MLS Program Response

 70 Monthly Labor Review August 2006

MLS Program Response

Conducting the Mass Layoff Statistics

program: response and findings

Due to careful collaboration between BLS and State agencies

after Hurricane Katrina, data collection challenges

facing the Mass Layoff Statistics program were overcome;

the highest number of mass layoff events

occurred in accommodation and food services

Sharon P. Brown

and

Patrick Carey

Sharon P. Brown is

division chief of the

Division of Local

Area Unemployment Statistics,

Office of Employment and Unemployment Statistics.

Patrick Carey is a

senior economist in

the Division of Mass

Layoff Statistics and

State Systems,

Office of Employment and Unemployment Statistics.

E-mail:

brown.sharon@

bls.gov;

carey.patrick@

bls.gov

The devastation caused by Hurricane Katrina

created several data collection and analytical challenges for the Bureau of Labor Statistics’ (BLS) Mass Layoff Statistics (MLS) program. The sheer number of mass layoffs based on

initial claims filings for unemployment insurance

(UI) against establishments led to acute workload

problems in affected States. There was a need to

ensure that mass layoffs directly or indirectly related to Hurricane Katrina were consistently identified by analysts working on the MLS program in

all States. Another challenge was understanding

and resolving apparent contradictions between

data on potential layoff events based solely on administrative data and responses from the employers themselves. While the MLS program has undertaken special data collection efforts in the past,

nothing matched this collection in terms of immediacy, magnitude, and geographic concentration.

BLS also requested special interim reporting of

Hurricane Katrina-related layoff activity in order

to verify that procedures were adequately being

followed and to provide important and relevant information quickly. The success in meeting these

challenges was grounded in the ongoing collaboration that exists between BLS and the State agencies in this program. This article details the efforts

made to identify and track layoff activity related

to Hurricane Katrina and provides some of the resulting information.1

MLS program description

Among the key economic data developed by BLS,

the MLS program provides important and detailed

information on a subset of establishments and job

losers experiencing dislocation. Using a combination of administrative and employer interview

data, the MLS program identifies, describes, and

tracks the effects of major job cutbacks from establishments with 50 or more workers who file for

unemployment insurance.2 The program is a Federal-State cooperative program, with BLS responsible for program specifications, data review, and

publication of monthly and quarterly news releases, and States responsible for data collection,

employer interviews, data development, and their

own publications.

To define the relevant population, the MLS program uses administrative statistics on establishments covered by unemployment insurance laws

and on unemployment insurance claimants who

previously worked in these establishments. The

administrative data provide important economic

information on the establishment—the State where

the establishment is located and its detailed industry code—and on the worker demographics—age,

gender, location of residence, and status in the

unemployment insurance system. The program

yields information on the individual’s entire spell

of insured unemployment, up to the point at which
Monthly Labor Review August 2006 71

regular unemployment insurance benefits are exhausted.

MLS establishment data are the universe of establishments

meeting the program specifications, and the claimant data

are all claims filed against these establishments. MLS specifications concerning the size of establishment, number of

claims, and timing of filing are applied to the administrative

data to identify the MLS economic event; however, they also

limit the scope of the program. Only relatively large and

concentrated layoffs are identified through the MLS size limitation on establishments and the requirement that at least 50

initial claims for unemployment insurance were filed against

the establishment in a consecutive 5-week period.

The layoffs based solely on administrative data are viewed

as “potential” extended mass layoff events. All employers in

private nonfarm establishments meeting the MLS layoff event

trigger of 50 initial claims in a consecutive 5-week period

are interviewed. The employer is first asked whether the

separations last at least 31 days. If so, information is obtained

on the total number of affected workers, the economic reason for the layoff, the open/closed status of the worksite, recall expectations, and, in nonseasonal events, relocation of

work. These layoffs, based on information from the employer

interview, are considered “extended” layoff events. The

employer interview is conducted via telephone and largely in

an unstructured manner, by trained State employment security agency analysts. Employer participation in the MLS interview is voluntary, with a 96-percent response rate in 2005.

The employer is not provided with a copy of the questionnaire or response options in advance of the interview. From

responses provided by the employer, the analyst codes the

information into standard categories.

