Plant Closings

Limited Advance Notice and Assistance Provided Dislocated Workers Gao ID: HRD-87-105 July 17, 1987

GAO surveyed 2,600 business establishments to determine the: (1) extent of business closures and permanent layoffs between January 1983 and December 1984; (2) length of advance notice businesses provided to affected workers; and (3) assistance employers offered to their dislocated workers.

GAO found that: (1) 1.3 million workers lost their jobs between 1983 and 1984 due to closures and permanent layoffs; (2) 60 percent of business closures and layoffs occurred in the manufacturing sectors; and (3) one-third occurred in industries which the Department of Labor certified as trade-impacted. GAO also found that: (1) although labor organizations and some business associations recognize the need for advance notice of an impending closure or layoff, 80 percent of the businesses it surveyed provide an average of only 7 days advance notice to their blue-collar and white-collar workers prior to layoffs; (2) while businesses usually provide their displaced workers with income maintenance benefits, few offer such benefits as continued health-insurance coverage, counseling, and job-search assistance; and (3) proposed legislation to expand federal assistance to dislocated workers would significantly increase the amount of available assistance and require states to establish rapid-response mechanisms to increase the potential for early intervention.

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