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Facts onWorking
Women
,~TY LIBRARY
ITORY
U.S. Department of Labor
Women 's Bureau
0336
No. 96-1
September 1996
What Women Need to Know About Downsizing
Corporate downsizing and worker displacement have
captured headlines across the country. Although more
jobs are being created than destroyed, many workers
feel insecure. This feeling of insecurity may arise
from both the increasing vulnerability of all workers,
including professionals and managers, to job loss and
the increasing likelihood that permanent dismissal
rather than temporary lay-off will be the outcome of
job loss. This fact sheet is the first step in a largerscale effort by the U.S. Department of Labor Women's
Bureau to understand how working women are affected
by downsizing and displacement.
We've come a long way since policy makers,
researchers, CEOs, and the media could ignore the
impact of downsizing and displacement on women
workers. As women's earnings have become central to
their families' economic survival, we can no longer
assume that a woman who loses her job as a result of
corporate downsizing, factory closings, or job
restructuring can afford to drop out of the labor force
and rely on the stable earnings of a male worker. Like
their male counterparts, women experienced job losses
in the manufacturing sector during the 1980s. As
structural realignment and downsizing spread to
service industries as diverse as insufance and hospitals,
a full range of so-called "women's" jobs have been
affected.
This fact sheet provides information on the effects of
downsizing and displacement on women workers in the
civilian workforce. It answers four of the most
important questions about what happens to women as
a result ofrestructuring in the U.S. economy.
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These questions are:
o
o
o
o
What is the magnitude of women's displacement?
How do women fare after displacement?
Do women move after being displaced?
What are the economic costs of dislocation for women?
The facts presented are based on information about
workers who are at least 20 years old and who lost jobs
because their plant or company closed or moved, there was
insufficient work for them to do, or their position or shift was
abolished. This information has been collected every two
years since 1984 by the Bureau of Labor Statistics {BLS).
The BLS definition of displaced workers is limited to those
workers who lost a full-time salaried job as a result of plant
closure, abolition of shifts or positions, or insufficient work.
WHAT IS THE MAGNITUDE OF WOMEN'S
DISPLACEMENT?
Between 1993 and 1995, almost 3.7 million women lost their
jobs involuntarily. Women comprised more than four out of
10 workers displaced during that time period (43.5 percent of
the total 8.4 million workers displaced).
Research on dislocated workers often focuses on those who
have held their previous job for at least three years. These
workers are called the "long-tenure" displaced workers. Table
1 shows the number of displaced women relative to the total
number of displaced workers for 2-year periods between 1981
and 1994. Between January 1993 and December 1994, 42.2
percent of dislocated long-tenure workers were women.
Women's share of displacement has increased since the earliest
survey years when they represented about one-third of all
dislocated workers. Between 1993 and 1994, almost one
million women were displaced from long-tenure jobs.
Although women's share of all displaced workers has
increased, the displacement rate of long-tenure women
is slightly below men' s rate. The displacement rate for
long-tenure women workers is derived by dividing the
number of displaced women workers in this category
by all women workers. Table 1 also shows that in
199 1 and 1992, 3.5 percent of women who had held
jobs for three or more years were dislocated. For men,
the displacement rate was 4 .1 percent. Women's
smaller chance of being displaced may arise because
the types of industries and occupations in which they
are most active have been less likely to displace
workers.
Table 1. Displaced Workers Wllh 3 Yean or More o/Tenure On Lost
Job, 1981-1994.
Displaced Workers
(Numbers in thousands)
Displacement Rates
(Percent)
Years
Total
Displaced
Women
Women as Women
% of Total
Men
1981-82
1983-84
1985-86
1987-88
1989-90
1991-92
1993-94
811
729
728
688
862
1,089
927
34.3
38.0
36. .5
42.4
39.3
39.3
42.2
4.3
3.2
3.3
2.4
3.2
4.1
2,362
1,920
1,995
1,622
2,192
2,768
2,197
3.4
2.9
2.8
2.4
2.8
3 ..5
•
•
Source: Based on unpublished data from the Bureau of Labor Statistics,
Displaced Worker Surveys, 1984-1996. Due to changes in survey
methodology, the last two surveys may not be directly comparable to earlier
data. Displacement rates from 1981-1992 are from "Worker Displacement:
A Decade of Change," by Jennifer M. Gardner, Monthly Labor Review,
April 1996.
• Displacement rates from the most recent survey not available.
HOW DO WOMEN FARE AFfER
DISPLACEMENT?
