Labor Market Information for Economic Development

1. Labor Market Information for Economic Development

2. 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

3. 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.

4. Who uses LMI?

5. How can LMI help me as an Economic Developer? • Better understand my region’s 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

6. Our Agenda for the day • Who is my region’s workforce? • Population and labor force data • Where are my region’s 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

7. Who is my region’s workforce?

8. 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

9. 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?

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

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

12. 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

13. 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

14. 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.

15. 2010 ACS Data Releases

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

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

18. 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.

19. 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/

20. Who is considered employed? • Employed persons are those who, during the week of the 12th 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

21. Who is considered unemployed? • The unemployed are persons who, during the reference week of the 12th 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.

22. 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://www.bls.gov/lau/

23. Unemployment data available through Alabama LMI

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

25. Unemployment Exercise Exercise A Exercise B (If you were here yesterday) • Using the Alabama LMI website: • What was your county’s unemployment rate in March 2012? • How many people were considered unemployed? • Using the BLS website: • What was your county’s highest unemployment rate over the past 5 years? • Hint: use 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?

26. Questions?

27. Where are my region’s jobs?

28. 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.

29. 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?

30. 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

31. 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.

32. Basic/Non-basic Theory • A region’s 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.

33. 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

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

35. North American Industry Classification System (NAICS) Unique to country; standardization ends at 5-digit code.

36. 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 Benefits of NAICS

37. 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

38. Accessing Alabama LMI

39. 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?

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

41. Get State Data: State LMI Directorywww.lmiontheweb.org

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

43. QCEW Exercise • Use the BLS Website (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 • What was the most recent employment in those industries?

44. 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

45. 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 • 2010 to 2020 projections will be released this summer

46. Industry projections from Alabama LMI

47. 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?

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

49. 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?

50. Questions?