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  • BONUM Staff

Permanently Displaced Workers and the Way Forward

Why is the unemployment rate not accurate?

The Current Population Survey (CPS) administered by the U.S. Bureau of Labor Statistics (BLS) is an imperfect measure of joblessness because the resulting unemployment rate regards part-time and temp jobs as employment and doesn’t account for the underemployed and those who have given up on the job search.

In February 2021 the unemployment rate was 6.2% (BLS, 2021):

  • 6.9 million who want a job were not in the labor force, up 1.9 million

  • Labor force participation rate was at 61.4%, 1.9% lower than a year earlier

  • Employment-population ratio was down by 3.5% over the year to 57.6%

Displaced workers are defined as people 20+ years of age who left or lost jobs because their plant or company closed or moved, there was insufficient work, or their position or shift was eliminated. Hiring bias, industry changes or disputes, weather or other environmental conditions, and automation pushes people out of the labor force, while illness or disability, caring for a child or family member, and dealing with personal challenges pulls others out.

Long before the global pandemic, displaced workers rates were notable (BLS, 2020):

  • Jan 2017 - Dec 2019, there were 2.7 million workers displaced from jobs held 3+ years

  • 40% due to company closed/moved, 36% position eliminated, 23% insufficient work

  • Jan 2020, only 70% of the displaced 2017-2019 workers were reemployed

    • 35% of which earning less than what they did at their lost job

Joblessness can lead to poor mental and physical health due to elevated levels of stress, anxiety, frustration, disappointment, and social stigma (APA, 2012) as participation in the labor force is a matter of survival. Federal and local legislation and programs have been designed to address displacement:

Yet many struggle to access government initiatives and those with access experience varying degrees of success. Some have suggested a Universal Basic Income as a way to break the growing trends of income inequities, displacement, and demand on social service programs. While the way forward remains unclear, resolution will certainly call for a combined effort from public and private organizations working with the individual.

Ways Companies Can Employ Displaced Workers:
 -Do not make assumptions about or question employment gaps
 -Identify quick learners and those open to being taught
 -Catalog the non-industry specific skills your company needs
 -Be flexible with specific job qualifications
 -Forecast job automation to retrain and reposition employees
 -Partner with veteran networks & local governments for retraining
 -Tighten alignment between industry, government, and academic pathways
 -Stop looking to the gig economy to provide solutions  

Additional Reading: The War on Normal People


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