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Copyright 1998 by the Wyoming Department of Employment, Research & Planning


Understanding the Different Employment Measures

by: Mike Evans

We receive many requests for clarification on the various employment numbers available to the public and the differences between them. The major differences are the collection methods, what data are collected and how the data are used (see the Table). Various tools are necessary to accurately describe the labor market, thus the various employment counts.

There are two major methods used to collect employment data. The first is employer information on the number of jobs that they had during a certain period. Three programs collect data from the employer: Current Employment Statistics (CES), Employment Services (ES-202) Covered Employment & Wages, and the Bureau of Economic Analysis (BEA). The first two programs exist in Research & Planning (R&P) under the Bureau of Labor Statistics (BLS) contract while the BEA comes from the ES-202 program and Internal Revenue Service (IRS) data as a starting point or benchmark to make estimates on the number of jobs worked. The second collection method comes from individuals in the Local Area Unemployment Statistics (LAUS) and the Wage Record programs.

Total Nonagricultural Wage & Salary Employment

Let’s discuss the CES program, also known as Wyoming Nonagricultural Wage & Salary Employment, and the difference between nonagricultural employment and the other employment measures. Employment estimates are released monthly (see "Wyoming Nonagricultural Wage and Salary Employment"), by industry, with only a one month lag. A monthly survey derives these data from around 3,000 employers representing workers covered under Unemployment Insurance (UI), although we include certain non-covered jobs in the CES estimates (i.e., railroads, interns & trainees at hospitals, work-study students, elected officials, and employees of nonprofit organizations). These data are the most timely available information for the Wyoming labor market and are a good proxy or indicator of Wyoming state sales tax and Gross State Product (GSP) (please refer to "Work, Pay and Consumer Spending: Parts I and II" in the May and June 1997 issues of Wyoming Labor Force Trends). Therefore, when the employment numbers show slight increases in the number of jobs over the year, one can expect payroll and GSP to increase slightly.

Another important point concerning the CES numbers is that they do not include any employment information on agriculture or sole proprietors. County data is only generated for Natrona and Laramie Counties. CES includes approximately 85 to 90 percent of all employment, or more accurately the number of jobs in the state. This is an important distinction between the employer-collected information and individual-collected information. The number of jobs in the state could be increasing slightly, as in 1997, but the number of people from Wyoming employed might be decreasing, as in 1997 LAUS numbers (see "1997 Wyoming Nonagricultural Wage and Salary Employment" and "1995 - 1997 Wyoming Local Area Unemployment Statistics"). This can occur because more Wyoming residents are holding multiple jobs and/or individuals from out of state are working in Wyoming temporarily (e.g., tourist jobs in Yellowstone, pipeline and road construction, etc).

Local Area Unemployment and Employment Statistics

Local Area Unemployment Statistics (LAUS) employment numbers are produced at the state and county levels and are collected by place of residence of an individual, not by industry of the individual’s employer. This includes all Wyoming employed residents (i.e., UI covered, self-employed, unpaid family workers, domestic workers, and agriculture). We have not counted multiple jobs. Numbers are published monthly in Trends (see "Civilian Labor Force and Unemployment") showing total labor force and unemployed persons. To calculate the total employment levels for Wyoming residents, take the difference between the total labor force and unemployed labor force (please refer to "The LAUS Benchmark: What Does it Tell Us?" in the March 1998 issue of Trends). This information uses the Current Population Survey (CPS) conducted by the U.S. Census Bureau to estimate the number of sole proprietors and agriculture workers and the CES data; it results in the most thorough and accurate count of Wyoming workers.

Annual Covered Employment and Wages

The Employment Services (ES-202) Covered Employment and Wages, is similar to the CES program in that it includes employment for those employers covered by UI, although these numbers are not estimates but actual data reported to UI for tax purposes. Also, certain employers in agriculture production, forestry, and fisheries under UI are covered. These data are collected from the employer for each individual that works for that particular firm, thus counting full and part time workers who might hold multiple jobs. Also, employment is available monthly, quarterly, and yearly with a five-month lag by industry and county. For 1996, 88 percent of all jobs worked or employment was covered under UI and included in Annual Covered Employment and Wages.

There are times when the number of jobs (i.e., ES-202 or CES) in a county or state could be larger than the number of individuals willing, able and seeking work--or even the number of people that actually live--in that state or county. This commonly occurs when the labor supply is not large enough in an area and labor must be imported from out of state or out of the county.

For example, Teton County had LAUS employment of 10,395 and a total labor force of 10,693 in 1996 (see "1995 - 1997 Wyoming Local Area Unemployment Statistics") which is much less than the covered employment or number of jobs worked in the county (13,658 for 1996). Remember this is only for workers covered under UI; the actual number of jobs worked is much higher when one includes self-employed and agricultural jobs (BEA data for 1995 shows 18,591 jobs in Teton County; data are not yet available for 1996).

Approximately ten percent of Wyoming workers hold multiple jobs, using this rule of thumb for Teton County means a total of 11,435 jobs in Teton County are held by residents. This means Teton County must import 3,000 to 7,000 individuals, depending on the time of year, from neighboring counties or states to meet employer demands for labor. The excess demand for labor and labor shortage shows up with an increase in real wages and the cost of living, where the unemployment rate falls below the natural rate of unemployment (please refer to the "Labor Surplus & Shortage" section for an explanation of the natural rate of unemployment).

Total Job Count

BEA uses the CES and ES-202 data, and counts self-employed and agriculture jobs not covered under UI, so it counts all jobs worked within the state by industry. IRS data supplement BEA data. The major problems with BEA employment data are the time lags of more than a year due to processing the IRS data and benchmarking to the ES-202 data. The main purpose of IRS is tax collection--not to provide information on state and national economies--but the IRS data serves as a good benchmark for the total number of jobs worked. State level data are available after a year but there is a two-year lag in county data. Often, employment and income data from BEA are revised three years prior. BEA data are more comprehensive for total job count and total income earnings (i.e., including dividends from stocks & bonds, wages from UI covered employment, rental income, etc.). In other words, multiple job holdings by a single worker count as multiple units of employment, therefore, the BEA job count numbers will run higher than any other program's numbers (see Figure).

Wage Record Employment

One final program not yet mentioned is the employment from Wage Record files (please refer to "The Wyoming Wage Record Classification System" in the March 1998 issue of Trends). Wage Records are the future of labor market information because they come from data provided by the employer and are a list of all the individuals that worked for that particular employer, along with their wages. In a sense, it is a cross of ES-202 (employer-specific data) and LAUS (individual-specific data), organized by social security number (SSN). Wage Record data are available quarterly and yearly with a three-month lag.

Conclusion

There are various tools to describe the labor market with two major methods used to collect employment data. Employer information gives the number of jobs that individuals work during a certain period, while the second collection method comes from individuals and their place of residence. Using various methods gives one the ability to identify labor surplus and shortage areas by geographic location, industry and occupation with wage records showing the most promise for future research on the labor market.


Mike Evans is a Senior Economist, supervising Bureau of Labor Statistics (BLS) programs with Research & Planning.


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