The MLS program provides data nationally and by State

and selected areas. The statistics are among the timeliest

economic measures issued by BLS. Monthly data on potential mass layoff events and laid-off workers (without regard

to duration of the layoff) by State and industry are issued

about 3 weeks after the end of the reference month. Data on

extended mass layoffs (those lasting more than 30 days) are

issued quarterly about 7 weeks after the end of the reference

quarter.

Identifying Katrina-related layoffs

The MLS program response to identifying and tracking layoff

activity related to Hurricane Katrina borrowed greatly from

the program’s experiences in reacting to the September 11,

2001, terrorist attacks. As in the earlier situation, BLS issued

immediate instructions to States on the MLS reason for layoff

that should be used for Katrina-related layoffs and stressed

the need for special, timelier data submittals.

In an effort to ensure consistent reporting from all States,

BLS instructed States to use “weather-related” as the primary

reason for separating workers if the layoff event was related

to Hurricane Katrina and the worksite was located within the

Federal Emergency Management Agency’s (FEMA) hurricane

disaster areas. “Weather-related” is used as the reason for

layoff to describe situations where activity at an establishment has been curtailed because of unusual or extreme

weather conditions, including flooding, hail, and so forth.

For employers who cited the effects of the hurricane as a

reason for layoff but were located outside of the FEMA-designated areas, States were instructed to use another primary

reason (of an economic nature) to describe the layoff and

“weather-related” as a secondary reason. An example of a

layoff indirectly related to Katrina is an establishment that

curtailed operations because of a shortage of parts and/or

materials from its supplier whose production or delivery was

affected by the hurricane. In such an example, “material

shortage” is the primary reason for layoff, and “weather-related” is the secondary reason.

BLS also instructed States to send interim reports of extended mass layoff data for the purpose of timelier monitoring and reporting of layoff activity related to Hurricane

Katrina. This modification of the usual quarterly reporting

of extended mass layoff activity lasted for 3 months.

Data collection in affected States

Five States were affected by Hurricane Katrina insofar as

each had areas within it that FEMA designated for assistance.

Identifying plant closings and mass layoffs associated with

Hurricane Katrina. Hurricane Katrina’s impact was first

observed in the MLS program with the September 2005 data.

The hurricane struck the gulf coast on August 29, and the

September 2005 reference period for identifying potential

layoff events includes the Sunday–Saturday calendar weeks

from August 28 through October 1. Although the physical

damage caused by Hurricane Katrina touched Alabama,

Florida, Louisiana, Mississippi, and Texas, elevated mass

layoff activity was concentrated in just two States—Louisiana and Mississippi. (See table 1.)

In September 2005, Louisiana and Mississippi reported

791 and 113 layoff events, respectively, far more layoff activity than either State had ever reported before. The highest

numbers of events in a month previous to September 2005

were 36 events in Louisiana (June 2001) and 19 events in

Mississippi (May 1995). The dramatic increases in events

for these two States, particularly in Louisiana, posed quite a

data collection challenge. As a result, BLS staff from the

Dallas (for Louisiana) and Atlanta (for Mississippi) regional

offices assisted those States with interviewing employers.

Monthly mass layoff activity based on administrative data

dropped sharply in Louisiana and Mississippi in the months
MLS Program Response

 72 Monthly Labor Review August 2006

following September. As a result, BLS instructed States to

cease special data collection activities with the data for December 2005. Thus, monthly mass layoff data for the September–December 2005 period in Louisiana (843 events) and

Mississippi (121 events) were the focus of potential extended

layoff activity related to the effects of Hurricane Katrina.

Identifying extended mass layoffs. State analysts are instructed to wait 30 days after an event reaches 50 initial

claims so that the employer can confirm with certainty that

the minimum duration criterion for an extended mass layoff

has been met. For layoff events that triggered in the week of

August 28–September 3, employer contact was not made

until at least the week of October 2–9. As State and BLS staff

started making phone calls, it became apparent that many

employers in Louisiana and Mississippi either did not have a

layoff lasting more than 30 days (thus theirs was a temporary

layoff) or did not initiate any worker separations at all. As

part of normal program operation, information on temporary

mass layoff events and those for which the employer states a

layoff did not occur are not transmitted to BLS. In the case of

Hurricane Katrina, however, BLS instructed Louisiana and

Mississippi to provide information on such events in an effort to account for and report on all potential mass layoff

activity in the September–December 2005 period.

