market conditions. The displacement rate, which represents the likelihood of being displaced, fell from 3.3 percent during 1993–94 to 2.9 percent during 1995–96. Of the 2.2 million workers displaced in the most recent period, 83 percent were reemployed when surveyed in February 1998. Workers who lost jobs earlier in the decade had not fared nearly as well: of those who had lost jobs during 1991 and 1992, only 75 percent were working in February 1994. Since 1984, the Employment and Training Administration of the U.S. Department of Labor has sponsored biennial surveys of worker displacement as supplements to the Current Population Survey (CPS). Using data from these surveys, this article examines the experience of job loss and reemployment. Two years of data from each of the Displaced Worker Surveys were used to form a time series that begins with the 1981–82 period (from Worker displacement in the mid-1990s