ERIC Number: ED311249
Record Type: Non-Journal
Publication Date: 1988-May
Reference Count: N/A
Advance Notice of Plant Closings: Benefits Outweigh the Costs. Briefing Paper.
Evidence overwhelmingly shows that providing workers with advance notice of layoffs generates substantial benefits (to displaced workers, their families, local communities, and the economy in general) that vastly outweigh any reasonable estimates of costs. Advance notice allows displaced workers to find work prior to their date of displacement, reducing the probability that they will suffer unemployment and also moderating temporary increases in area unemployment rates. The reduction in joblessness and the greater earnings that result were determined for male and female blue- and white-collar workers. The estimates imply substantial unemployment insurance savings and greater earnings for displaced workers. In the last year studied (1986), the number of workers who received unemployment benefits because of a job loss was 772,000. The savings of an estimated 3.8 fewer weeks of joblessness at the average weekly benefit of $140 would be $410 million, which is double the current costs of displaced worker programs. The most in-depth study of business practice regarding advance notice showed that the median notice to white-collar workers was 14 days, to union blue-collar workers was 14 days, and to nonunion blue-collar workers was 2 days in 1983 and 1984. Recent studies show that the productivity of a notified work force does not significantly decrease and that creditors and customers tend not to desert the company. (CML)
Descriptors: Cost Effectiveness, Dislocated Workers, Job Layoff, Personnel Policy, Reduction in Force, Unemployment, Unemployment Insurance
Economic Policy Institute, 1730 Rhode Island Avenue, NW, Suite 812, Washington, DC 20036 ($2.00).
Publication Type: Information Analyses
Education Level: N/A
Authoring Institution: Economic Policy Inst., Washington, DC.