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The statistics corner.

The Statistics Corner

EMPLOYMENT DATA collected from U.S. business by the Bureau of Labor Statistics and cooperating state employment security agencies have significant impact on our understanding of the U.S. economy and have a wide variety of uses beyond the most obvious role they play as economic indicators with the publication of monthly employment situation reports. Therefore, it is important, when considering the need to keep the data relevant and maintain their quality, to keep in mind the extensive uses to which public and private organizations put the data.

This article summarizes some of the most important of the uses of the key employment data series that are based on reports from businesses, and discusses several important new BLS initiatives to modernize the data sources, make the data more useful to the business that voluntarily provide them, and reduce the burden on those businesses in the process.



Three major statistical programs comprise the principal sources of workforce data on U.S. businesses:

Monthly Employment, Hours and Earnings Data. Employment, hours, and earnings statistics are based on monthly report from a sample of over 320,000 reporting establishments. Aggregated national data by major industry groups are first issued in a montly press release with more detailed data published for some 580 industries at the national level and for all states and over 200 local areas.

These data are closely watched in the markets, because they are widely acknowledged to be among the most reliable of the current indicators of overall economic conditions. The data are also a major component of national income, industrial production and productivity statistics. In addition, many private and public contracts provide for escalating the labor cost component of billions of dollars in longterm procurement contracts on the basis of changes in the earnings series.

Insured Employment and Wage Data. Data by industry, state and county on employment and wages of workers covered by the Unemployment Insurance (UI) system are used to benchmark data from its other sample surveys that are based on payroll records. Other agencies also use these data, e.g., to estimate a large part of the wage and salary component of the gross national product and personal income accounts and to administer and conduct research on financial aspects of the UI system. States use the data to compute the unemployment rate of persons who are insured under the UI system, which, in turn, triggers extended UI benefits. Marketers and industrial locators are increasingly turning to this data for geographic detail (down to the county level) of industry employment and wages because of its sustained quality and timeless.

The Bureau maintains an up-to-date "universe" file of the establishments reporting under the State Unemployment Insurance system, from which samples are selected for the Bureau's establishment-based surveys. A new data base maintenance system edits, updates, organizes, stores, and retrieves information stored in this file. It includes the names of nearly six million establishments, including their addresses and other characteristics. The Bureau also maintains the accuracy of the assignment of Standard Industrial Classification (SIC) codes for these establishments, which directly affects the quality of the survey samples, and helps set unemployment insurance tax levels in states that base taxes on the experience rating of the industry.

Occupational Employment Statistics (OES). Data on employment by occupation for all nonagricultural industries at the national and state level is collected on a three-year cycle from about 700,000 business each year. These data are used in the development of training programs under the Job Training Partnership Act (JTPA) of 1982, as well as by the National Science Foundation in its assessments of the nation's scientific, engineering and technical requirements. These data find their way into the national matrix of occupational employment by industry -- the data base for the development projections of occupational requirements in the years ahead. these data, in turn, are used by educators in developing occupational training programs in order to assure an adequate supply of workers to meet business demand.


These important uses call for attention to the quality, consistency and relevance of the economic data series on a continual basis. The Bureau of Labor Statistics has, in recent years, initiated a number of improvements to these basic programs. As BLS Commissioner Janet Norwood testified in regard to paperwork reduction, "a statistical agency cannot stand still; it must move forward or it will fall backward." In response to competitive pressures, U.S. business has changed more rapidly in the past few years than in any previous period. New ways of organizing production, new means of controlling costs, and, as a results, new forms of employment and compensation have characterized the U.S. business climate. All of these severly challenge the data systems that not only must document change, but must be in place prior to the change, if the change is to be observed.

Introduction of Technology in Data Collection. The monthly employment, hours and earnings survey has served as a test bed for innovation in data collection. Working through cooperating state agencies, the Bureau has developed a number of alternatives to the shuttle mail schedule, used for years to collect data from employers, but deficient in that only about 50 percent of returns were received in time to be included in the first published estimates. Today, over 5,000 firms are contacted monthly by telephone using Computer Assisted Telephone Interviewing technology. The results are encouragin -- more than 85 percent of these businesses provide data in time for inclusion in the first estimates. Most important, companies like this collection method because they invest only one-fourth of the staff time that they did previously. Emboldened by these results, BLS is experimenting with Touch-tone Data Entry and Voice Recognition technology. More than 1,000 firms are voluntarily calling us each month, at their convenience, to provide their reports.

Expanded Service Sector Coverage. The robust growth of the service sector of the economy has required special efforts in measurement, classification and analysis. Early on, the Bureau invested in expanding its monthly survey to cover additional units in the service sector, enabling publication of some eighty-two additional industries at the national level, including fifty-eight 4-digit industries, and extending detail for the states and localities. Efforts to refine and extend sample coverage of the service sector continue, assisted by the introduction of the revised Standard Industrial Classification (SIC) system in 1988. This massive reclassification effort involved surveying some 800,000 firms in industries whose code changed, converting those that changed their own classification, and generating a dual data base of aggregated data to help users bridge the gap between the old and new SIC systems. The results of this project will be published shortly, and the new codes are being used in drawing samples for all of the Bureau's surveys, a step that is bound to improve data for the service sector.

Reducing Burden. Because all of the Bureau's employment surveys are conducted on a voluntary reporting basis, a special cognizance is required of the need to reduce burden and to make the data useful to companies that cooperate with the Bureau in providing the information. A key element in reducing that burden is to improve and make more extensive use of administrative data about establishments -- data collected as part of the operation of the State Unemployment Insurance System. during the past several years the Bureau has improved the usefulness of the administrative records by improving data base management, verifying industrial coding on a recurring basis, and adding information about the character of the company to the files. In doing this, the reporting burden was reduced by introducing a simplified SIC verification form.

Even more significant reductions in the burden that federal statistical agencies place on businesses are expected when the Bureau completes its Business Establishment List (BEL) improvement project and the Office of Management and Budget designates the Bureau as the central repository of directory information for nonfarm businesses. To accomplish this, the Bureau will augment the tax collection records with information to identify the specific worksite of the firm. This information, now collected on a spotty basis by the states, will form the basis for a single confidential file containing the names and addresses, employment, SIC, wages and contributions that would be made available to federal statistical agencies for statistical purposes only. When fully implemented, this effort should reduce duplication of effort, help to ensure the comparability of data collected in the decentralized statistical system, and further improve the quality of the survey samples.


During the past decade, the Bureau of Labor Statistics has done a great deal to restructure the output from its employment statistics programs in order to minimize cost and respondent burden, marching in step with American business that is doing the same to improve its competitive position. In the process, more useful and accessible products have become available that offer uses extending beyond the traditional role they have played in economic analysis.
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Title Annotation:employment statistics
Author:Plewes, Thomas J.
Publication:Business Economics
Date:Oct 1, 1989
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