When long-tenure women workers are displaced, they
often fare worse than their male counterparts. Women
are less likely to be reemployed, and if reemployed,
they are more likely to work at part-time jobs than
men.
By February 1996, 76.1 percent oflong-tenure women
who lost full-time wage and salary jobs in 1993 and
1994 had been reemployed, versus 81 .9 percent of
men, as shown in Table 2. Although race and ethnic
groups are not shown on the table, there are differences
in the experiences of women of different races to
dislocation. Hispanic women were the least likely to be
reemployed in every time period shown: only 51.1
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percent of Hispanic women displaced in 1993 and 1994 were
reemployed in February 1996. African American women were
slightly more likely to be reemployed than white women during
the recent time period (with 78.2 and 75.4 percent
reemployment rates, respectively).
Table 2. What Do Displaced Workers Do After Dislocati.on'!
Distribution ofDisplacedMen and Women by Outcomes, 1981-1994.
(In Percents)
Year
Reemplo~
Unemployed
Women Mcm
Women Men
Qut of Labor Force
Women Men
Dimlaced
1981-82
1983-84
198.5-86
1987-88
1989-90
1991-92
1993-94
.56.4
64.9
68.8
18.1
21.9
76.2
12.1
74.2
78.3
79 ..5
80.9
70.9
70.7
7.5.2
79.4
13.4
10.9
8.9
1.5.6
76.1
81.9
72
63
10.6
10.9
.5.9
11.8
8.1
2.5 . .5
23.0
18.6
1.5.4
18.0
18.4
17.8
9.0
10.2
9.7
10.1
9.2
8.9
9.8
Source: Based on unpublished data from the Bureau of Labor Statistics, Displaced
Worker Surveys, 1984-1996. Table shows the distribution of long-tenure workers
displaced during the years shown, by their employment status in January or February
of the survey year. Due to changes in survey methodology, the last two surveys may
not be directly comparable to earlier data.
Women who lost full-time jobs and were reemployed, were
more likely to be reemployed in part-time positions than
displaced men. By February 1996, 8.9 percent of women
displaced in 1993 and 1994 were working part time, versus
only 5.1 percent of displaced men. For workers displaced
between 1991 and 1992, 13.1 percent of women and 4.8
percent of men were reemployed in part-time positions by early
1994. (Part time employment is not shown on the table.)
Table 2 shows that despite their lower likelihood of going back
to work after dislocation, long-tenure women are less likely
than men to be unemployed after many months of
displacement. This seeming discrepancy is explained by the
fact that in the early 1990s, displaced women were twice as
likely as displaced men to have dropped out of the labor force.
Almost 18 percent of women displaced in 1993 and 1994 were
neither employed nor actively looking for work in February
1996, while less than IO percent of displaced men dropped out
of the workforce during the same time period. Yet the table
also shows that the percent of women who dropped out of the
labor force after displacement has declined since the 1980s,
while male rates have remained relatively stable. This is likely
because women's earnings have become more important to
their families' economic survival, and a smaller share can
afford to drop out of the work force.
DO WOMEN MOVE AFTER BEING
DISPLACED?
Part of the explanation for women's lower
reemployment rates may be their more limited ability
to relocate to find another job. Table 3 shows the
percent of displaced workers who moved to take or
look for another job. In the most recent period, 199394, long-tenure displaced women workers were only
about 60 percent as likely to move as their male
counterparts. The data also show, however, that
relatively few men or women move after displacement
and that the rates have declined over time.
Table 3. Displaced Worken by Whether They Moved to Take or Look
For Another Job, 1981-1994.
Year
Displaced
1981-82
1983-84
1985-86
1987-88
1989-90
1991-92
1993-94
Percent Who Moved
Total
Women
Men
11.9
14.7
17.S
lS .2
16.7
10.S
8.7
8.1
11.0
10.S
10.6
10.4
6.6
6.3
13.9
17.0
21.6
18.S
20.8
12.9
10.4
between 1993 and 1994 and reemployed in full-time jobs by
February 1996, the average man was paid 13.3 percent less on
the new job than he made on the old job, while the average
woman was paid 15.4 percent less (data not shown on tables).
Assistance with retraining from the Job Training Partnership
Act (JTPA) helps many workers recover from dislocation.
Another new initiative is established by the Department of
Labor America's Job Bank-- an Internet-based listing of
employment opportunities across the country. Assistance with
job retraining and job search is only a part of the sol~tion.
