Effects of Hurricane Katrina on Mass Layoff Statistics

The Mass Layoff Statistics (MLS) program is a federal-state program that identifies and tracks major job cutbacks. The program has two components, total mass layoffs (reported monthly) and extended mass layoffs (reported quarterly).

The monthly mass layoff reports are summaries of information on establishments that had at least 50 initial claims for unemployment insurance (UI) filed against them during a consecutive 5-week period. These mass layoff data are based solely on State administrative statistics (weekly filings for unemployment insurance) without regard to the duration of the layoff. Data are available by industry for the U.S. and each of the 50 States, the District of Columbia, and Puerto Rico.

The quarterly reports on extended mass layoffs are based on both State administrative data and employer-provided data from private sector nonfarm establishments. Thirty days after a mass layoff event has been identified, the establishment is contacted by the State Workforce Agency to determine if a layoff of at least 31 days in duration that involved at least 50 workers had taken place. If so, other information pertaining to the layoff is obtained, including the total number of workers laid off, the reason(s) for the layoff, pre-layoff employment levels, and recall expectations of the employer.

The impact of Hurricane Katrina was initially seen in MLS data collected for September 2005, through initial claims filings against establishments in the most severely affected States and elsewhere. A more complete picture of the impact will be seen in the extended mass layoffs statistics, where both direct and indirect effects will be collected through the employer interview using the “weather-related” reason for job loss. In order to provide the most current information possible, interim reporting procedures have been instituted that call for monthly data transmittals to BLS by the State agencies in mid-November and mid-December. BLS intends to publish the interim information on job loss associated, either directly and indirectly, with the hurricane in the monthly MLS news releases.

Although MLS program operations have been disrupted to some extent by the hurricane, BLS anticipates publishing the monthly and quarterly MLS data on their typical schedules. The questions and answers below provide more detailed information on MLS concepts and definitions, expected impacts on data development, and special procedures instituted by BLS to provide timely and accurate information on job loss associated with this unusual situation.

MLS CONCEPTS AND DEFINITIONS

1. When will the impact of hurricane Katrina be reflected in the mass layoff data?

2. The initial impact of Hurricane Katrina was seen in the monthly MLS data for September. The reference period for the monthly MLS data collection is August 28 through October 1. During this period, initial claims filed for regular State unemployment insurance will be aggregated against employers using a moving five-week period. Thus, claims associated with Hurricane Katrina, which struck the Gulf Coast on August 29, began to be seen in this report. (The August news release, issued on September 23, did not reflect any impact from the storm since its reference period ended prior to landfall.)

   The initial impact of Katrina in the extended mass layoffs data will be seen in the results of employer interviews for mass layoffs that occurred in September. BLS will receive these interview data at the end of October. Because of a desire to issue timely analyses of the impact of Katrina, BLS has instituted interim monthly reporting by State agencies to BLS of extended mass layoffs. BLS will include those results in the already scheduled MLS news releases as the data become available.

3. Will the relocation of some evacuees outside of their home States affect initial claims data used in the MLS program?

4. No. UI claims used by the MLS program are always associated with the establishment liable for UI purposes regardless of whether the person filing the claim is residing within that State or in another State. If it is the latter case, then an interstate liable claim is filed and the claim is transferred to the State where the establishment is located. For MLS purposes, there are no conceptual issues with the use of interstate liable claims. However, delays in processing of claims for statistical purposes could impact the identification of layoff events. States have been alerted to the importance of developing the UI claims input to MLS on a timely basis.

5. Are people who are receiving Disaster Unemployment Assistance (DUA) benefits included in the MLS data?

6. No. Only claims from the regular UI benefits program are in the scope of the MLS program.

7. How will the MLS program identify job loss associated with Hurricane Katrina?

8. MLS identifies 22 separate reasons for layoff, with the identification of a primary and secondary reason allowed for the layoff event. In the MLS program, “weather related” is defined as the reason for layoff when activity has been curtailed because of unusual or extreme weather conditions, including flooding, blizzard, hail, drought, early frost, tornado, fires from electrical storms, squalls, dust storms, etc. Therefore, “weather-related” will be used to identify job loss associated with Hurricane Katrina. Extended mass layoff events in establishments located in FEMA-designated disaster areas of Alabama, Florida, Louisiana, and Mississippi are the only ones that might be directly affected by Hurricane Katrina and the subsequent flooding, and thus be coded with a primary reason of “weather-related.”

9. What about layoffs not directly attributed to Hurricane Katrina?

10. The availability of the secondary reason field allows for identifying indirect effects of Hurricane Katrina. In all locations other than FEMA-designated areas, if the employer specifies an economic reason as the primary reason and states that the layoff was related to Katrina, then the event will be coded with a secondary reason of “weather-related” and will be considered an indirect effect of the hurricane.

    One economic reason for layoff is the disruption of petroleum products and supply caused by hurricane Katrina. These events should be coded with primary reason of “energy-related” (the excessive cost of energy or disruption of the supply of energy to the affected establishment) and a secondary reason of “weather-related.”

    DATA COLLECTION ISSUES

11. How will the employer interview be conducted in the Hurricane Katrina-damaged areas that have been evacuated and where phone services are limited?

12. Attempts will be made to contact all private nonfarm establishments that meet the criterion of having 50 or more initial claims in a 5-week period. States unable to reach an employer located in a FEMA-designated disaster area will code such establishments with a primary reason “weather-related,” and the other data items will be coded as “not available.” The events will be counted as extended mass layoff events.

    BLS will use designations from the Federal Emergency Management Agency (FEMA) in deciding which areas to include as a Katrina-damaged area.

    PUBLICATION

13. How will BLS issue statistics on plant closings and layoffs attributed either directly or indirectly to Hurricane Katrina?

14. Because of the need to assess the impacts of Katrina on the mass layoff data on a timely basis, two interim reports of quarterly extended mass layoff data from the States to BLS are planned. The first will include layoff events identified through October 15 and where there was subsequent contact with the employer. Information on these events will be issued by BLS in December with the publication of monthly MLS data for November. The second interim report will include layoff events identified through November 12 and where there was subsequent contact with the employer. This information will be issued by BLS in January with the publication of monthly MLS data for December.

    SEASONAL ADJUSTMENT

15. Will the MLS seasonal adjustment procedure be affected by Katrina?

16. Large, unexpected, rare events such as Hurricane Katrina can cause a time series to deviate from its expected patterns. Changes will be made to the MLS seasonal adjustment procedure through the use of intervention variables to keep the seasonal factors from becoming seriously distorted.

Last Modified Date: November 14, 2005