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Purpose of NAICS Revision

Implementation of the NAICS 2007 Revision in Bureau of Labor Statistics Programs Amanda Chadwick Michael Searson. Purpose of NAICS Revision. NAICS Revisions occur every 5 years, alternating between large and small in scope The 2007 NAICS Revision was small in scope and changes were limited to:

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Purpose of NAICS Revision

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  1. Implementation of the NAICS 2007 Revision inBureau of Labor Statistics ProgramsAmanda ChadwickMichael Searson

  2. Purpose of NAICS Revision • NAICS Revisions occur every 5 years, alternating between large and small in scope • The 2007 NAICS Revision was small in scope and changes were limited to: • Clarifying certain industry descriptions • Fixing items missed in 2002 definitions • Collapsing certain industries • NAICS Revisions: • Reflect current economic activities • Capture new and emerging technologies

  3. Federal Register Notices • March 11, 2005 – 70 FR 12390 • Contains the decision for 12 industry splits, 7 direct changes, 15 title changes and 1 number change • March 16, 2006 – 71 FR 28532 • 1 additional industry split

  4. What is included? • 13 Splits • 13 2002-based industries that split into more than one 2007-based industry • 7 Directs • 7 2002-based industries that can be directly converted from one 2002-based code to one 2007-based code • The remaining industries are considered out of scope and are not affected by this revision

  5. SplitsOne-to-More than One • 11 of the split industries only have 2 possible 2007 codes • It is possible for 9 of these 11 codes to remain in their original 2002-based code • 1 split industry has 5 possible 2007 codes • 525930 – Real Estate Investment Trusts (REITs) • 1 split industry has 7 possible 2007 codes • 339111 – Laboratory Apparatus and Furniture Manufacturing

  6. 111219Other Vegetable (except Potato) and Melon Farming 111998All Other Miscellaneous Crop Farming 315211Men’s and Boy’s Cut and Sew Apparel Contractors 315212Women’s, Girls’, and Infants’ Cut and Sew Apparel Contractors 326199All Other Plastics Products Manufacturing 326291Rubber Product Manufacturing Use 326299All Other Rubber Product Manufacturing 334220Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing 339111Laboratory Apparatus and Furniture Manufacturing 518111Internet Service Providers 525930Real Estate Investment Trusts (REITs) 541612Human Resources and Executive Search Consulting Services 541710Research and Development in the Physical, Engineering, and Life Sciences The 13 Split 2002-Based NAICS Codes Estimated National total – 67,000 establishments

  7. 516110 Internet Publishing and Broadcasting 517211 Paging 517212 Cellular and Other Wireless Telecommunications 517310 Telecommunication Resellers 517510 Cable and other Program Distribution 517910 Other Telecommunications 518112 Web Search Portals DirectsOne-to-One Relationships 7 industries in this revision that will be converted directly from the 2002-based code to their appropriate 2007-based code Estimated National Total – 23,000 establishments

  8. Milestones/Timeline • January 2005 - Decision to combine the NAICS 2007 Revision with the 2007 ARS • March 2005 - Federal Register with NAICS Update for 2007 Notice released • March 2006 - Second Federal Register with NAICS Update for 2007 Notice released • August 2006 - NAICS 2007 Revision (N7R) State training • October 2006 - 2007 ARS Begins • October 2006 - Dual Coding Begins (Varies State to State)

  9. Milestones/TimelineContinued • January 2007 – Meet with BLS Programs on data conversion • May 2007 - 2006/4 Data to National Office - Early look at N7R changes via the future NAICS fields on the EQUI file • End of July 2007 - 2007/1 Data to National Office • End of August 2007 - 3 files become available • November 2007 - Dual Coding Ends (Varies State to State) • January 2008 – Final analysis of 2007 NAICS revision

  10. First Program to convert is Quarterly Census of Employment and Wages (QCEW) • Used as a sampling frame for most BLS surveys • Used as employment base or benchmark for most BLS surveys