Out of the 964 potential layoff events that reached 50 initial claims in a 5-week period criterion during the September–December period, analysts attempted to contact employers in 868 private nonfarm layoff events in Louisiana and

Mississippi. (The MLS program excludes potential events

from agricultural and government establishments from the

employer interview component.) Based on information obtained from employers, 484 private nonfarm mass layoff

events were not classified as an extended event because the

criteria for an extended mass layoff were not met. (See

table 2.) Of the 367 employers who did not lay off any workers despite the UI activity filed against the firms, 47 percent

stated employees did not return to work that was still available and another 29 percent continued to pay employees for

some period of time after the hurricanes.

Accounting for another 22 percent (107 events out of 484)

of the events not meeting the extended mass layoff criteria

were employers that laid off workers for less than 31 days.

In 10 nonlayoff events, employers cited a layoff that lasted

Potential mass layoff events in States affected by Hurricane Katrina, not seasonally adjusted, 2005

Total ............................................................. 16,466 244 700 956 155 491

January .......................................................... 2,564 85 62 24 ( 1 ) 57

February ......................................................... 810 8 36 7 5 24

March ............................................................. 806 7 36 4 0 35

April ................................................................ 1,373 10 62 16 ( 1 ) 45

May ................................................................. 986 9 53 10 5 49

June ................................................................ 1,157 8 93 21 7 37

July ................................................................. 1,981 58 86 20 5 51

August ............................................................ 645 5 35 11 6 30

September ...................................................... 1,662 20 40 791 113 50

October........................................................... 905 4 36 3 4 38

November ....................................................... 1,254 6 100 36 ( 1 ) 25

December ....................................................... 2,323 24 61 13 ( 1

 ) 50

Table 1.

Texas

Month Total

United States Alabama Florida Louisiana Mississippi

Mass layoff events

1 Data do not meet BLS or State agency disclosure standards.

NOTE: The States shown all received some Federal

Emergency Management Agency (FEMA) assistance because of

Hurricane Katrina.

Potential and extended private nonfarm mass

layoff activity in Louisiana and Mississippi not

related to Hurricane Katrina, September–

December 2005

Total, private nonfarm potential events ........................ 868

Extended mass layoff events, hurricane related ........... 358

Extended mass layoff events, but not hurricane

related.......................................................................... 26

Total excluded events .................................................... 484

Not a layoff .................................................................. 367

Employees did not return ......................................... 174

Employers continued paying employees ................. 108

Other ........................................................................ 85

Temporary layoff ......................................................... 107

Permanent, but less than 50 workers laid off ............. 10

Measure

Table 2.

Layoff events
Monthly Labor Review August 2006 73

more than 30 days, but fewer than 50 people were separated

from their job.

Data resulting from Hurricane Katrina

Private nonfarm extended mass layoffs directly or indirectly

related to Hurricane Katrina totaled 358 events and 57,551

separations over the September–December 2005 period.

(See table 3.) These layoff events comprise both situations

where contact was successful and the employer confirmed

the layoff was related in some way to Hurricane Katrina,

as well as events where analysts were unable to contact

employers.

State analysts are instructed to code events as extended

mass layoff events when they have exhausted attempts to

contact employers. In this case, individual data elements

obtained during the employer interview, including the reason

for layoff, are normally set to “not available.” In response to

Hurricane Katrina, BLS directed States to use “weather-related” as the primary reason for establishments located within

a FEMA-designated hurricane disaster area, despite unsuccessful attempts to reach employers. The physical damage to

workplaces and infrastructure caused by Hurricane Katrina

likely contributed to problems contacting some employers.

Such noncontacts accounted for 46 percent of the 358 layoff

events directly and indirectly related to Hurricane Katrina.

Establishment characteristics. The highest number of

worker separations in extended mass layoff events related to

Hurricane Katrina occurred in accommodation and food services, followed by retail trade and healthcare and social assistance. (See table 4.) In contrast, employers in manufacturing and construction reported the most separated workers

in nationwide extended layoff events not related to the hurricane over the same September–December 2005 period.

