The Changing Face of Job Loss in the United States, 1981-1995

TLDR

Large corporate downsizing, exemplified by AT&T’s 40,000‑person cut in 1996, has led the public to view widespread white‑collar job loss as a result of competitive pressure, yet data limitations hinder precise identification of affected worker groups before the 1980s. The study analyzes Displaced Workers Survey data from 1984 to 1996 to chart the incidence and consequences of job loss between 1981 and 1995 and assess whether labor‑force statistics corroborate public perceptions. The authors use the Displaced Workers Surveys, biannual supplements to the Current Population Survey since 1984 that query workers about job loss in the preceding five years (or three years for 1994 and 1996), to gather the necessary data.

Abstract

IN THE FIRST WEEK of January 1996, AT&T announced it was restructuring its operations and reducing its managerial work force by 40,000. This was only the latest a string of widely publicized large labor force reductions announced by major American corporations. The public perceives that corporations are responding to increased competitive pressure by restructuring and downsizing their work forces, particularly their white-collar work forces, to an unprecedented degree and that the workers so displaced are suffering substantial economic hardship. I In this study I examine evidence from Displaced Workers Surveys (DWSs) from 1984 to 1996 to provide a comprehensive picture of the incidence and consequences of job loss between 1981 and 1995 to determine the extent to which labor force data support these perceptions. Data limitations make it difficult to know what groups of workers jobs before the 1980s. The DWSs, which have been regular supplements to the Current Population Survey (CPS) at two-year intervals since 1984, have useful information on job loss, however.2 Specifically, these surveys ask workers if in the past five (past three years the 1994 and 1996 DWSs) they have lost or left a job because of a