Economic News Release

Extended Mass Layoffs Associated With Domestic and Overseas Relocations, First Quarter 2004 Technical Note


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Technical Note
 
 
   The Mass Layoff Statistics (MLS) program is a federal-state program
which identifies, describes, and tracks the effects of major job cutbacks,
using data from each state's unemployment insurance database.  Establish-
ments which have at least 50 initial claims filed against them during a 
consecutive 5-week period are contacted by the state agency to determine 
whether these separations are of at least 31 days duration, and, if so, in-
formation is obtained on the total number of persons separated and the rea-
sons for these separations.  Establishments are identified according to in-
dustry classification and location.  Because of the employer contact com-
ponent, the BLS decided to use the MLS program as a vehicle for collecting 
additional information on offshoring and outsourcing associated with job 
loss, by adding questions that address movement of work.
   
Definitions
   
   Establishment.  A unit at a single physical location at which predom-
inantly one type of economic activity is conducted.
   
   Extended layoff event.  Fifty or more initial claims for unemployment
insurance benefits from an establishment during a 5-week period, with at
least 50 workers separated for more than 30 days.
   
   Layoff.  The separation of persons from an employer as part of a mass
layoff event.  (See below.)  Such layoffs involve both persons subject to
recall and those who are terminated by the establishment.
   
   Mass layoff.  Fifty or more initial claims for unemployment insurance
benefits from an establishment beginning in a given month, regardless of
duration.
   
   Worksite  closure.  The complete closure of either multi-unit or single-
unit establishments or the partial closure of a multi-unit establishment
where entire worksites affected by layoffs are closed or planned to be
closed.
   
Movement of work concepts and questions
   
   The term "moving work" means that the company experiencing the layoff
has reassigned work activities that were performed at a worksite by the
company's employees (1) to another worksite within the company; (2) to
another company under formal arrangements at the same worksite; or (3) to
another company under formal arrangements at another worksite.  The type 
of work activities subject to movement can include accounting, customer
service, cleaning, warehousing, etc.
   
   "Overseas relocation" is the movement of work from within the U.S. to
locations outside of the U.S.  "Overseas relocation" can occur within the
same company and involve movement of work to a different location of that
company outside of the U.S., or to a different company altogether.
   
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   "Domestic relocation" is the movement of work to other locations inside
the U.S., either within the same company or to a different company.
   
   "Overseas relocation" and "domestic relocation" are no longer used in
the same way as they were in earlier extended mass layoff news releases.
Therefore, the data presented in this news release are not comparable to
those that were presented in earlier news releases.
   
   Questions on movement of work and location are asked for all identified
layoff events when the reason for separation is other than "seasonal work"
or "vacation period."  Seasonal and vacation layoff events were excluded
because movement of work appears unlikely.
   
   Questions on movement of work are asked after the analyst verifies that
a layoff in fact occurred and lasted more than 30 days, and obtained the
total number of workers separated from jobs, the date the layoff began, and
the economic reason for the layoff.  If the reason for layoff is other than
seasonal or vacation, the employer was asked the following:
   
   (1) "Did this layoff include your company moving work from this loca-
tion(s) to a different geographic location(s) within your company?"
   
   (2) "Did this layoff include your company moving work that was performed 
in-house by your employees to a different company, through contractual ar-
rangements?"
   
   A "yes" response to either question is followed by:
   
   "Is the location inside or outside of the U.S.?" and "How many of the
layoffs were a result of this relocation?"
   
   Layoff actions are classified as "overseas relocation" if the employer
responds "yes" to questions 1 and/or 2, and indicates that the location(s)
was outside of the U.S.  Domestic relocation is determined if the employer
responds "yes" to questions 1 and/or 2 and indicates that the location(s)
was within the U.S.
   
   After asking the movement of work questions, the employer contact con-
tinues and responses are obtained for questions on recall expectations and 
open/closed status of the worksite.
   
Reliability of the data
   
   The identification of establishments and layoff events in the MLS
program and associated characteristics of claimants is based on ad-
ministrative data on covered establishments and unemployment insurance
claims, and, therefore, is not subject to issues associated with sampling
error.  Nonsampling errors such as typographical errors may occur but are
not likely to be significant.  While the MLS establishments and layoff
events are not subject to sampling error, and all such employers are asked
the employer contact questions, the employer responses are subject to non-
sampling error.  Nonsampling error can occur for many reasons, including
the inability to obtain information for all respondents, inability or un-
willingness of respondents to provide correct information, and errors made 
in the collection or processing of the data.  For the first quarter of 2004, 
outright refusal to participate in the employer contact accounted for 7.2 per-
cent of all private nonfarm events.
   
Other information
   
   Information in this release will be made available to sensory impaired
individuals upon request.  Voice phone:  202-691-5200;  TDD message referral 
phone:  1-800-877-8339.
   
   
   
   

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Last Modified Date: June 10, 2004
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