Dislocated Workers:

Extent of Business Closures, Layoffs, and the Public and Private Response

HRD-86-116BR: Published: Jul 1, 1986. Publicly Released: Aug 15, 1986.

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Pursuant to a congressional request, GAO provided information on: (1) the extent of worker dislocation; and (2) private-sector and government programs to assist dislocated workers.

GAO found that: (1) an average of 2.3 million workers were dislocated annually between 1979 and 1984; (2) in 1983 and 1984, an additional 1.4 million workers were dislocated; (3) the manufacturing sector was most seriously affected, accounting for 66 percent of the dislocated workers; (4) many businesses indicated that competitive reasons, rather than bankruptcy or financial reorganizations, were the major reasons for closures and layoffs; and (5) over 35 percent of the closures and layoffs for establishments with 100 or more employees were in industries that were adversely affected by international trade. GAO also found that: (1) about half of the businesses experiencing layoffs offered workers severance pay, about one-third of the businesses offered placement assistance, and only 3 percent offered occupational training; (2) about 37 percent of the establishments offered dislocated workers both financial and placement assistance, but 36 percent offered neither; (3) assistance the federal government provided to dislocated workers through the Trade Adjustment Assistance Program decreased from $1.6 billion in 1980 to $53 million in 1985; and (4) while the Job Training Partnership Act Dislocated Worker Program has provided about $650 million in assistance since 1982, substantial program cuts have been budgeted for 1986 and 1987.

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