Labor Market Information for Economic Development.

Labor Market Information for Economic Development

Session Goals Introduce you to Labor Market Information (LMI) Build foundational knowledge of LMI Demonstrate a variety of LMI resources Allow you to familiarize yourself with LMI tools

What is Labor Market Information (LMI)? Data that describe and predict the relationship between labor supply and demand LMI provides data on a variety of subjects: Population and labor force trends Industry and occupational employment trends and projections Wage and benefit information Career information relating to skills and education Data are often available at different geographic levels e.g., State, county, metro area, workforce development region, etc.

Who uses LMI? Businesses and Entrepreneurs Jobseekers and Students Individual Actors Economic and Workforce Dev. Service Providers Education and Training Providers Researchers and Grant Writers Federal, State, & Local Governments Policymakers & Planners Media Commercial Data Vendors Value-added Disseminators 4

How can LMI help me as an Economic Developer? Better understand my regions economy, and the economy of competitor regions Identify potential opportunities for future development Understand my available workforce and what companies are paying for labor Enhance grant proposals Prioritize strategic goals

Our Agenda for the day Who is my regions workforce? Population and labor force data Where are my regions jobs? Industry data Using Local Employment Dynamics (LED) data Does my region have any unique competitive advantages? Calculating location quotients What do my workers do? Occupational data Pulling it all together

Who is my regions workforce?

In this section, we will: Introduce you to several sources of demographic data US Census Bureau Alabama State Data Center Identify sources of key labor force data available through Alabama LMI Labor force data Unemployment data

Common questions Is my region growing or declining and how will this affect my economy? Is my population aging? Will I have enough workers to meet my workforce needs? How many people are looking for work or are available to work?

The Feds Decennial Census www.2010.census.gov www.2010.census.gov Population Estimates & Projections Annual Estimates www.census.gov/popest/estimates.html www.census.gov/popest/estimates.html American Community Survey Annual Estimates www.census.gov/acs/www/www.census.gov/acs/www/

US Census Bureau Resources Getting Census Data for your community Interactive maps for the 2010 Census http://2010.census.gov/2010census/popmap/ http://2010.census.gov/2010census/popmap/ Alabama Quickfacts http://quickfacts.census.gov/qfd/states/01000.html http://quickfacts.census.gov/qfd/states/01000.html http://quickfacts.census.gov/qfd/states/01000lk.html http://quickfacts.census.gov/qfd/states/01000lk.html

Population Estimates Program (Annually) Annual estimate of resident population Reference date is July 1 each year Characteristics Included: Age Sex Race Hispanic origin www.census.gov/popest/estimates.html www.census.gov/popest/estimates.html

American Community Survey (Annually) Essentially the same questions as the old Census long form 21 questions about housing unit 48 questions about each person Conducted throughout the year 2.9 million addresses/about 4.5 million persons Roughly 1.5% of the population each year Collected via mail, phone, & in-person www.census.gov/acs/www www.census.gov/acs/www

American Community Survey (Annually) ACS Data grouped in 4 Types of Characteristics Demographic: sex, age, race Hispanic origin, etc. Social: Educational attainment, marital status, citizenship, language, etc. Economic: Employment, occupation, industry, commute, household income, poverty, etc. Housing: Type of unit, own/rent, age of structure, housing value, etc.

2010 ACS Data Releases Product Population Threshold Most recently published 1-Year Estimates65,000+Sept. 2011 3-Year Estimates20,000+Oct. 2011 5-Year Estimates Less than 20,000 Dec. 2011 1-Year, 3-Year and 5-Year Public Use Microdata Sample (PUMS) 100,000+ 1-2 months after release

The Alabama State Data Center The Alabama State Data Center is staffed through UAs Center for Business and Economic Research Source of technical assistance Provide help with census, especially small area estimates http://cber.cba.ua.edu/asdc http://cber.cba.ua.edu/asdc

Using these sources, find the following information for your county Exercise A Exercise B (If you were here yesterday) What was your countys population in 2000 and 2010? How many people in your county were aged 65 and older? What % of your population are 65+? What % of your countys population (aged 25+) have at least a Bachelors Degree? How does this compare to Alabama overall? What % of your countys population in 2010 were born outside of the U.S.? How does this compare to Alabama overall? What % of your countys population (age 16+) that were employed in 2010 were self-employed? How does this compare to Alabama overall? In 2010, what % of your countys workers (16+) who did not work at home travel 30 min. or more to work?

