25 years ago: 11.5 million US workers lost jobs in plant shutdowns from 1979 to 1984

[Hannah Bell]

On February 4, 1986, Pres. Ronald Reagan delivered a State of the Union Address hailing an alleged US recovery from the deep recession of the 1980s. He said the economy was “on the move,” driven by “sunrise industries,” 37 straight months of economic growth, and an official unemployment rate a 4 percent, down from 12 percent in 1980.

The reality of the “Reagan recovery” was massive social dislocation and the gutting of basic industry, as a Congressional report released two days later revealed. It found that between 1979 and 1984, a staggering 11.5 million workers lost their jobs due to plant or factory shutdowns. Only 60 percent of them found new jobs during the same period, and most of these found work in low-paid service sector jobs. Among the displaced, many were middle-aged manufacturing workers “with long and stable job histories,” the Congressional Office of Technology Assessment found. The manufacturing areas of the Northeast and the Midwest were particularly hard hit.

This devastation was the result of a conscious policy of the US ruling class, pursued by both Republicans and Democrats. In 1979, President Jimmy Carter’s selection to head up the Federal Reserve Board, Paul Volcker, dramatically increased interest rates on bank lending. This “shock therapy” created a tidal wave of plant shutdowns, farm foreclosures, and high unemployment, that were used as a battering ram against strike activity. The basic aim was to break the resistance of the working class to a corporate assault on jobs and wages after the high level of strike activity in the 1970s. This attack was announced by Reagan’s crushing of the PATCO strike of air traffic controller in 1981, with the complicity of the AFL-CIO labor bureaucracy.

http://www.wsws.org/articles/2011/jan2011/twih-j31.shtml#top

[RegieRocker]

1. There is nothing wrong here

(waving hand in Jedi motion) everything is OK, no protests are necessary.

[Starry Messenger]

2. k&r

[M155Y_A1CH]

3. I remember...

it sucked then too.
Why do our "leaders" want to hurt us?
:shrug:

[RKP5637]

4. Good question, I was thinking similar today, much of the political rhetoric of

this country over the years has often been aimed at hurting the citizens. It's one of the evil sides of capitalism, profit at any cost and competition above cooperation.

[Starry Messenger]

6. They don't see us.

They serve the companies, not us. Any crumbs we get from the table after capitalism is served are sold to us as gravy.

[RKP5637]

27. And we don't have power, we are basically voiceless. Money connotes power, so

we lose in two areas, power and money.

[JVS]

9. Because they aren't us.

[Still Blue in PDX]

5. I remember it well, a year of unemployment for my husband in 1982. nt

[Art_from_Ark]

7. 1982 was truly a forgettable year

[hfojvt]

8. I am wondering where those stats come from

"On February 4, 1986, Pres. Ronald Reagan delivered a State of the Union Address hailing an alleged US recovery from the deep recession of the 1980s. He said the economy was “on the move,” driven by “sunrise industries,” 37 straight months of economic growth, and an official unemployment rate a 4 percent, down from 12 percent in 1980."

According to the BLS, in December 1985 the unemployment rate was 7 percent and in January 1986 it was 6.9%. For 1980 the unemployment rate varied from a low of 6.3% in January to a high of 7.8% in July and finished the year at 7.2%. It was never 12% even at the peak of the recession. The highest point was in December 1982 when it was 10.8%. It got as low as 5.3% by December 1988, but it never got as low as 4% until the Clinton years.

The idea that 10.5 million jobs were lost and that only 60% of those people found jobs does not seem to fit the historical stats either. In January 1979 there were 97.948 million people employed and the labor force participation rate was 63.6%. In 1984, the participation rate varied from 63.9% in January to 64.6% by December and the number of people employed rose from 103.2 million to 106.2 million by December 1984.

So they make a nice series of arguments, but the facts don't seem to back them up.

http://data.bls.gov/cgi-bin/surveymost?ln

[Hannah Bell]

10. They're using U-6. It was 12% in 1980; U-3 hit 7.8 the same year & peaked at 10.8% 12/82.

http://research.stlouisfed.org/fred2/data/UNRATE.txt

http://www.davemanuel.com/investor-dictionary/u6-unemployment-rate/



But where they got the 4% i have no clue. and yeah, it seems a bit sloppy.

This (from BLS) appears to be the source for the rest:

http://www.bls.gov/opub/mlr/1985/06/art1exc.htm

It's talking about as of 1985.

