Lay-Offs Compound Work Confidence Drop

July 28, 2003 ( - Worker confidence in the country's economy and political leadership had plummeted to six year lows as almost one in five American workers has been laid off in the past three years - many without advance notice, severance pay, or career counseling.

Thirty-six percent of this country’s workers report being very concerned about the current unemployment rate, in stark contrast to the only 16% that responded to being very concerned in January 2000. With the fears of unemployment, it comes as little surprise that job security is also being questioned at levels much higher than three years ago. Today, 43% of workers say they are very concerned about this issue, compared with only 26% who expressed similar concern in January 2000, according to The Disposable Worker: Living in a Job-Loss Economy survey.

The numbers are even more impacting to the country’s labor force when expanded further. While 18% of all American workers have been laid off from a full- or part-time job in the past three years, that number goes up to roughly one-fourth of workers earning less than $40,000 annually. Further, during the course of a lifetime, m ore than half (56%) of all workers and their family members have been laid off at least once, a quarter say it has happened twice during their life and 19% have had to experience the pink slip three or more times.

Yet, the lay-offs do not touch all sectors of the workforce equally. Workers in the public and non-profit sector and those who belong to unions experienced fewer layoffs than employees of private, for profit companies. For example, the majority (94%) of government workers and 92% of workers for non-profits were not laid off in this period, compared to 81% of those who work for a private, for profit business. Similarly, among union workers and those that belong to a teacher’s association, 93% were not laid off between spring 2000 and spring 2003, compared to 81% of nonunion or association workers.

Shaky Ground

Thus, putting all the factors together – low confidence in the job market, fears of job security and past lay off experience – workers do not think now is the time to be looking for other employment opportunities. In fact, seven in 10 workers say that now is a bad time to find a quality job. Women in particular view the current job market negatively; among women, only 16% maintain that now is a good time to find a quality job.

African-American workers are twice as likely to be very concerned about the bleak job market pictures than their caucasian counterparts, by a margin of 61% to 31%. While not nearly as pronounced, the same disparity about the job outlook is seen between workers making less than $40,000 and those above, with 44% of those below the mark saying now is a bad time to be looking for a new job compared to only 30% of those above that income level prior to losing their job.

In contrast, older workers feel much more secure in their jobs than younger workers. Among younger workers, those between the ages of 18 and 29, nearly half (48%) think that they or a family member will be laid off from their job in the next three to five years, compared to just 35% of workers age 50 and older. Splitting the difference are workers between 30 and 49, where 41% anticipate being laid off.

Breaking it down by income level, lower income workers feel less secure in their job than their higher earning colleagues, and are more likely to anticipate being laid off – 47% to 38%, respectively.

Perhaps though, the sting of a job loss hurts even more in the way that employers handled the event. Although some employers notified workers of their impending job loss, as required by federal law - for employers with more than 100 workers - nearly two-thirds (64%) of workers were laid off with less than two weeks notice.

The majority of workers have returned to full-time work since being laid off, but for many, particularly African-American workers, the job hunt continues. Although 68% of white workers have found a new full-time job in the recent period, only 44% of African-American workers have done so, and only 54% of workers of other races.

Additionally, once workers get that first pink slip, they tend to be gun shy about the risk of unemployment in the further. In fact, four in 10 workers who have been laid off in the past are concerned that they will again be laid off in the next three to five years, with only the same number (40%) believing that they can take steps to reduce the likelihood that they will be laid off in the next three to five years. Overall, women are more pessimistic than men about taking steps to prevent layoff, with (61%) of women lacking confidence in strategies to reduce the likelihood of layoffs, compared to 45% of men who believe there are no steps they can take.

Despite the prevalence of pessimism among the workers, the study did find many workers have specific strategies in mind to prevent their being laid off again in the future. Among those strategies cited:

  • Taking additional training or education in their current field - 16%
  • Get training or education in a new field - 13%
  • Work in a more secure company or industry - 7%
  • Going into business for themselves - 4%

Workers also suggest engaging in a variety of strategies to make themselves better employees, and thus avoid lay-offs in the next three to five years. Cited by workers were such things as:

  • Increasing their productivity
  • Working harder
  • Being flexible
  • Showing up for work on time
  • Being disciplined and determined
  • Taking their job seriously
  • Maintaining a strong work ethic
  • Doing their job well.

Workers cite certain political or economic factors that they believe play a role in if they will be laid off. Included in the list was:

  • Free trade
  • The movement of jobs overseas
  • The general decline of their industry.

Not surprisingly, workers express strong support for government services to assist the unemployed.Among all workers, the extension of unemployment insurance benefits is thought to be the most important service that the government can provide to help people. Workers who identify themselves as Democrats are more likely than Republicans to support this strategy - 41% versus 31%, respectively.

Overall, 57% strongly agree that government should assist laid off workers to maintain their health insurance, while 39% strongly agree that the government should help these workers to pay for education and training for new jobs and careers. Those workers who experience job-loss, however, find that outplacement and related services are far from consistently available. Only 28% of laid off workers say their employer extended their health benefits, while far fewer received severance, job placement assistance, career counseling or job or skill training.

Among workers who have been laid off, the survey shows that 30% have used their local One-Stop Career Center, which offers employment and training services. One-fifth (20%) of workers have used the US Department of Labor's job skills database and career resource website, America's Job Bank.

Good News

After being laid off, two-thirds of workers remained out of work for less than six months, while 23% were unemployed for six months to one year. Only 7% report being out of work for more than one year. Slightly more than half (51%) of these workers collected unemployment benefits while out of work.

Among workers who have found a new job since being laid off, nearly half (45%) say their new job pays more than the job they had before they were laid off.

Not surprising, additional education and training also seemed to help the cause, even though only 19% of workers who lost their jobs enrolled in education or training courses. However, of those that did, almost seven out of 10 (69%) say it was helpful to them in getting another job.

The study was conducted by the John J Heldrich Center for Workforce Development at Rutgers University and the Center for Survey Research and Analysis at the University of Connecticut. It canvassed a sample of 1,484 adult members of the US workforce, with results based on 1,015 completed interviews, between June 10 and 21, 2003.

A copy of the complete report can be found at