Layoffs and closures often hit high-seniority workers hardest | National Union of Public and General Employees

Layoffs and closures often hit high-seniority workers hardest

New study by Statistics Canada looks at impact of job losses in the 1990s


Ottawa (18 Jan. 2007) - When companies close or announce major layoffs, the financial impact on employees often lasts for years and hits high seniority workers the hardest, suggests a new study by Statistics Canada.

"High-seniority employees who lost their job during the 1990s as a result of firm closures and mass layoffs suffered substantial losses in earnings," the agency reports.

For workers in general, the losses experienced five years after displacement caused by closure or mass layoffs "represented at least 9% of their pre-displacement earnings," the study found.

However, losses for workers with substantial seniority were more pronounced.

"Five years after they lost a job, male workers who had at least five years of seniority and found another job experienced losses that represented between 18% and 28% of the earnings they received before their job loss. For their female counterparts, the losses ranged between 24% and 26% of their pre-displacement earnings," the agency says.

"In 2000 dollars, the average loss in earnings for high-seniority males five years after losing their job varied between $7,100 and $10,900. The corresponding range for women was between $5,500 and $6,100."

The study examined the earnings of displaced workers 25 to 49 in the private sector between 1988 and 1997. NUPGE

More information:
Statistics Canada: Earnings losses of displaced workers