  11. Uses of Quarterly Census of Employment and Wages Data (QCEW/ES-202) • Job Creation/Destruction • Size Class Dynamics • Business Survival Rates Geocoded Establishments Industrial Price Program National Compensation Survey Current Employment Statistics Occupational Employment Statistics Occupational Safety and Health Statistics Job Openings & Labor Turnover Survey • Local Economic Development Indicators • Clusters Analysis • Shift Share • Industry Diversity Indexes • Location Quotients Current Employment Statistics Gross Domestic Product (BEA) Personal Income (BEA) - U.S., State, County Occupational Employment Statistics State Revenue Projections Minimum Wage Studies Economic Forecasting Occupational Safety and Health Statistics REMY and Input-Output Tables Quarterly Press Releases, Annual Employment & Wages Job Openings & Labor Turnover Survey General Economic Uses Benchmarking (Employment Base) Quarterly Census of Employment & Wages Data (QCEW/ES-202) Analytical Uses Sampling • Census Bureau • Improve CPS After 2000 Census • LEHD / LED • Industry Code Sharing (3.3 M) • County Business Patterns Programmatic Uses UI Tax Rate & Actuarial Analysis Local Government Services Planning UI-Covered Employment Local Economic Impact Response Planning Local Area Unemployment Local Transportation Planning Mass Layoff Statistics Federal Funds Allocation $206 Billion (HUD, USDA, HCFA/CHIP) State/local industry employment & wages UI Benefit rates Updated as of 2/22/2006

  12. QCEW Program Fed/State Cooperative Statistical Program • Program started with the passage of Federal Unemployment Tax Act (FUTA) • BLS provides funding, deliverables, manuals, guidelines, and methodologies to State agencies • States collect & edit data (decentralized approach)

  13. QCEW Statistics • 4th Quarter 2006 Stats: • 8.9 Million establishments • 135.9 Million employment • $1.516 Trillion Wages

  14. Data Coverage • 98 Percent of all non-farm salary Workers in the U.S. • 45 Percent of U.S. Agricultural Workers.

  15. Data Sources for the QCEW Program • Primary Administrative Records of the State Workforce Agencies - UI Tax departments. • Secondary Supplemental forms designed by BLS to meet additional program statistical needs. These are administered by the State LMI staff.

  16. QCEW Data Collection Forms • Status Determination • Quarterly Contribution Report • Annual Refiling Survey (ARS) • Multiple Worksite Report (MWR) • Report of Federal Employment & Wages

  17. Status Determination Form (SDF) • Used to determine an employer’s liability for Unemployment Insurance • Basis for initial assignment of industrial, geographic and ownership codes • Mandatory for employers to file • Initial source of UI Tax and physical location addresses

  18. Purpose of ARS • Review and Update (if necessary) • Mailing & Physical Location addresses • County code • Single/multi-worksite status • Industry code (NAICS)

  19. Annual Refiling Survey (ARS) • About the Form: • BLS designed (standardized) • Mandatory in 23 States • 1/3 of Universe reviewed annually (historically) • Sample based on 7th & 8th digit of EIN • Verification System • Minimum 75% response rate in units or 80% employment for States

  20. Forms and Descriptions • No changes will be made to the current ARS forms • Multiple choices on the forms for splits, regular descriptions for the rest • Special industry descriptions created for split industries • Ask for percentages of sales/receipts on split industries • Companies have the opportunity to describe their economic activity if the provided industry descriptions are not accurate

  21. State Training • Provided training to all States • On-line computer based training in the month of September for State industry coders • All changes described in the Federal Register Notices • ARS form design • System Changes to monitor changes

  22. ARS and Dual Coding • Only 2007/1 will be ‘fully’ dual coded • Every active 2007/1 record must have both a 2002 and 2007 code • Start – The beginning of the ARS • After creating the FY 2007 control file (Mid-October) • Stop – The end of 2007/1 processing • Final submittal of 2007/2 • Who – The establishments in the split industries

  23. Program Manager Meeting • QCEW provides data to other BLS statistical programs who use NAICS • Describe 3 files that will be created to capture the revision • 2002 based changes • Does not include any 2007 revision • Revision changes • Uses only 2007/1 date to show the impact of the revision • Total changes • Uses 2006/4 and 2007/1 • Includes all changes: Non-revision adjustments and Revision changes • 3 files will capture all program needs

  24. Final Analysis • Use the data from the 3 files to determine the impact of the revision • On both a QCEW and BLS program base • Additional BLS program meeting for future revisions • 2012 will be the next NAICS revision

  25. Implementation of the NAICS 2007 Revision in Bureau of Labor Statistics Programs • For additional information contact: • Michael A. Searson • Searson.Michael@bls.gov • 202.691.6469 • Amanda Chadwick • Chadwick.Amanda@bls.gov • 202.691.5486 • U.S. Bureau of Labor StatisticsPostal Square Building2 Massachusetts Ave., NE • Suite 4840 • Washington, DC 20212-0001 • www.bls.gov

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