THE LMI TRAINING INSTITUTE Orientation for New LMI Directors

Acknowledgments Class funded by the Workforce Information Council Administered under contract by the LMI Training Institute Supported by the NASWA LMI Committee

Labor Market Institute L abor M arket I nformation

Labor Market Information A dynamic and systematic approach to data—designed to meet the changing needs of our customers

Labor Market Information Or, to put it more simply … Basically, it’s any data or analysis that relates to the workforce.

Labor Market Information Who are our customers???

Data or Information?? Customer Driven Determine Needs Determine Method of Delivery

LMI TRAINING INSTITUTE The Workforce System: A General History

The Roots of the System - ES Free public Employment Service – Generally thought to begin in medieval times Concept in 15 th /16 th Century Europe First public registry of jobs/job-seekers in Nuremburg, Germany in 1431 Early 1900s – nationwide in eight European countries plus Canada, New Zealand and South Africa

The Roots of the System - UI First public UI System – Berne, Switzerland in 1893 (subsidized public to which workers could contribute) Originator of present system in Ghent, Belgium in 1901 (tied monthly benefit to unemployment rate) Spread to 90 cities in Europe in early 1900s and nationally in France, Norway and Denmark First compulsory law – Great Britain in 1911

The United States Experience New York City 1834 – first public employment office followed by first state-directed public employment system in Ohio in1890 Massachusetts 1869 – first state bureau of labor statistics – by 1883, in 12 more states June 27, 1884 – Bureau of Labor created in Department of Interior Bureau of Labor’s mission: “to collect information upon the subject of labor, its relations to capital, the hours of labor and the earnings of laboring men and women, and the means of promoting their material, social, intellectual and moral prosperity” Created first national employment data in 1916

The United States Experience Federal involvement in ES in 1907 with Department of Commerce and Labor First federal employment office on Ellis Island Department of Labor separated in 1913 By then, 62 federal public employment offices in 19 states Wisconsin passed first statewide UI law June 6, 1933: FDR signed Wagner-Peyser Act and Employment Service was established – full federal/state system Social Security Act of 1935 created federal/state Unemployment Insurance system Most states started Research and Statistics sections in the 1930s as part of process

The Birth of Federal/State LMI In 1945, national series to yield employment estimates for each state State agencies collected data; regional offices compiled figures; all data sent to DC to construct national estimates Budget cuts in 1947: complete compilation of numbers shifted to states under cooperative agreements By 1949, all states involved (start of CES)

The Last Fifty Years Manpower Development and Training Act of 1962 – shift to most in need Comprehensive Employment and Training Act of 1973 – established “comprehensive LMI system” – created Division of LMI – provided funding – core products set – major ETA involvement FY 1976 – line-item LMI funding Job Training Partnership Act of 1982 – spelled out LMI requirement explicitly – more local decision making

The Last Fifty Years Levitan Commission (National Commission on Employment and Unemployment Statistics): funding and oversight transferred to BLS from ETA in FY 1984 – BLS started requiring contractual agreements ETA disavowed any responsibility for LMI – Division of Labor Market Information abolished

1990s and 2000s Birth of America’s Labor Market Information System in 1994 Consortia-based decision making Extensive funding from ETA Workforce Investment Act of 1998 Specifies LMI as part of the system with funding Establishes one-stop system of which LMI is a part

Funding for the System BLS Cooperative Agreements – One Year ETA Workforce Information Grant – Three Years Different Years Other Funding Sources

Meeting Customer Needs Varied customers, varied needs Information types – sometimes requires additional feedback Data versus information Different delivery methods depending upon customer One size does not fit all customers.

Requirements of ETA Public Access to Data Workforce Information Database Occupational Employment Projections Annual economic analysis report Customer Feedback Support for Workforce Investment Boards Outreach Special research studies

Website Options Vendors: CIBER, Geographic Solutions, Other In-state options Oregon: Washington: Virginia:

WIRED Grants Workforce Innovation and Regional Economic Development Encourages regional communities to partner and leverage assets and resources Requires extensive labor market information Currently around 40 WIRED regions

Dealing with the Media Hard Lessons Keep It Simple Never Give Opinions Stand By the Facts Role Varies State to State

Working with Administrators The Boss is always right. BLS Restrictions Estimating versus Actual Budget Constraints versus Getting the Work Done Different Organizational Entities