Claimant characteristics. Demographic information captured from the UI initial claim record by the MLS program

offers a look at workers associated with extended mass layoff events. Table 5 displays the percentage of initial claimants by selected age, gender, and race/ethnicity groupings in

hurricane- versus nonhurricane-related layoffs over the September–December 2005 period. Claimants younger than 30

accounted for nearly 30 percent of all laid-off workers in hurricane-related extended mass layoff events, whereas the percentage drops to 18.1 percent in layoff events not related to

the hurricane. Women accounted for nearly 60 percent of UI

claimants in events related to the hurricane; in nonhurricanerelated events, the percentage drops to 32.7 percent. Black

claimants accounted for 56.5 percent of workers related to

the hurricane, but made up only 12.2 percent of the claimants in events not related to the hurricane.

The MLS program also collects information on the continuing impact of joblessness through the filing of continued

UI claims, up through the point of exhaustion. Table 5 shows

that 25.8 percent of the initial claimants in extended mass

layoff events related to the hurricane exhausted their UI benefits in reporting received thus far. This compares with a

7.0-percent UI benefit exhaustion rate for claimants in events

not related to Hurricane Katrina.

Demographic information associated with these claimants

receiving their final payments also reveals interesting differences between the populations of MLS claimants affected by

and not affected by the hurricane. Almost all age groups

experienced the same benefit exhaustion rate in hurricanerelated events, whereas the benefit exhaustion rate among

older workers is slightly higher in events not related to the

hurricane. Women had a benefit exhaustion rate that was

more than 7 percentage points higher than men in hurricanerelated events; in events not related to the hurricane, the difference narrows to 3 percentage points. For all racial/ethnic

Hurricane Katrina-related potential and extended mass layoff activity in Louisiana and Mississippi,

September–December 2005

 Potential layoff activity

Total ................................................................................................. 964 ... 136,930

Private nonfarm ............................................................................ 868 ... 107,341

 Extended mass layoffs

Total, hurricane-related ................................................................... 358 57,551 48,161

Directly related to the hurricane .................................................. 355 55,873 47,425

Contact with employer successful ............................................ 191 32,415 24,049

Contact with employer unsuccessful ........................................ 164 23,458 23,376

Indirectly related to the hurricane ................................................ 3 1,678 736

Measure

Table 3.

Initial claimants for

unemployment

insurance

Layoff events Separations
MLS Program Response

 74 Monthly Labor Review August 2006

Extended mass layoff events and separations, related to and not related to Hurricane Katrina nationwide, by

major industry sector, September–December 2005

 Total, private nonfarm ..................................................... 358 57,551 1,600 289,285

Mining ..................................................................................... ( 1

 ) ( 1 ) 29 3,731

Utilities .................................................................................... ( 1

 ) ( 1 ) 3 519

Construction ............................................................................ 7 938 517 70,093

Manufacturing ......................................................................... 22 2,499 471 89,017

Wholesale trade ...................................................................... 7 522 28 4,123

Retail trade ............................................................................. 63 10,958 82 22,942

Transportation and warehousing ............................................ 15 2,375 39 8,262

Information .............................................................................. ( 1

 ) ( 1 ) 25 4,723

Finance and insurance ........................................................... ( 1

 ) ( 1 ) 19 2,768

Real estate and rental and leasing ......................................... ( 1

 ) ( 1 ) 3 665

Professional and technical services ....................................... 6 422 42 6,724

Management of companies and enterprises .......................... 0 0 5 994

Administrative and waste services ......................................... 37 5,250 182 33,803

Educational services .............................................................. 6 3,592 3 541

Healthcare and social assistance ........................................... 55 7,461 24 4,399

Arts, entertainment, and recreation ........................................ 14 5,157 47 18,656

Accommodation and food services ........................................ 100 15,833 68 15,278

Other services, except public administration ......................... 9 1,122 13 2,047

Unclassified establishments ................................................... 0 0 0 0

Events

Hurricane related

Separations

Industry

Table 4.

