In this episode, host Megan Calcote highlights some of the best tips from the Reynolds Center presentation at SABEW 2015 with University of Michigan economist Donald Grimes. Grimes highlights the importance of regional data in national data series and where some of the best data sets are located. He explains how some of the surveys work and recommends when is the best time to look at those data sets. The conversation includes the importance of understanding sample sizes and how to dig deeper into outliers and large changes that appear over time.
To access some of the reports and surveys Grimes recommends during the podcast, click below:
- Bureau of Economic Analysis
- Current Employment Statistics Survey (CES)
- Quarterly Census of Employment and Wages (QCEW)
Transcript
[Intro music]
Megan Calcote: How to Cover Money: Finding regional employment data.
Donald Grimes: This is the gold standard for federal government data on employment and on wages.
Calcote: Hello and welcome to the Reynolds Center podcast. We are coming to you from the Donald W. Reynolds National Center for Business Journalism based at the Walter Cronkite School of Journalism and Mass Communication at Arizona State University. I’m Megan Calcote, host of the How to Cover Money podcast. Today you’ll hear tips for finding regional employment data from University of Michigan economist Donald Grimes. Don originally shared these tips at SABEW 2015 at the start of his presentation, Don explained why it’s important to look at employment data on a regional level.
Grimes: There’s much greater variation across regions at any point in time than there is with within the United States over time. So you’ll have much higher unemployment rate. Some places, you still have an unemployment rate of in the double digits, 14% some metro areas and counties, and you’ll have other areas right now where the unemployment rates 2%. You’ll have labor shortages in some regions, and you’re having enormous labor surpluses in other regions. There’s a great variation in income performance. Some areas are prospering, some areas are struggling. And so essentially, if you’re studying regional economics at any different time, or you’re reporting on regional stories, you can actually find more interesting, at least more variance, than people who are just looking at sort of what’s happening nationally in an aggregate sense. But the problem, of course, is that regional data, which I look at a lot, is more problematic than national data. There are enough problems with our national data, but by the time you’re looking at regional data, you’re looking at questions of sample size. If it’s a survey sample, you’re looking at classification issues, geographic classification issues, where do you locate a particular business or a firm?
Calcote: This question of where a particular business or firm is located can be extremely important from year to year. As you’re about to hear changes in economic data can sometimes be caused by inconsistencies in how a business is classified.
Grimes: Few years ago, we were doing a forecast for Washtenaw County, and we were forecasting employment in the auto industry. We looked at the prior years forecast, and all of a sudden, the employment unexpectedly dropped by like 3000 jobs. We were really puzzling why there had been this drop in employment in Washtenaw County. And it turns out that the General Motors Hydramatic plant sits on the border of Wayne County and Washtenaw County, and all of a sudden, the people who were collecting the data decided to locate the plant in Wayne County instead of in Washtenaw County. And so therefore the employment dropped because it shows up in Wayne County. Actually, we talked to the guy who told us this. We know these people are sort of informal. We said, “What happened?” and he said, “Well, where do you want me to locate it?” You have to understand that this is not as clean as one would like.
Calcote: If you look at regional data and notice large changes like this, don’t be afraid to dig into it and see what might be causing those changes. Like Don discovered, sometimes it’s a result of how the data has been handled. When you’re ready to start pulling employment numbers, there are a number of national organizations that provide several different reports you can use. Don recommends checking the Bureau of Labor Statistics, the Bureau of Economics and the Census Bureau.
Grimes: The data that everybody wants to look at first is employment data. It all really boils down to federal government statistics. We have two, three, if you get to the Census stuff, sort of regional employment data series. Two are put out by the Bureau of Labor statistics that are establishment employment series, plus a household service, which puts out by the Bureau of Labor Statistics. The Bureau of Economics puts out a regional data account that’s also out there. And, of course, the Census Bureau puts out different employment numbers. So there are employment numbers that are coming out of all of these different government agencies.
Calcote: If you’re looking for state and local employment statistics, take a look at the Current Employment Statistics Survey provided by the Bureau of Labor Statistics. This survey includes employment data for all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, and about 450 metropolitan areas and divisions within the United States.