Basic Terminology Speaking the Language – Acronyms and Concepts

Labor Force Terms and Concepts Employed –Worked at least one hour for pay –During the week that includes the 12 th Unemployed –No job attachment –Able, available for and actively seeking work –Can be experienced or a new or re-entrant

Labor Force Terms & Concepts Labor Force –16+ years old –Employed + Unemployed Unemployment rate –Unemployed ÷ Labor Force Expressed as % Labor Force Participation rate –Labor Force ÷ Working Age Population

Labor Force Terms & Concepts Discouraged Workers –Harder to define and sometimes undercounted –Generally are on long- term layoff with no immediate prospects Underemployment –Also hard to define and count –Basically can be anyone working below their skill level –Might be underemployed by choice

LMI TRAINING INSTITUTE BLS Cooperative Programs

The foundation upon which most of our data rests …

Next on the Agenda The Quarterly Census of Employment and Wages (QCEW)

Quarterly Census of Employment & Wages The History Began with national UI system in 1938 BLS assumed responsibility in Expanded scope of program with UI coverage –Initially UI only covered firms who employed 8 or more workers at least 20 weeks per year –Now about 96% of total wage and salary employment covered

Data Sources for QCEW UI quarterly contribution reports UCFE federal agency employment Supplementary employer surveys by state LMI offices –Multiple establishment detail (MWR) –Industrial coding (annual refile survey) –Follow-ups triggered by edits

Uses of QCEW Data Employment benchmarks for all BLS federal/state employer survey programs — CES, OES & OSHA Critical for Bureau of Economic Analysis –Personal income –State and national product Local planning –Only consistent source of county employment and wages by industry Analysis requiring universe or detailed data

QCEW Limitations & Changes Some employment for large firms may be reported in the wrong areas. Some firms report total number of employees in a quarter as employment for each month. Data is not a time series. –No wedging of changes by industry or area from the following: Annual refile survey Changes in multi-establishment reporting Shift to NAICS — Break in series

Next on the Agenda The Current Employment Statistics (CES) Program

History of CES First BLS employment surveys in 1915 Hours and earnings in 1933 in response to Great Depression Employment estimates for all states by 1940 Federal/state relationship by 1949

Coverage Differences Between CES & QCEW The following categories of workers are included in CES estimates but not included in QCEW: –Full commission salespersons –Elected and appointed government officials –Teachers in summer months who are paid on 12- month contracts

Data Sources for CES Covered employment from QCEW, supplemented with non- covered adjustments, is used to benchmark levels. A monthly employer survey is a major part of the program, using a variety of collection methods.

Uses of CES A primary economic indicator of employment, earnings, and working hours for national, state, and selected areas Total employment growth used by Federal Reserve Incorporated in preliminary estimates of National Product and Income Incorporated into productivity estimates

CES Limitations & Changes Sample size limits state and area industry detail (switch to probability method). Sum-of-states employment does not equal national total. Estimates for many substate areas are not funded. Though accuracy exceeds that of other economic data, benchmark revisions still cause criticism. Earnings are for production workers and are not available for many state industries.

CES Birth-Death Factor CES samples contain firms that may go out of business, but not firms that are just beginning. –Over time, this causes estimates based only on sample to underestimate employment An adjustment is added by BLS to reduce magnitude of benchmark revisions. Example: – Previous month’s estimate = 10,000 – Sample trend = – Bias adjustment factor =.0040 – Adjusted trend factor = – Current month’s estimate = 10,140

And now on to… The Occupational Employment Statistics (OES) Program

Occupational Employment Statistics (OES) OES: An employer survey which produces employment and wage-rate estimates by occupation and industry for states and areas BLS and ETA originally shared responsibility with the states. When BLS took total federal responsibility for the program, existing funds were spread over all states.

History of OES Began in 1971 – 50,000 surveys in US Originally involved ten cooperating states before being extended to 15 and then all states

History of OES In 1996, the following changes were made. Sample was increased to be the largest of any employer survey. Wage rates were added for all states and substate areas. All industries were surveyed each year rather than every third year.