So you can take up the discrepancies with the BLS.

I'd suspect it has to do with overall new entries into the labor force.

[hfojvt]

19. except the article says

"an official unemployment rate a(t) 4 percent, down from 12 percent in 1980."

"an official unemployment rate" does not usually mean U-6

And reading that report changes the numbers of the 40%.

"A total of 11.5 million workers 20 years of age and over lost jobs because of plant closings or employment cutbacks over the January 1979—January 1984 period. Those who had worked at least 3 years on their jobs—the focus of this study—numbered 5.1 million."

"Of the 5.1 million displaced workers, about 3.1 million had become reemployed by January 1984, but often in different industries than in the ones they had previously worked. About 1.3 million were looking for work, and the remaining 700,000 had left the labor force."


So right away the report narrows the focus from 11.5 million down to 5.1 million. The other 6.4 million were apparently young kids or job-hoppers - they had less than 3 years on the job when they lost it.

And since the job loss period is the same as the time of the report, it is not surprising that some had not gotten other work. The report said that 5.1 million jobs were lost from 1979-Jan 1984 and that 3.1 million had gotten other jobs by Jan. 1984. But some of those job losses must have happened in late 1983. At least there is nothing to say that they didn't. If a plant closes in October 1983 (or December 1983), it is not surprising if many of the displaced workers have not found jobs by Jan. 1984.

The report would carry more weight if the two periods were not the same. How many, for example, had found jobs by January 1985? How many who lost jobs before Jan. 1983 (or June) had found jobs by Jan. 1984? For all we know, 95% of those 1.3 million who were looking for work in Jan. 1984 had found it by June of 1984.

[Hannah Bell]

21. No, the official unemployment rate doesn't usually mean u-6, & i don't know where

they got 4%, as i already said.


as for the rest, take it up with the bls, because it's from a bls report, as i posted before. as the numbers are from bls, not sure what you're griping about. if you think the reagan recession didn't do big damage, you weren't there.

[hfojvt]

25. it's not the BLS report though - it is the article

the article says "a staggering 11.5 million workers lost their jobs due to plant or factory shutdowns. Only 60 percent of them found new jobs during the same period, and most of these found work in low-paid service sector jobs."

And those two claims are not true. When the BLS report says that 60% found new jobs, they are talking about 60% NOT of 11.5 million but of 5.1 million. As the report says "Of the 5.1 million displaced workers, about 3.1 million had become reemployed by January 1984."

There's the 60%, but not of 11.5 million, only of the 5.1 million that the study looked at.

That "most of these found work in low-paid sevice sector jobs" does not fit the report either. Because the report summary says
"Of the 3.1 million displaced workers who were reemployed, about half were earning as much or more in the jobs they held when surveyed than in the ones they had lost."

Further, of the 733,000 who left the labor force, it seems that almost half of them took early retirement. 205,000 of them were over age 55 and another 128,000 were over age 65. I don't see early retirement as a huge hardship, even though retired people are often claiming they are bored or go back to work seeking more money even though their retirement income if often the same or more than my wage income.

I was a college sophomore in 1982, so I was there but not there. Whether the Reagan recession did damage is one thing, whether we can show the damage it did my misquoting a report is another thing. Unfortunately, the article does the latter.

[Hannah Bell]

26. From the BLS link I already gave you:

* A total of 11.5 million workers 20 years of age and over lost jobs because of plant closings or employment cutbacks over the January 1979—January 1984 period. Those who had worked at least 3 years on their jobs—the focus of this study—numbered 5.1 million.

* Of the 5.1 million displaced workers, about 3.1 million had become reemployed by January 1984, but often in different industries than in the ones they had previously worked. About 1.3 million were looking for work, and the remaining 700,000 had left the labor force.

* Of the 3.1 million displaced workers who were reemployed, about half were earning as much or more in the jobs they held when surveyed than in the ones they had lost. However, many others had taken large pay cuts, often exceeding 20 percent.

http://www.bls.gov/opub/mlr/1985/06/art1exc.htm


If you have a problem with the data, take it up with BLS. I have no idea what you're bitching about. I don't see the big discrepancy you do.