Grimes: This series is what’s called the Current Employment Statistics Survey. It’s the CES. It’s a series that comes out roughly every month. It’s available for states and metropolitan areas, not areas that are smaller, not counties, but states and metropolitan areas. The two problems with this data series as an employment series are that it’s based upon a sample of firms, and every winter they revise the previous two years worth of data. And so there are some problems. Sometimes you’ll see something and you’re going along and the data is not good. They try to estimate the whole country out of the sample using a variety of statistical techniques, but it’s got problems. It also doesn’t have quite as much coverage, because it’s a survey, and they’re trying not to disclose individual data on individual firms, so you cannot get as much industry detail as most people would like. But if you want a quick overview of what is happening, this would be one of the best series.
Calcote: Another great data set that Don recommends is the Quarterly Census of Employment and Wages. According to the BLS website, the QCEW publishes a quarterly count of employment and wages reported by employers covering 98% of U.S. jobs available at the county and state and national levels by industry.
Grimes: And this is probably the best series for employment in the United States. This is what’s called the Quarterly Census of Employment and Wages. It is based upon administrative records for every firm and for every employee who’s eligible for unemployment insurance. Files reports with the federal government, with the unemployment insurance agencies describing their earnings and their employment status. And it takes a little longer, this is usually only available without a six to nine month lag from the actual data. This data allows you to get very, very detailed industry information by county, not just by metropolitan area, but down to the county level. The CES data, when they do their benchmarking every every winter to fix the sample problems, they benchmark it to this data. So the government trusts the QCEW data much more than the CES data. This is the gold standard for federal government data on employment and on wages.
Calcote: Finally, Don recommends checking the Bureau of Economic Analysis to review their annual releases of employment data. As you’re about to hear, this data is important to become familiar with, because it includes a group of workers that have become extremely important since the economic downturn.
Grimes: Now we have the Bureau of Economic Analysis also puts out employment data. They only put it out annually, so it’s an annual average for the employment data for counties. For states, they put it out quarterly. But for counties, it’s only available annually. The big difference is that in both of the two BLS series, they are only counting establishment employees, people whose firms are paying unemployment insurance, taxes and then a wage and salary, which means the firm is paying their half of the Social Security benefits. They don’t include self-employed workers. The Bureau of Economic Analysis employment numbers includes self-employed workers. So in one sense, it’s the broadest measure, and getting a count of people who are self-employed, those are people who file a Schedule C tax return, is really important, because that’s been growing over time the number of people who are self-employed. It’s also counter-cyclical. What happens in the economy is that when people lose their wage and salary job, a lot of people will move to self-employment status. They may collect unemployment insurance benefits for a while, but when those run out, you see this bump up in people who are essentially self-employed contractors, a lot of them handyman type stuff. The construction worker who shifts from that the person who becomes a consultant, or a news reporter, freelance, right? So this has become a much more important part of the economy over time, and it’s counter cyclical. It’s much more important during the business cycle, so that they are counted here, but they’re not counted in the other two employment series. But one thing that might be a little bit of a issue is that, essentially, once you file that self-employment tax form, you get counted once as an annual employee. So you could only be maybe you’re only doing that for a month or two out of the year inbetween doing jobs, but you still get counted for the whole year. So it tends to inflate the number of people who are self-employed.
Calcote: If you’re interested in looking at some of this data for yourself, We’ve included links to all of these reports on the show notes for this episode, visit businessjournalism.org to get started. Thank you Don Grimes for being a part of our presentation at SABEW 2015 and thank you listeners for joining us for another episode of the How to Cover Money podcast. Applications are now open for the 2017 Reynolds Week in business journalism, if you’re a working journalist looking to learn more about covering money-related topics, or if you are a university or college faculty member interested in teaching business journalism, this week long boot camp is for you. Visit businessjournalism.org, and click Awards and Fellowships at the top of the page to submit your application for this prestigious fellowship opportunity. Applications are due on Sunday, October 16, and space is limited. If you’re in need of more business journalism training, the Reynolds Center can help. Visit businessjournalism.org to find articles and self-guided training, download our free eBook: Guide to Business Beat Basics, register for our free email course on Covering Financials, or sign up for our weekly newsletter. The newsletter will keep you up to date on training opportunities from the Reynolds Center year round. If you enjoy the How to Cover Money podcast, make sure to subscribe on iTunes, Stitcher or SoundCloud. And while you’re there, leave us a rating or review to let us know what you thought of this episode. Support for the How to Cover Money podcast comes from the Donald W. Reynolds National Center for Business Journalism. Join me on our next episode, when we go behind the scenes of the 2015 Barlett and Steele Awards Gold prize-winning investigation, titled “Fish Slavery.”
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