OLMIS

by Jim Lee
Published May-25-2010

The Mass Layoff Statistics Program Oregon Weathers the Recession Around the Region and Around the Country Summary

Good news - the number of mass layoffs in Oregon plummeted in the second half of 2009. The sharp decline in mass layoffs in Oregon is another sign that the recent long, deep recession finally reached bottom in the summer of 2009.

The decline in layoffs continued into 2010, when in the first quarter the number of Bureau of Labor Statistics Mass Layoff Statistics (MLS) program designated layoff events fell below the first quarter average. This is the first time that has occurred since the first quarter of 2008.

Also in the first quarter of 2008, the ratio of Mass Layoff Statistics events verified as extended layoff events (MLS Realization Rate) approached the Oregon MLS program average of 31 percent. The last time this occurred was the third quarter of 2008.

These improvements compare favorably with recent numbers for the entire United States and several other high unemployment states.

The MLS program designates different types of layoffs. The most general is a MLS layoff event, which occurs when at least 50 employees of a particular employer file an initial claim for unemployment insurance benefits within a five week period. Employers are contacted to gather additional information about the layoff event. If the employer verifies that at least 50 employees have been laid off for a period of at least 30 days, these events are designated as extended mass layoff events.

Though the program's primary focus is on the verified extended mass layoffs and the number of employees caught up in them (separations), most events are not extended events but of shorter duration. Whether brief furloughs, shift rescheduling, maintenance shutdowns, or any of many other possibilities, most MLS layoff events are not extended events and the total number of all layoff events, extended or shorter, makes a good indicator of the general level of disruptions in the workplace. At the same time, the proportion of extended layoffs to all layoff events (MLS Realization Rate) can serve as an indicator of the magnitude and duration of job losses occurring due to mass layoff actions.

Table 1 shows just how bad the layoff situation was in Oregon during the depths of the recent recession.

From the fourth quarter of 2008 through the second quarter of 2009, Oregon experienced record numbers of mass layoff events, extended mass layoff events, and employee separations resulting from the extended layoffs.

The number of mass layoff events exceeded the MLS program's quarterly average for seven consecutive quarters beginning in the second quarter of 2008 and was nearly double the average number of layoffs during the first two quarters of 2009. Also, throughout the recession, the realization rate remained consistently above the Oregon average of 31 percent, peaking at 59 percent in the second quarter of 2009.

Finally, in the third quarter of 2009 - though total layoff events remained high, 55 percent greater than the MLS program average for the third quarter - the number of both extended layoff events and separations were noticeably down, falling well below the record setting numbers of the prior three quarters. The MLS Realization Rate fell from nearly 50 percent, where it hovered for three quarters, to 34 percent which is near the Oregon average.

These are not necessarily numbers to celebrate, but indicate that the employment situation began to improve at this time, at least in regards to job losses through mass layoffs. In the third quarter of 2009, layoff events continued in large numbers but began to come down from record highs. More important, longer term layoffs are becoming less frequent.

These improvements continued, even accelerated, during the next two quarters. The total number of layoffs continued to fall toward program averages, even falling a bit below average - 89 percent in the first quarter of 2010. At the same time, extended layoffs remain near average.

The contrast between the most recent quarter and one year ago (first quarter 2009) is striking. The first quarter of 2010 brought 84 fewer layoffs, 51 fewer extended layoffs, and more than 10,000 fewer employees separated from their jobs.

That is definitely improvement and welcome good news.

Even as the unemployment rate remains stubbornly high in Oregon, job losses associated with mass layoffs declined significantly during the last several months. In fact, total layoff events in Oregon fell below the first quarter average, even as the nation continues to struggle with mass layoffs well above the average level (Table 2).

Some of Oregon's neighboring states followed a similar course since the beginning of the recession in the fourth quarter of 2007. Last quarter, both Oregon and Washington fell below first quarter averages for total layoffs, while California and Idaho were approaching average. Nevada and Arizona continue to experience higher than average numbers of layoffs.

Table 3 provides a quick tour around the United States. In terms of mass layoffs, the situation has improved in the West and to some extent the Midwest. Layoffs are still well above average in the Northeast and the South.

After the avalanche of mass layoffs during the depths of the recession in the winter of 2008-2009, the recent sharp decline in mass layoffs is a welcome, and needed, relief. At least in terms of layoffs Oregon has returned to "normal" somewhat quicker than many neighboring states and the country in general.

With the unemployment rate still in the uncomfortable double-digits, diminishing layoffs don't begin to address the difficult questions of getting people back to work, but it is good to know that job losses, at least for now, have slowed appreciably.