OES Staffing Estimates Data developed with most current 3 years of data Surveys conducted twice annually Employment by occupation tallied for each detailed industry Staffing ratios developed representing each occupation’s share of industry employment

OES Wage Rate Estimates Data tallied by wage ranges Wage-rate averages generated by weighted interpolations Prior data aged (brought up to date) by other BLS wage survey trends (ECI)

State & Area Occupational Projections ETA funded but tied to OES Composed of adjusted OES staffing ratios applied to industry employment projections Short-term projections — 2 years out Long-term projections: 10 years out Technical assistance available at the following site: dev.projectionscentral.com

Estimate Delivery System Originally developed by Occupational Projections Consortium – not part of BLS Software produces occupational and wage estimates for substate areas Designed to be used in conjunction with MicroMatrix system Output files are database ready

The fourth BLS program is … The LAUS Program Which stands for Local Area Unemployment Statistics

History of LAUS Concepts developed in the 1930s Monthly Report of Unemployment in 1940 – Changed to Current Population Survey in —Handbook method introduced 1972—BLS took responsibility for program 1973—Large-state direct-use monthly estimates and handbook trends forced to CPS averages 1989—Model-based estimates for all nondirect-use states 1996—Model-based estimates for all states

Advantages of Model-Based Estimates Less erratic trend than direct CPS monthly state estimates Cheaper than direct CPS estimates Predicts annual averages more accurately than handbook-trended estimates Note: U.S. data comes directly from the CPS, not from a model.

Substate LAUS Estimates Handbook method - used to allocate labor market areas (LMAs) from state estimates Population-claims method used where possible for estimates of LMA parts Census-share method used for parts of LMAs when claims are not available No statistical measures of precision

Lastly, we come to … The Mass Layoff Statistics (MLS) Program

Mass Layoff Statistics Began life as PMLPC in 1984 under JTPA Renamed Mass Layoff Statistics in 1989 Intent: To track serious layoffs and closings by industry Not very useful for Rapid Response Good post-occurrence analytical tool Many states don’t have enough activity to publish data

Background Material for All BLS Statistical Programs BLS Handbook of Methods Download:

Cheat Sheet

System Operation Who are our partners in the system and how do we communicate with each other? What resources are available?

System Resources

Workforce Information Council Works together to plan, guide and oversee the nationwide information system Federal Co-chair: Jack Galvin State Co-chair: Graham Slater Members elected to represent regions across the country

WIC Members Roger Therrien, Connecticut Peter Neenan, New York Deep Gupta, Pennsylvania Rebecca Rust, Florida Keith Ewald, Ohio Mark Hughes, Texas Bill Niblack, Missouri Tom Gallagher, Wyoming Naomi Harada, Hawaii Graham Slater, Oregon

Policy Councils Specialized groups to support the nationwide workforce information system Centered around the following BLS programs: OES, QCEW, CES and LAUS/MLS Mixture of federal and state staff to look at issues and make recommendations

NASWA LMI Committee Specialized committee under the umbrella of the National Association of State Workforce Agencies Representatives from NASWA states appointed by the individual states Headed by Commissioner Teresa Voors of the Indiana Department of Workforce Development Assisted by Don Wehbey, NASWA LMI staff person Holds annual NASWA LMI Conference with awards for outstanding system products and the Chavrid Award

Conferences and Training LMI Forum NASWA LMI Conference BLS LMI Directors’ Meeting Other Conferences LMI Training Institute

Basic Analyst Class Applied Analyst Class GIS Class LMI for Front-line Staff Other Classes as Requested Certification Process Best Practices LMI Forum LMI Institute Website Benefield Award New Business Plan ETA Funds for Training

Basic Analyst Class December 3 – 5, 2008 Location: Orlando, Florida Information on the website

Analyst Resource Center Resource for Workforce Information Database administrators National Crosswalk Center Information on Employer Database National Conference in St. Louis in late October

Projections Managing Partnership displays projected data for all stateswww.projectionscentral.com technical assistance for producing projectionswww.dev.projectionscentral.com

Employment Dynamics Employment Dynamics from BLS: Job gains and losses by area from QCEW Longitudinal Employer-Household Dynamics from Census: Uses UI and Census data to measure detailed workforce activity by area LEHD/LED also produces Quarterly Workforce Indicators

WIN/WIN Project Workforce Information Innovators Network Goal – “Advance the application and integration of data, analysis and research to decision making in regional development by establishing and supporting an active national practitioner network” John Dorrer, Chair

Supply and Demand Occupational Supply and Demand System – Georgia State University

Other Partners Bureau of Economic Analysis (BEA) National Governors’ Association International Association of Workforce Professionals National Association of Workforce Development Professionals

ANY QUESTIONS?