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Back to Work: United States

Improving the Re-employment Prospects of Displaced Workers

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Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is part of a series of nine reports looking at how this challenge is being tackled in a number of OECD countries. It shows that the United States has a relatively high rate of job displacement and that only one in two affected workers find a new job within one year. Older displaced workers and those with a low level of education fare worst. Contrary to most other OECD countries, displaced workers have long been a target group for policy intervention, and a number of system features, like rapid response services, are promising. But the success of US policies is limited because overall funding for the workforce development system is insufficient and because only trade-related job displacement comes with generous entitlement for training and better benefits.

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Job displacement in the United States and its consequences

This chapter examines the prevalence and consequences of job displacement in the United States, and the impact of recent cyclical and structural evolutions in the US economy. Restructuring in the United States is often done through layoffs but the flexible labour market also means that many displaced workers find adequate jobs again. Nevertheless, only about one in two of them find a new job within one year and many suffer great damages in the form of long periods of unemployment and significant wage losses.

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