How big is my labor force? The labor force includes: People aged 16 and older who are either in the labor force or actively seeking work The labor force does not include: People in the armed forces, retirees, stay-at-home parents, prisoners, discouraged workers, mentally ill, etc.

How big is my labor force? The labor force participation rate is the number of people aged 16 and above participating in the labor force Around 64 percent for the US; 60 percent for Alabama Data based on Current Population Survey (CPS) The CPS is a joint program of the US Bureau of Labor Statistics and the US Census Bureau http://www.bls.gov/cps/

Who is considered employed? Employed persons are those who, during the week of the 12 th each month: Worked at least one hour for pay or profit, or Were self-employed, or Worked at least 15 hours without pay on a family farm or business Had jobs but were temporarily absent

Who is considered unemployed? The unemployed are persons who, during the reference week of the 12 th each month: Were not employed, Were available for work during the week, and Actively looked for work within the last 4 weeks Also included as unemployed are persons who were waiting to be called back to a job from which they had been laid off Note: CPS does not ask about or use unemployment insurance data.

Getting labor force and unemployment data for your county/region The unemployment rate is the percent of people without jobs in the labor force Provides an indication of the health of your economy Offers an estimate of the number of people actively seeking work Unemployment data available through Alabama LMI and US BLS Local Area Unemployment Statistics (LAUS) program. LAUS is the only official statistic based on an estimating model, and not a census or survey http://www2.dir.state.al.us/LAUS/default.aspx http://www2.dir.state.al.us/LAUS/default.aspx http://www.bls.gov/lau/ http://www.bls.gov/lau/

Unemployment data available through Alabama LMI

Unemployment in the US, AL and Huntsville MSA Source: US BLS LAUS

Unemployment Exercise Exercise A Exercise B (If you were here yesterday) Using the Alabama LMI website: What was your countys unemployment rate in March 2012? How many people were considered unemployed? Using the BLS website: What was your countys highest unemployment rate over the past 5 years? Hint: use http://www.bls.gov/lau/http://www.bls.gov/lau/ Using the BLS website For your closest MSA, look at the monthly unemployment patterns How did the number change? How did the rate change? Besides the recession, do you see any seasonal patterns? How did that MSA compare to the state?

Questions?

Where are my regions jobs?

In this section, we will: Explain why you should track industry employment. Introduce you to the North American Industry Classification System (NAICS) Show you how to access simple industry data, more detailed industry data and where can get industry forecasts Show how you can compare you county/region to other places.

We need industry data to answer several relevant questions Is my economy healthy? How is my economy structured? How did the recession affect my economy? What industries are responsible for creating jobs or new start-ups? Does my region have any unique competitive strengths?

Basic Economic Model Export or base activity (new $s) Non-basic activity (recycled $s) Examples: Manufacturing Tourism Some hospitals Regional shopping malls Social Security income Examples: Auto repair services Small convenience retail Outpatient medical Personal services like barber shops Print and copy shops

Definitions Basic Industry - Those industries that produce goods and services ultimately sold to consumers outside the region. Non-basic Industry - Those industries that produce goods and services that are consumed locally.

Basic/Non-basic Theory A regions export industries are its economic foundation Other industries thrive by servicing the export industries and one another. A change in the basic sector will lead automatically to a change in the same direction in the non-basic sector. Large manufacturing plants may attract a Walmart A Walmart will not attract a large manufacturing plant The ratio of non-basic to basic activity is reasonably stable over the long term.

