Washington, D.C. — In 2001, 1.7 million workers in the United States lost their jobs in what experts call mass extended layoff events. According to the Bureau of Labor Statistics, this is higher than in any other year on record. More than 486,000 of those layoffs, in over 2,500 events, occurred in the fourth quarter alone and resulted in the fifth consecutive quarter in which layoffs increased.

Mass extended layoff events involve 50 or more workers for more than 30 days. BLS senior economist Lewis Siegel said 37 percent of the worker layoffs in 2001 occurred in the manufacturing and industrial sectors, up from 33 percent in 2000.

"An increase of four percent may sound small, but it entails a lot of people," said Siegel. "Manufacturing layoffs involved 365,000 workers in 2000. It increased 69 percent to 615,000 in 2001."

The amount is larger than in any other sector of the economy, he said. These layoffs were concentrated in electrical and electronic equipment manufacturers, semiconductors, communications, and canned or frozen foods.

"The number of layoffs responds to the general economic tone," said Siegel. "There seems to be a pick-up in the economy and many indicators point to a short-lived recession. Hopefully the economy will respond and we will see recalls and rehiring, but that depends on how employers will react to a whole range of indicators."

Siegel said much of the U.S. manufacturing sector is tied to the automotive industry and the recovery of the manufacturing economy relies heavily on the health of that industry. Don't look for an immediate surge in recalls, however. Outside of seasonal labor, only 25 percent of employers expect to recall laid-off workers.

The figures released by the BLS for January 2002 also look bleak for manufacturing. Of more than 260,000 people affected by layoffs in January, 49 percent or 129,000 workers were in manufacturing. This is a 20 percent increase over figures compiled for January 2001. January also marked the first time since 1963 that manufacturing employed fewer than 17 million workers.

Siegel says there has been an ongoing trend of labor reduction in manufacturing over the past several years. At the same time, there have been continual increases in productivity. Department of Labor statistics show a 4.1 percent increase in productivity in the fourth quarter of 2001 and 1.1 percent for the year, even with a declining workforce.

"Manufacturing has decided that leaner and meaner is the way to go," Siegel said. "Technological advances have allowed them to do more with fewer employees and they are looking to cut fluff wherever possible. The adjusting process is difficult, however."