[Hannah Bell]

11. Looking a little closer, I find:

Jan 1980 U-3 employment = 99.879 million

Jan 1984 U-3 employment = 103.201 million (+ 3.322 million jobs = +3.3% v. 1980)

Dec 1984 u-3 employment = 106.223 million (+ 6.344 million jobs = +6.3%)


US population 1980 = 227 million

US population 1984 = 235 million (+ 8 million = +3.5% v. 1980)


Not in labor force

1/80 = 61.199 mill
1/84 = 64.508 mill (+3.3 million = +5.4% v. 1980)
12/84 = 63,278 mill (+2.0 million = +3.3%)

40% of 11.5 million = 4.6 million




Labor force participation rate


I suggest that the LFPR for the 80's doesn't tell you much about whether laid-off factory workers found other employment, as it's the period when women were entering the workforce in unprecendented numbers -- that's the main reason for the growth of the workforce circa 1966-1990 compared to the period before it.

You can see there's a lag in the 80's & then continued rise in the 90's.

The LFPR also doesn't distinguish between full & part-time work.

So the fact that the LFPR didn't decrease (but didn't grow much either) in the 80's -- can represent women getting clerical jobs even though factory workers aren't finding work. And indeed, that was the case -- I was one of them, I had a college degree, while my brother, who did construction work, went through a hard period of unemployment & underemployment.

[old mark]

12. K&R- HB, I was working in 3 large manufacturers who went away in that period...

I worked for a short time for Bethlehem Steel, in Bethlehem, PA...it's now a casino and several shops.
I worked as a contract factory planning designer at Western Electric, a Bell company manufacturing arm...we designed developed and constructed the most efficient chip manufacturing clean room in the world at that time, and sent it to Singapore.
I also worked at the old Allentown plant of Mack Trucks as a designer...They were bought by Pugeot and no longer are in business in that location, their former World Headquarters.

These companies alone supported many thousands of families, and the money they generated supported many thousands more.

When I graduated high school in 1965, a high school graduate could expect to find a long term, even life long manyfacturing job that paid enough in money and benefits to support a family, buy a good house and cars, etc...This is no longer true, AFAIK...probably not even a dream any more to many.


mark

[pampango]

13. That was all pre-WTO, pre-China's emergence and pre-"free trade agreements". Reagan proved

that you can hurt the middle class by breaking unions, cutting taxes for the rich, weakening the social safety net and getting rid of business and market regulation.

[Mimosa]

14. That's when it all began.

And in the late 1980s, early 90s the rest of manufacturing jobs left. Americans were given news stories (propaganda) telling us in the future our economy would be a hi tech 'service' type economy.

[Nikia]

15. There was a huge decline in my hometown

Of average income, of tax base, of retail, and population. People's values began to change and for the first time since such things existed, school levies got voted down.
When my great grandmother died in 1996, we found the 1976 bicentenniel edition of the hometown paper which spoke about our great history and how we could continue to expect prosperity. I thought about how much things had changed.

[Hannah Bell]

22. mine too. it has never come back.

[SmileyRose]

16. Recovery because all the "lazy" factory workers spent zillions on college

Now they are in their 50's and back out on the street because the fuckers with all the money decided college people in India are cheaper.

[Brickbat]

17. It still hurts to read about that. K&R to remember that it was a deliberate wrecking job.

[TBF]

18. They continually wage war on us, and call it "the business cycle".

Thank you for remembering, and providing details for those who are young and have no idea what went down. My dad worked in a foundry in Wisconsin. In the early 80's he was finally forced to retire due to his military injuries (he proudly made it to 15 years, driving forklift at the end, so he could get a small pension along with his disability). It is one that is still functioning, though no idea whether it still employs as many folks as it did back in the day. They ran 3 shifts back int he 70s, and the piece work paid well. High school graduates were able to buy houses, cars, and had insurance for their families.

[Hannah Bell]

23. agree. you don't quite get it until you've lived through it a few times.

people need to teach their children so they don't get blindsided by it.

i've been through at least three property bubbles & in each one someone in my family got caught.

[livetohike]

20. Reagan decimated Pittsburgh and the three state region

My Dad was a steelworker, only his long time seniority kept his job for him during that time. We had many relatives and friends taking advantage of the free government cheese. It was a really ugly time in Pgh.

[Still Blue in PDX]

30. I was there for that.

Bad times.

[Omaha Steve]

24. K&R!

[RainDog]

28. Reagan: The architect of America's destruction

and to think, he was also out of his mind at the time... no need to be in your right mind to whore for corporate power, however.

[RKP5637]

29. Yep, is that ever true. And worshiped by the R's. So telling. n/t