The number of mass layoffs in Indiana has shrunk so far in 2019 to fewer than a fifth of what it was at the same point last year.
During the first two months of 2019, Indiana companies have announced four mass layoffs through Workers Adjustment and Retraining Notification Act, or WARN, notices to the state, down from 15 at the same point in 2018 and 10 at the same point in 2017, according to the Indiana Department of Workforce Development.
The federal WARN Act requires 60-day advance notification of a plant closing or a mass layoff, which includes the layoff of at least one-third of the workforce at a business with 50 to 499 employees, or the layoff of 500 or more employees at larger businesses.
A total of 432 workers in Indiana have lost their jobs in mass layoffs so far in 2019, according to the DWD. That’s down from 2,626 workers laid off in the first two months of 2018, 3,082 laid off in the first two months of 2017, 1,104 in the first two months of 2016, 1,523 in the first two months of 2015, and 700 in the first two months 2014.
January and February are common times for mass layoffs as companies often try to cut costs if they’re struggling while entering a new fiscal year. The layoffs have mounted in recent years during the retail apocalypse, as brick-and-mortar retail has faltered, with Carson’s, Walmart, Sam’s Club and Kmart all announcing mass layoffs in Indiana last year.
“The low numbers so far in 2019 are really a combination of two things: large, high-profile closings at the start of 2017 and 2018 that artificially inflated layoff numbers, and the U.S. still being in the honeymoon period of the tariffs and trade war, which has stabilized manufacturing employment for now,” Indiana University Northwest Assistant Professor of Economics Micah Pollak said.
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“In January/February of 2018, Sony, DHL, Bon Ton, Walmart, Sam’s Club and K-Mart all had significant layoffs," Pollak said. "In January/February of 2017, St. Joseph’s College, Corizon and United Technologies Electronic Controls all contributed to layoffs. So in 2018 and 2017 layoffs were higher than usual. This year we really didn’t have as many or as large cases as those."
Heavy industry also hasn’t been seeing as many layoffs because of tariffs designed to protect American jobs, such as the Section 232 tariffs of 25 percent on all foreign-made steel. There’s been a grace period in which U.S. manufacturers in select industries have benefited before long-term ill effects of trade wars have taken hold, Pollak said.
“Enough time has elapsed for demand for domestic steel and the price of domestic steel to rise, which has resulted in rising profits, which has provided some breathing for the steel industry,” Pollak said. “Fewer layoffs and higher wages through the recent union contract negotiations are evidence of this. This also applies to a lesser extent to other manufacturing-based industries as well.”
But other manufacturers and sectors may suffer in the future because of higher prices.
“It also hasn’t been long enough since the tariffs were put in place for the effects of the increased price of inputs to be fully felt along supply chains,” Pollak said. “Ultimately the higher price of steel and other inputs will ripple through the supply chain for other products, increasing the cost of production and narrowing profit margins. This may result in an increase in layoffs in the future.”