Study Says Jobs Lost in Plant Closings Fell 28%

The number of people losing their jobs to mass layoffs or plant closings appears to have declined sharply last year, but one in four of them still exhausted their unemployment benefits before finding new work, the government said Thursday.

On the heels of President Reagan’s veto of a trade bill because it would require large companies to give workers 60 days’ advance notice of such layoffs, the Labor Department said the number of people losing their jobs in such a fashion in 1987 dropped 28% from 1986 in 11 states.

In 1987, a total of 195,950 workers were caught up in mass layoffs or plant closings in the 11 states, compared to 272,436 in 1986, the Bureau of Labor Statistics said in its first comprehensive report on the issue.

The number of plant closings or mass layoffs--defined as 50 or more workers in any three-week period--dropped by nearly one-third, from 1,370 in 1986 to 941 last year, the bureau said.

“The improvement reflected the overall economic expansion (in which) employment was up by 10% and the number of persons unemployed was down by 8% in those 11 states,” the bureau said.

The 11 states--Alabama, Arizona, Arkansas, Louisiana, Massachusetts, Nevada, New Mexico, Oklahoma, Texas, Washington and Wisconsin--account for about 25% of the nation’s total employment.

Jobless Rate Falls

Congress in 1983 ordered Labor Department statisticians to start conducting the survey after the nation’s unemployment rate soared to 11.4% and the rolls of the unemployed grew to 12.5 million during the first two years of Reagan’s Administration.

Since then, the jobless rate has dropped to 5.6%--the lowest since 1974--with fewer than 7 million people now out of work in the longest peacetime economic expansion in U.S. history.

While 1986 figures were available for only 11 states, the 1987 figures cover 29 of them, representing 55% of the nation’s work force.

Lewis Siegel, the Labor Department economist in charge of coordinating the effort, said figures were being collected this year for 49 states, excluding only Oregon.

Of the 406,887 workers in the 29 states who lost their jobs last year to mass layoffs or plant closings, 78% or 319,343 filed claims for unemployment insurance benefits, indicating that they did not have a new job lined up when they lost their old one.

The government tracked those people through state employment offices and found that 85,548, or more than one-fourth of them, exhausted their unemployment benefits--an average $139 a week with a 26-week maximum in most states--before finding new work.

The report was hailed by advocates of the 60-day advance notice requirement that Reagan cited as a major reason why he vetoed the 1,000-page trade bill Tuesday.

Most Get No Warning

“With that kind of advance notice, many of these people would have had an opportunity to seek new jobs while currently employed and would likely not have had to draw unemployment insurance,” said John Zaluskey, an economist for the AFL-CIO.

The advance notice provision was approved by Congress after surveys by the Labor Department and the General Accounting Office showed two of every three U.S. workers caught up in such layoffs get no warning.

The National Academy of Sciences said in a report last year that the Reagan Administration’s reliance on “voluntary” notices is “not providing workers with the . . . ‘best practice’ minimum of two or three months to adjust successfully to job loss.”

The academy estimated that advance layoff notices would reduce by 25% the time a laid off employee is out of work, saving hundreds of millions of dollars in unemployment benefits.