Accessing industry data: The North American Industry Classification System (NAICS) Replaced the Standard Industrial Classification (SIC) codes Production-based: Economic units that use like processes to produce goods or services are grouped together Industries are classified according to what companies make Jointly developed across North America

Economic Sectors in the North American Industry Classification System (NAICS)

NAICS levelExample #1Example #2 NAICS codeDescriptionNAICS codeDescription Sector31-33Manufacturing51Information Subsector311Food Manufacturing513Broadcasting and telecommunications Industry group 3115Dairy Product Manufacturing 5133Telecommunications Industry31151Dairy Product (except Frozen) Manufacturing 51332Wireless telecommunications carriers, except satellite U.S. Industry311513 Cheese Manufacturing 513321Paging Unique to country; standardization ends at 5-digit code. North American Industry Classification System (NAICS)

Benefits of NAICS Relevance identifies hundreds of new, emerging, and advanced technology industries; more meaningful sectors--especially in the service-producing segments International Comparability provides for comparable statistics among the three NAFTA trading partners. Consistency consistent principle: businesses that use similar production processes are grouped together. Adaptability reviewed every 5 years, to keep up with our changing economy. www.census.gov/epcd/www/naicsben.htm

Quarterly Census of Employment and Wages (QCEW) QCEW are considered universe, not sample data Covers all employers subject to state Unemployment Insurance (UI) laws, as well as Federal employees Covers 98% of all nonfarm wage and salary workers and 45% of agricultural workers QCEW produces detailed geographic data on employment and wages. Cornerstone of most BLS programs

Accessing Alabama LMI

Exercise: NAICS data Look at the industry data handout, and consider: What industries are the biggest source of jobs? What industries might be the best source of new jobs? How would you describe the economy of this region? How has it performed relative to the state? What region do you think this is?

Finding employment data quickly on the BLS website http://beta.bls.gov/maps/cew/us

Get State Data: State LMI Directory www.lmiontheweb.org www.lmiontheweb.org

The Bureau of Labor Statistics Website http://bls.gov/cew

QCEW Exercise Use the BLS Website (www.bls.gov/cew)www.bls.gov/cew Select two three digit NAICS industries that you know are present in your county Complete listing of NAICS here: http://www.census.gov/naics/2007/NAICOD07.HTM http://www.census.gov/naics/2007/NAICOD07.HTM What was the most recent employment in those industries?

Why might you have encountered suppressed data? Data are suppressed when: Fewer than 3 establishments in a given industry in a given area One firm constitutes more than 80 percent of industry employment in a given area http://www.incontext.indiana. edu/2008/july-august/2.asp http://www.incontext.indiana. edu/2008/july-august/2.asp

Industry Projections Industry projections provide an indication of the direction and scale of industry growth trends They combine past performance with national and regional trends The further out they go, the less reliable they become They offer an educated guess as to future growth, but remember no one has a crystal ball They can be used as an input for thinking about economic development targets or future workforce needs Projections for the State and Workforce regions are available through Alabama LMI at: http://www2.dir.state.al.us/Projections/Default.aspx http://www2.dir.state.al.us/Projections/Default.aspx 2010 to 2020 projections will be released this summer

Industry projections from Alabama LMI

Projections Exercise In your region, what 2-digit NAICS sector is projected to add the most employment between 2008 and 2018? Is this sector projected to gain employment at a faster rate than the US? What did the projections say about the 3-digit NAICS industries you looked up in the previous exercise? How do the trends in these industries compare to these industries nationwide?

Other resources: Stats America: http://statsamerica.org/http://statsamerica.org/ Census County Business Patterns: http://www.census.gov/econ/cbp/ http://www.census.gov/econ/cbp/

Take 10 minutes to explore StatsAmerica and/or County Business Patterns Stats America County Business Patterns What percent of your employment is in manufacturing? Health care? Where did your county rank within the state? What was the average annual wage for construction jobs in your county? Where did your county rank within the state? Try comparing yourself to several other places How many manufacturing establishments are in your county? How many have 100 or more workers? What sector had the most establishments with fewer than 5 employees? What was the annual payroll in your county?

