Management & Labor

How Displaced Workers Are Recovering (or Not)

See charts and a few key takeaways on new data measuring how recently laid-off workers are faring across regions and industries.
by | August 26, 2014
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About 4.3 million workers nationwide lost a long-time job between 2010 to 2013.

Every three years, the Labor Department publishes data on such displaced workers. Reports released Tuesday examined types of workers losing jobs held for three or more years and how well they’ve recovered in the aftermath of the recession.

Employees become displaced for a number of reasons. Roughly equal numbers of workers fall into one of three categories that explain their job loss: Closing/moving of a company, elimination of a position/shift or “insufficient work.”

More Displaced Workers Are Finding Jobs

Long-tenured displaced workers are having better luck at finding new jobs, but the jobs market still remains more difficult than in the years leading up to the recession.

In January, 61 percent of these workers had secured new employment, up from 56 percent in 2012 and 49 percent during the height of the recession in early 2010.

Among demographic groups, just 55 percent of blacks had regained employment. Whites somewhat fared better, while nearly 65 percent of Hispanic found new jobs.

About 21 percent of workers displaced over the three-year period reported they remained unemployed in January. Another 18 percent had dropped out of the labor force. Older Americans stopped looking for work at the highest rates, and many likely retired. But nearly 17 percent of younger displaced workers ages 20 to 24 also dropped out.

Industries Where Most Regain Employment

It’s much easier to rebound from a job loss in some industries.

Nearly 70 percent of displaced leisure and hospitality workers found new jobs. The bulk of these are low-wage positions where the competition for openings isn’t as fierce. The transportation and utilities industry, one of the stronger sectors in recent years, recorded an equal rate of employment.

By comparison, just under 53 percent of displaced hospital workers found new jobs -- among the lowest of any industry.

The following chart shows the January employment status of longtime workers losing their jobs between 2011 and 2013, by major industry:

Industry Employed % Unemployed % Out of Labor Force %
Leisure and hospitality 69.4 17.5 13.2
Transportation and utilities 69.4 19.9 10.7
Construction 68.4 16.3 15.3
Information 66.6 19.7 13.7
Government 63.5 19.2 17.3
Financial activities 61 18.7 20.2
Professional and business services 60 19.9 20.1
Education and health services 59.9 24.7 15.4
Manufacturing 59.3 22.5 18.2
Other private sector services 57.7 19.6 22.7
Wholesale and retail trade 57.6 22.8 19.7
Source: BLS, Displaced workers supplement

For separate occupational groups, about two-thirds of management and professional employees regained employment.

Mid-Atlantic, Pacific Regions Have Lowest Re-employment Rates

Much like the economic recovery, the ease at which displaced workers find work varied significantly across regions.

Those losing jobs in New England, where unemployment is generally lower, mostly found work, with about 74 percent employed in January. Data suggested a far more difficult economic climate in the Mid-Atlantic region, which includes New Jersey, New York, and Pennsylvania. Less than 53 percent of displaced workers there obtained new jobs.

Job losses resulting from plant closures or moves were most common in the East South Central and Mountain regions. About 46 percent displacements in the West North Central region (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) resulted from the elimination of positions or shifts – more than any other area. (See the note below this table for states included in each region.)

The Labor Department does not publish worker displacement data for individual states.

Half of Those Finding Jobs Took Pay Cuts

One of the more frequent criticisms of the current recovery is that many of the newly created jobs pay poorly.

Only 52 percent of displaced workers who found full-time positions reported earnings that matched or exceeded that of their lost jobs. About 27 percent took severe pay cuts of more than 20 percent. (These figures exclude those who found part-time work or became self-employed.)

Still, by this measure, earnings of rehired displaced workers are about on par with other surveys prior to the recession.

In general, those reemployed in stronger sectors found better-paying jobs. Here’s one more table showing the earnings status of displaced workers who were employed full-time in January.

Industry Earnings greater or equal to lost job Less than 20% paycut More than 20% paycut
Information 73% 10% 16%
Education and health services 64% 21% 15%
Professional and business services 64% 15% 21%
Mining, quarrying, and oil and gas extraction 63% 6% 31%
Construction 57% 11% 32%
Leisure and hospitality 56% 10% 34%
Other private sector services 54% 41% 5%
Wholesale and retail trade 47% 21% 32%
Durable goods 45% 32% 23%
Government wage and salary workers 44% 21% 35%
Manufacturing 43% 28% 29%
Financial activities 42% 32% 26%
Nondurable goods 38% 19% 44%
Transportation and utilities 34% 18% 48%
Source: BLS, Displaced workers supplement

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