If it feels like Arkansas has been witnessing more big layoff announcements this summer, there’s a good reason for it. We have.
Several months ago, we reported on the phenomenon known as mass layoffs, a statistic tracked by state and federal workforce officials. Technically, a mass layoff involves a business that has at least 50 initial claims for unemployment insurance (UI) filed against it during a 5-week period.
The point of tracking mass layoff events is to gauge major hits to the economy from layoffs involving large employers that could cause ripple effects in state commerce. Not only are singular companies and their workers affected by the big job cuts or closures, but suppliers and vendors can be similarly impacted.
Earlier this year, we noted that these events were on the decline in the first quarter of 2011, putting Arkansas on pace to have an unusually low year for mass layoffs compared to the 2008-2010 period.
In recent months, however, those statistics have skewed significantly in a negative direction, according to the U.S. Bureau of Labor Statistics (BLS). After the first four months of the year saw a total of 12 mass layoff events in Arkansas, May through July recorded 61 mass layoff events.
Month (Number of Mass Layoffs)
May 2011 (15)
June 2011 (29)
Some of these events were high-profile, such as the closure of Yarnell’s Ice Cream Co. in Searcy. Currently, the data for these layoffs on the BLS web site do not identify how many actual workers have been affected.
Interestingly, the 61 mass layoff events between May and July this year rank as the worst summer in ten years of these BLS statistics. The worst comparable 3-month period was in May through July 2009 when 37 mass layoff events occurred.
The worst 3-month stretch of any period in the last decade was October through December 2008 — the tipping point of the recession — when 64 mass layoff events amassed. As you can deduce, this summer’s 61 is not far from that recession high.
When added with the 12 mass layoff events earlier this year, Arkansas has now seen a total of 73 mass layoffs from January to July 2011, putting the state on pace to have as many as 125 mass layoff events if the averages hold.
That would outpace the two worst recession years of mass layoffs in the last decade which are 2008 (when 116 events occurred) and 2009 (when 117 events occurred). The 2011 year-to-date total of 73 already surpasses last year’s total mass layoff events, which finished at 71. The decade low was in 2006 when 40 mass layoffs occurred.
Arkansas’ sister states offer interesting comparisons, which we’ll explore on Thursday. Texas, Louisiana and Mississippi have also had a rough summer, while comparatively, Oklahoma, Missouri and Tennessee have not witnessed a big spike in these mass layoff events.
These numbers certainly serve as evidence that the battered economy has a long way to go to recovery. They also support the underlying feeling of fragile business and consumer confidence as well as fears that a double-dip recession could materialize.
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