Displaced Workers

Displaced workers are wage and salary workers 20 years old and over who lost or left jobs because (1) their plant or company closed or moved,(2) there was insufficient work for them to do, or(3) their position or shift was abolished. They are categorized as either long-tenured, having worked for their employer for three or more years, or short-tenured, having worked for their employer less than three years. Information about displaced workers has been collected by the Employment and [Page 183]Training Administration of the U.S. Department of Labor on a biennial basis since 1984 as a supplement to the Current Population Survey, a monthly survey of households, the primary source of information about the country's labor force. The most recent survey period was 2007 to 2009, up to three years before the January 2010 survey date. In this survey, there are a total of 15.4 million displaced workers, an increase from 8.3 million for the previous 2005–07 survey, which in turn was about the same as for the 2003–05 survey.

Of these, 6.9 million persons were long-tenured and 8.5 million were short-tenured. Department of Labor reports focus on long-tenured workers. In the 2010 survey, 48.8 percent of displaced workers were reemployed, down from 67.1 percent in the January 2008 survey. This is the lowest reemployment rate on record since the series began in 1984. In 2010, 36.1 percent of displaced workers were unemployed, compared with only 18 percent in 2008. Individuals are officially defined as unemployed if they are seeking paid work but are unable to find a job. The official unemployment rate is computed by dividing the number of those unemployed by the total number of employed and unemployed individuals during a survey week (excluding those under 14 years of age, institutionalized persons, and persons on active duty in the armed forces).

The unemployment rate is usually considered an underestimate of labor market weakness because it does not include (1) those who are employed only part-time when they need and desire full-time employment, (2) those who are employed at a low-paying job that requires less skill or training than they possess, and (3) those who are not fully or adequately used or employed and become discouraged workers because of a lack of job opportunities, training opportunities, or services such as child care and public transportation. Such difficulties lead them to accept economic inactivity rather than registering as unemployed or actively seeking jobs, because their prospects for regular employment appear to be bleak.