Questions?

Local employment dynamics

In this section, we will: Introduce you to the Local Employment Dynamics (LED) Program Demonstrate the LEDs Online Tools Quarterly Workforce Indicators Online OnTheMap

Local Employment Dynamics Partnership between state LMI agencies and the Census Bureau Uses existing data Wage records Demographic information Supplies statistics on employment, job creation, turnover, and earnings by industry, age, and sex 53

Matching Process Source: Tom Tveidt, Syneva Economics, Inc 54

LEDs Online Tools Quarterly Workforce Indicators (QWI) Online Accesses 8 QWI covering employment, new hires, job creation and destruction, and earnings. 2001-2011 Quarterly update OnTheMap Maps and reports on workers and jobs covering 49 states, five years of data, cross-state flows, and selectable geographic layers 2002-2010 Annual update Industry Focus Tool that reports the top industries for area, age, gender, race/ethnicity and educational attainment Average quarterly employment for 4 most recent quarters 55

Using LED in your research

Go to: http://lehd.did.census.gov/led/datatools/qwiapp.html http://lehd.did.census.gov/led/datatools/qwiapp.html

Quarterly Workforce Indicators (QWI Online) Exercise http://lehd.did.census.gov/led/datatools/qwiapp.html http://lehd.did.census.gov/led/datatools/qwiapp.html Try to answer questions like, what percent of my workforce: Are women? Are age 55 and older? Have at least a Bachelors degree? Are African-American or Hispanic? 58

OnTheMap Maps where workers are employed and where they live Basic analysis already done by the state http://www2.dir.state.al.us/workforcedev/Commuting%20Patter ns%20Pres/Default.aspx Provides companion reports with QWI data Area Profile Analysis Area Comparison Analysis Distance/Direction Analysis Destination Analysis Inflow/Outflow Analysis http://lehdmap.did.census.gov/ http://lehdmap.did.census.gov/

Primary Jobs in Mobile, AL

Where Workers of Mobile, AL Live 157,633 primary jobs in Mobile County, AL (2010) 52.6 percent of workers in Mobile County live within 10 miles of their job Important Caveat It is important to dig into the data and apply local knowledge since there can be anomalies i.e. an employer, such as a grocery chain, filing wage records from one location for stores in multiple locations

OnTheMap can be exported to Google Earth

In 2010, what percent of the workers in your region drive less than 10 miles to work? How has this changed since 2005? In 2010, what percent of the regions workers both live and work in the region? How has this changed since 2005? 63 http://onthemap.ces.census.gov/ OnTheMap Exercise

QWI versus OTM Quarterly Workforce Indicators (QWI) OnTheMap (OTM) Variables (categories) Age (8) Sex (2) Education (4) Race (6) Ethnicity (2) Industry (4 digit) Economic Indicators Employment, Net Job Flows Job Creation, New Hires, Separations, Job Turnover, Earnings Age (3) Education (4) Race (6) Ethnicity (2) Ownership (2) Industry (2 digit) Economic Indicators - Total Employment & Earnings (3) Geographic DetailCounty MSA WIA Area Census Block Residence/Work User defined areas UpdatesQuarterlyAnnual

Strengths and Weaknesses of LED Strengths Detailed geography and industry Rich micro data for research High frequency 9 months after transaction date Limitations No national statistics Working toward national stats

Questions?

Do I have any unique competitive advantages?

In this section, we will: Introduce to you the basic concepts of Location Quotients

Location Quotients (LQs) are a regularly used method for regional analysis LQs measure the relative concentration of a given industry in a given place. Often relative to the nation, but can also calculate state LQs Calculated by dividing the proportion of the regions economic activity in an industry, by the proportion of the nations economic activity in that same industry. Industry employment is the most commonly used variable, but could also generate LQs from other variables. E.g., occupational employment, industrial output, revenue, etc.

