NCPA - National Center for Policy Analysis

Layoff Rate Remains Constant

October 26, 1996

After correcting for a statistical error, the Labor Department's Bureau of Labor Statistics now says that the rate of layoffs in the workforce in the middle of the decade remained roughly the same as in the early 1990s. However, the numbers of people who said they had lost a job increased in the middle of the decade.

The original report appeared to show that both the rate and numbers of layoffs had declined in the past few years. BLS agreed to correct the flaw after it was pointed out by Princeton University researcher Henry Farber.

  • Some 8 percent of the labor force identified themselves as having involuntarily lost a job from 1993 through 1995 -- compared with 8.2 percent in the 1991 through 1993 survey.
  • Those figures remain far above those reported under the Reagan administration in the mid-to-late 1980s -- when the rate of layoffs dropped as low as 5.5 percent.
  • About 9.4 million people lost jobs from 1993 through 1995 -- compared with 9.2 million in the 1991 through 1993 period.

While the Clinton administration seized the original numbers to claim that the worst of the layoffs had passed, the Chairman of his Council of Economic Advisers, Joseph E. Stiglitz, responded to the less favorable new numbers by challenging their statistical validity.


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