Displaced Workers Faring Better, But Many Remain Unemployed

New data on displaced workers shows that those in the South have had the hardest time finding new jobs.
by | August 26, 2016
Displaced workers in the hard-hit mining and oil/gas extraction industry recorded the highest rates of unemployment. (Tribune News Service)

Fewer Americans were displaced from their jobs in recent years, and those who were fared better at regaining employment.

Data from the U.S. Department of Labor published Thursday indicate that about 7.4 million workers were displaced between January 2013 and December 2015. That’s down from 9.5 million between 2011-2013, reflecting improving economic conditions. Those who lost jobs also had somewhat better luck at regaining them: 67 percent were reemployed in January, up from 61 percent in the prior survey.

Those displaced lose their jobs for a variety of reasons, ranging from facilities being shuttered to job automation or termination of worker shifts. The Labor Department defines displaced workers as those affected by plant closures or moves, elimination of positions or insufficient work availability. Roughly equal numbers of workers lost their jobs for each of these three reasons.

Of the major sectors of the economy, those in the construction and professional and business services industries were most successful at rebounding, with 73 percent reporting reemployment in January. Not surprisingly, displaced workers in the hard-hit mining and oil/gas extraction industry recorded the highest rates of unemployment. And those most likely to give up their job searches or retire were found in the wholesale/retail trade, transportation and utilities sectors, where more than one-fifth of displaced workers dropped out of the labor force entirely.

Employed, Unemployed, Out of Labor Force

Labor Department estimates further suggest 337,000 government workers were displaced between 2013 and 2015, with about 68 percent finding new jobs. An estimated 165,000 were considered long tenured, meaning they had held their positions for at least three years. This group of public sector workers particularly struggled as only about 57 percent had been reemployed as of January, one of the lowest rates for long-tenured displaced workers of any industry.

Across demographic groups, men aged 25 to 54 regained employment at slightly higher rates than women, 73 percent to 69 percent. About 68 percent of displaced whites and Hispanics found work, while 63 percent of Asians and only 60 percent of black workers reported being employed. All racial and ethnic groups experienced increases since the last survey was conducted in 2014.

The data further depict noticeable differences across regions. For the most part, long-tenured workers suffering job losses in the Western U.S. were most successful at securing new jobs. Between 71 and 75 percent regained employment in the western regions of the country. By comparison, only 53 percent surveyed were working in what’s considered the East South Central division: Alabama, Kentucky, Mississippi and Tennessee.

This map shows the share of displaced workers who reported being employed in each of the nine regional groups. (The Labor Department does not publish state-level data for displaced workers.)

 
Figures reflect January 2016 employment status for only displaced workers with three or more years of tenure

SOURCE: Bureau of Labor Statistics

Those who did manage to find work often took pay cuts. Nearly half (47 percent) of displaced full-time workers reported earnings that were less than their previous job. Only a third of wholesale/retail trade and finance workers who obtained employment matched their prior earnings. An even smaller share -- 27 percent -- of rehired workers in the information industry, which includes software publishing and media-related communications, were able to secure new jobs with equal or better pay.