Location Quotients Total Industry Region Nation Formula Interpretation Source: J. Paytas

Interpreting LQs Can use location quotient to get a sense of the specialization of regional industries General rules of thumb LQs of 1.2 or higher indicates some degree of specialization LQs of 0.8 to 1.2 indicate normal distribution of industry within the region LQs of less than 0.8 may indicate that the region may be deficient Depends on size of region, nature of industry Smaller regions may have larger LQs Not industries are appropriate for all places If all location quotients near or at 1.0, will see the region resembling the national economy Region may be sufficiently diversified

Thinking about LQs Sensitive to the size of the region and base Sensitive to the level of industry IndustryAlabamaMadison County, AL (Huntsville) NAICS 31-33 Manufacturing 1.511.42 NAICS 336 Transportation Equipment MFG 2.533.93 NAICS 3364 Aerospace Product and Parts MFG 2.127.12

Location Quotient Calculators

Location Quotients Exercise Use the BLS Location Quotient Calculator for your county: http://data.bls.gov/location_quotient/ControllerServlet http://data.bls.gov/location_quotient/ControllerServlet Find the LQs for your county at the Sub-sector level (3-digit NAICS) Which sub-sectors were most concentrated in your county? What was the LQs for the 3 largest sub-sectors?

Questions?

What do my workers do?

In this section, we will: Introduce you to the Standard Occupational Classification System (SOC). Show you how to access data on occupational employment and wage and projected future employment. Occupational Employment Statistics (OES) Occupational Projections

Common questions What types of occupations/jobs are in my region and what do those jobs pay? What education and training is required for those occupations/jobs? What types of occupations are projected to be in demand in my region in the future?

Workers Occupations The Standard Occupational Classification (SOC) is a system designed to: Classify all occupations in the economy, including private, public, and military occupations Provide a means to compare occupational data across government agencies Revised periodically: 2010 revision Net new job count is 19; 2 of them green www.bls.gov/soc/soc_structure_2010.pdf www.bls.gov/soc/soc_structure_2010.pdf Contains information on 840 detailed occupations

Standard Occupational Classification (SOC) Structure Broad categories lead to unique 6-digit codes for each occupation: 22 Major groups ; divided into... 49-0000 Installation, Maintenance, and Repair 98 Minor groups; divided into... 49-9000 Other Installation, Maintenance, and Repair 450 Broad occupations; divided into... 49-9080 Wind Turbine Service Technicians 800+ Detailed occupations 49-9081 Wind Turbine Service Technicians

Occupational Employment and Wage Estimates Occupational Employment Statistics (OES) OES collects detailed occupational and wage information by industry and area Semi-annual establishment survey 1.2 million establishments over 3 years Nonfarm, Ag Services & Governments All 50 states Data are published annually May 2011 most recent

What Estimates Are Included? Occupational Employment Occupational Wages (Hourly and/or Annual) Mean Average wage Median - The point at which 50% of the employment was below this wage and 50% was above Entry The average of the lowest third of reported wages for the occupation Experience The average of the upper two-thirds of reported wages for the occupation *** BLS also produces 10th, 25th, 75th & 90th wage rate percentile estimates

Sample OES Data for Alabama The average wage The average wage of the lower two-thirds The average wage of the upper two-thirds

Alabama OES Estimates Geography Statewide Metros 11 MSAs Balance of State Areas Counties not in a MSA Industries Cross-industry 2-digit NAICS www2.dir.state.al.us/OES/Wage/default.aspx www2.dir.state.al.us/OES/Wage/default.aspx *** Wage data is aged to current year using the latest quarterly Employment Cost Index (ECI) factors

Geography and Industries of National OES Estimates Geography Nationwide State, MSA & Nonmetro Areas www.bls.gov/oes/home.htm www.bls.gov/oes/home.htm Cross-industry Example of Cross Industry: All Machinists (51-4041) www.bls.gov/oes/current/oes514041.htm www.bls.gov/oes/current/oes514041.htm By 3-, 4- and 5-digit NAICS 4-digit NAICS Example: Machinists working in the Motor Vehicle Parts Manufacturing Industry www.bls.gov/oes/current/naics4_336300.htm

