A growing number of displaced workers are getting jobs in the industries they left — a hallmark of a strengthening recovery.
Of the roughly 4 million non-farm workers laid off from jobs they held at least three years from 2011 to 2013, 62% were working again by January 2014, according to a survey of displaced workers by the Bureau of Labor Statistics released Tuesday.
Slightly more than half of those re-employed had jobs in their former industries, up from 47% in January 2012 and 44% in January 2010.
REPORT: Displaced workers 2011-2013
The finding is significant because an unusually large number of Americans who lost jobs during and after the Great Recession of 2007-2009 had to leave their fields, especially construction and manufacturing workers. Each of those industries lost about 2 million jobs in the downturn.
Many displaced workers were retrained for other sectors at significant cost, often to the federal government, and had to take positions that paid far less than they earned previously.
By January, however, 62% of re-employed construction workers had been rehired in the industry as the housing market began to recover, up from 52% two years earlier.
“It would make sense that firms would go for the most seasoned employees first,” says Brian Turmail, a spokesman for Associated General Contractors, a trade group.
Similarly, 55% of displaced leisure and hospitality workers stayed in the industry, up from 49% two years ago. And 52% of transportation and utilities workers, a category that includes truck drivers, were rehired in their fields, compared with 39%.
As more displaced workers landed new jobs in their industries, a growing portion were also able to avoid sharp drops in wages. Slightly more than half of re-employed full-time workers earned as much or more than they did at their previous jobs, up from 46% two years ago. The share losing at least 20% in earnings fell to 27% from about a third.
The 62% of displaced workers who landed new jobs by January — whether inside or outside their former industries — represents an increase from the 56% rehired two years earlier and 49% four years ago. About 70% of education and leisure hospitality workers were re-employed, followed by about 68% in construction, 61% in finance, 59% in manufacturing and 58% in the wholesale and retail trade.
Still, although total U.S. payrolls grew 5% from 2011 to 2013, the share of displaced workers finding jobs has lagged other recoveries, says BLS economist James Borbely. After the 2001 recession, 70% of workers displaced from 2003 to 2005 were re-employed by early 2006, even though total employment increased by only 3%.
The shortfall is heavily tied to the persistently large number of long-term unemployed Americans who have struggled to find jobs. “We haven’t gotten to a full recovery,” Borbely says.