Events Separations

Not hurricane related (nationwide)

1 Data do not meet BLS or State agency disclosure standards.

Hurricane

related

Demographic characteristics of the insured unemployed in extended mass layoff events related to and not

related to Hurricane Katrina nationwide, September–December 2005

 Total ................................................................................. 100.0 100.0 25.8 7.0

 Age

30 years of age or younger ..................................................... 29.8 18.1 26.0 7.1

30–44 ...................................................................................... 31.7 36.2 27.2 6.3

45–54 ...................................................................................... 18.1 27.1 26.5 6.7

55 years of age or older .......................................................... 11.3 16.7 26.5 8.8

Not available ............................................................................ 9.2 1.9 18.3 5.5

 Gender

Male ......................................................................................... 40.5 67.0 21.4 6.0

Female .................................................................................... 59.5 32.7 28.8 9.0

Not available ............................................................................ 0 .4 33.3 5.1

 Race/ethnicity

White ....................................................................................... 29.2 64.4 13.2 5.6

Black ........................................................................................ 56.5 12.2 33.0 9.1

Hispanic origin ........................................................................ 5.4 13.9 13.4 11.3

American Indian or Alaska Native .......................................... .4 .6 14.7 7.8

Asian or Pacific Islander ......................................................... 2.6 1.8 17.8 5.3

Not available ............................................................................ 5.8 7.2 35.0 7.6

Percentage of

initial claimants

Not hurricane

related

Characteristics

Not hurricane

related

Hurricane

related

Percentage of initial claimants

receiving final payments

Table 5.
Monthly Labor Review August 2006 75

groups, claimants in hurricane-related events were much

more likely to exhaust benefits than claimants in nonhurricane events. The biggest difference was among blacks (33.0

percent versus 9.1 percent).

The residency information also captured from the initial

claim record provides insight into where workers in extended

layoff events related to Hurricane Katrina were living when

they filed for UI benefits. (See table 6.) Of the more than

40,000 initial claimants associated with hurricane-related layoff events in Louisiana establishments, 60 percent resided in

Louisiana, followed by Texas (22 percent), Georgia (5 percent), and Mississippi (4 percent). Claimants in Louisiana

mass layoff events were living in the District of Columbia

and every State in the United States, with the exception of

Alaska. Among the more than 8,000 claimants in Mississippi events, 86 percent resided within Mississippi.

THE MLS PROGRAM is well poised to collect information on

employers’ decisions to engage in large-scale layoffs and

closings related to sudden and extreme events, as shown by

the response to the devastation caused by Hurricane Katrina.

The employer interview continues to be an important vehicle

for capturing key information on labor market decisions, as

underscored by the employer responses to layoffs in conflict

with UI claims filings. In addition, administrative data captured by the MLS program provides insight into the workers

most affected by mass layoffs, as well as the continuing spell

Initial claimants for unemployment insurance

in extended mass layoff events because of

Hurricane Katrina, by State of residence

Total, associated with layoffs

in Louisiana ............................ 40,124 100.0

State of residence:

Louisiana ................................ 24,248 60.4

Texas ...................................... 9,001 22.4

Georgia .................................. 1,910 4.8

Mississippi ............................. 1,478 3.7

Florida .................................... 622 1.6

Other (in 44 States and the

District of Columbia) ............ 2,768 6.9

Unknown ................................ 97 .2

Total, associated with layoffs

in Mississippi .......................... 8,037 100.0

State of residence:

Mississippi ............................. 6,880 85.6

Alabama ................................. 170 2.1

Florida .................................... 155 1.9

Other (in 42 States and

the Virgin Islands) ................ 832 10.4

State

Table 6.

Percent

to

total

Initial

claimants

for

unemployment

insurance

Notes

ACKNOWLEDGMENT: The authors thank Yang Guo for her assistance

in preparing the tables for this article. We also thank the MLS analysts in

Louisiana and Mississippi and the MLS regional office staff in Dallas and

Atlanta for their commitment to the MLS program and their hard work in the

face of data collection challenges from Katrina. 1 Hurricane Rita hit Louisiana and Texas on September 24, 2005, only

of joblessness. Capturing accurate and timely information

on an important labor force phenomenon such as mass layoffs reinforces the importance of the cooperative environment between BLS and State agencies.

26 days after Hurricane Katrina hit on August 29. Because of the difficulties in separating Katrina-related and Rita-related layoffs, the mass layoff

data in this article include some Rita-generated cases.

2

 For a detailed discussion of the Mass Layoff Statistics program, see

the program Web site at http://www.bls.gov/mls/home.htm.