Occupational Projections Occupational Projections released every two years BLS develops national projections Cross-industry and Industry-specific 2010-20 most current release www.bls.gov/emp/ www.bls.gov/emp/ States develop state projections Cross-industry 2008-18 most current release 2010-20 projects should be out in July www2.dir.state.al.us/Projections/default.aspx www2.dir.state.al.us/Projections/default.aspx

Occupational Projection Estimates Employment Base year & 10 years forward Average Annual Growth annual % change in employment Average Annual Job Openings Total Openings - Numeric change in employment Growth Newly created jobs Replacement Number of jobs that will arise due to workers who change occupations, retire, etc. **Employment may not be sufficient in an occupation to allow the development of projections or the data may be confidential

Example of Occupational Projections Openings due to newly created jobs Openings projected due to workers leaving the occupation

Education and Training Required for Occupations BLS assigns three categories of information to each detailed occupation: 1. Typical education needed for entry 2. Commonly required work experience in a related occupation 3. Typical on-the-job training needed to obtain competency in the occupation *** This classification system is new with the 2010-20 projections

Typical Education Needed for Entry 1. Less Than High School janitors and cleaners or cashiers 2. High School Diploma or Equivalent food service manager or pharmacy technicians 3. Some College, No Degree transportation inspectors or computer support specialists 4. Postsecondary Non-Degree Award (certificate or other award) nursing aides, emergency medical technicians (EMTs) and paramedics or hairstylists 5. Bachelors Degree dietitian or civil engineers 6. Associates Degree mechanical drafters, respiratory therapists or dental hygienists 7. Masters Degree physician assistants or educational, vocational, and school counselors 8. Doctoral or Professional degree Lawyers, physicians and surgeons or dentists

Commonly Required Work Experience A. No experience Nuclear engineer or dishwasher B. Less than 1 year of experience Meeting, convention and event planners or restaurant cooks C. 1 to 5 years of experience Human resources managers or locomotive engineers D. More than 5 years of experience Computer and information systems managers or financial managers

Typical On-The-Job Training Needed to Attain Competency 1. None Geographers or pharmacists 2. Short-Term OTJ Floral designers or sewing machine operators 3. Moderate-Term OTJ School bus drivers or printing press operators 4. Long-Term OTJ Millwrights or tool and die makers 5. Apprenticeships Electricians or real estate appraisers 6. Internship/residency Landscape architects or orthodontist

Occupations Projected With the Fastest Growth

OES Exercise 1. On the LMI website, look up what occupation in your region (Balance of State or MSA) for the manufacturing sector had the highest estimated employment. A. What is its SOC Code? B. What is its Mean Hourly and Annual Wage? http://www2.dir.state.al.us/OES/Wage/default.aspx 2. On the BLS website, look up that occupation/SOC Code for the manufacturing sector A. How does its Mean Hourly and Annual Wage compare to the region? http://www.bls.gov/oes/current/naics2_31-33.htm

Questions?

Pulling this all together

Pulling it together Goal is to tell a story Grant proposals Data reports Marketing materials Everyone is entitled to his own opinion, but not his own facts. ---D.P. Moynihan Develop an agreed upon set of facts/issues from which to make decisions Labor Force Size and Change in Unifour Annual Growth Rate of the Furniture Industry (2002- 2011) Annual New and Replacement Jobs for Key Furniture Occupations

Data Analysis and Research in the Planning Process Lead Execute PrioritizeAnalyze

Consider using multiple data sources Short TermLong Term Secondary Data Primary Data Direct Business Input Industry Surveys Real Time Labor Market Information Economic, Workforce and Education Data

Final thought The make a friend strategy---Dont be afraid to pick up the phone Alabama LMI Alabama State Data Center US Census Bureau, US Bureau of Labor Statistics All these agencies employ real people who are willing and able to help you Bonus final thought: Always source and date your data!

Thank you! Mark C. White [email protected] [email protected] Drew Conrad [email protected] [email protected]

Labor Market Information for Economic Development.

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