Corporations we also increasingly discovering that downsizing
is not the smartest way to increased profitability. Recent
studies have shown that fewer than half of firms that downsize
reduce expenses or increase profits, in part because they end up
replacing the very people they had dismissed. New initiatives
on the part of employers and unions to enhance economic
security, create jobs, and provide on-the-job retraining may be
more likely than downsizing to increase the firm's bottom line.
Such initiatives could ease the costs of downsizing borne by
women workers.
Source: Based on unpublished data from the Bureau of Labor Statistics,
Displaced Worker Surveys, 1984-1996.
WHAT ARE THE ECONOMIC COSTS OF
DISLOCATION FOR WOMEN?
Clearly, downsizing is costly for those women who are
not reemployed, or who can only find part-time jobs, or
who face wage loss after displacement. For a
substantial minority of workers who are dislocated, the
economic losses are minimal. More than a third (3 6.2
percent) of all long-tenure workers who lost full-time
wage and salary jobs in 1993 and 1994 were
reemployed by February 1996 in a full-time job with
earnings that were the same or greater than those on
the lost job. However, a greater percentage (38.4
percent) were reemployed at a job that paid less than
the job they lost -- and a large portion of these workers
suffered earnings losses of 20 percent or more. The
remaining workers were either unemployed or had
dropped out of the labor force. The average wage loss
for women displaced from and reemployed in full-time
jobs was slightly greater than the loss for men in the
most recent survey. For full-time workers displaced
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Ida L. Castro
Women's Bureau
U.S. DEPARTMENT OF LABOR
WOMEN'S BUREAU
REGIONAL ADDRESSES
Re:jon I: Boston
Re2ion VI: Dallas
Ms. Jacqueline Cooke, RA
John F. Kennedy Federal Building
RoomE-270
Boston, MA 02230
Phone: (617) 565-1988
Fax: (617) 565-1986
(Connecticut, Maine, Massachusetts,
New Hampshire, Rhode Island, Vermont)
Ms. Evelyn Smith, RA
Federal Bldg., Suite 735
525 Griffin Street
Dallas, TX 75202
Phone: (214) 767-6985
Fax: (214) 767-5418
(Arkansas, Louisiana, New Mexico,
Oklahoma, Texas)
Re2ion II: New York City
Re2ion VII: Kansas City
Ms. Mary C. Murphree, RA
201 Varick Street, 601
New York, NY 10014-48 11
Phone: (212) 337-2389
Fax: (212) 337-2394
(New Jersey, New York, Puerto Rico,
Virgin Islands)
Ms. Rose Kemp, RA
Center City Sq. Building
1100 Main St., Suite 1230
Kansas City, MO 64105
Phone: (816) 426-6 108
1-800-252-4706
Fax: (816) 426-6107
(Iowa, Kansas, Missouri, Nebraska)
Region III: Philadelphia
Region VIII: Denver
Ms. Cornelia Moore, RA
Gateway Building, Room 2450
3535 Market Street
Philadelphia, PA 19104
Phone: (215) 596-1183
1-800-379-9042
Fax: (215) 596-0753
(Delaware, District of Columbia,
Maryland, Pennsylvania, Virginia, West Virginia)
Ms. Oleta Crain, RA
1801 California Street, 905
Denver, CO 80202-2614
Phone: (303) 391-6756
1-800-299-0886
Fax: (303) 391-6752
(Colorado, Montana, North Dakota,
South Dakota, Utah, Wyoming)
Region IV: Atlanta
Region IX: San Francisco
Ms. Delores L. Crockett, RA/Field Coordinator
1371 Peachtree Street, Room 323
Atlanta, GA 30367
Phone: (404) 347-4461
Fax: (404) 347-1755
(Alabama, Florida, Georgia, Kentucky, Mississippi
North Carolina, South Carolina, Tennessee)
Ms. Barbara Sanford, Acting RA
71 Stevenson Street, Suite 927
San Francisco, CA 94105
Phone: (415) 975-4750
Fax: (415) 975-4753
(Arizona, California, Guam, Hawaii,
Nevada)
Region Y: Chicago
Region X: Seattle
Ms. Sandra K. Frank, RA
230 S. Dearborn Street, Room 1022
Chicago, IL 60604
Phone: (312) 353-6985
1-800-648-8183
Fax: (312) 353-6986
(Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin)
Ms. Karen Furia, RA
1111 Third Avenue, Room 885
Seattle, WA 98101-3211
Phone: (206) 553-1534
Fax: (206) 553-5085
(Alaska, Idaho, Oregon, Washington)
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