Business Employment Dynamics

David M. TalanBranch Chief, Quarterly Census of Employment and

Wages (QCEW) Program

The Council for Community and Economic Research (C2ER)

52ND Annual ConferenceOklahoma City, Oklahoma

Thursday June 7, 2012

Outline

Background Quarterly Census of

Employment Wages (QCEW) Data

Business Employment Dynamics (BED) Data

Quarterly Census of Employment and Wages

Quarterly census of employers covered under UI and federal employers covered under UCFE

95.3 percent of civilian wage and salary employment

QCEW – Quarterly Census of Employment and

Wages

Quarterly data (frequent) Released 6 months after reference

period - timely 9.1 million records and growing 130 million in employment Units, employment and wages 6 digit NAICS and county, ownership

20 million data series available on the BLS website

UI based, mandatory collections to run UI Wages - 94% reported data Employment - 98% reported data Units - 90% reported data

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UI Tax Rate, Actuarial Analysis and UI Benefit Rates

UI-Covered Employment

Local Area Unemployment Stats

Personal Income (BEA) - U.S., State, County

Gross Domestic Product (BEA)

Economic Forecasting

Current Employment Statistics

Occupational Employment Statistics

Job Creation/Destruction• Size Class Dynamics• Business Survival Rates

Geocoded Establishments

Occupational Employment Statistics

Occupational Safety and Health Statistics

Current Employment Statistics

National Compensation Survey

Industrial Price Program

Occupational Safety and Health Statistics

Programmatic Uses

Benchmarking(Employment Base)

General Economic Uses

Quarterly Census of Employment & Wages Data (QCEW/ES-202)

Analytical Uses Sampling

Mass Layoff Statistics: linkages

State Revenue Projections (BEA)

JOLTS and Green Goods and Services

JOLTS and Green Goods and Services and State Job Vacancy Surveys…..and other federal govt surveys

Local Economic Development Indicators

• Cluster Analysis• Shift Share• Industry Diversity Indexes• Location Quotients

Federal Funds Allocation$250 Billion(HUD, USDA, HCFA/CHIP)

Minimum Wage Studies

Uses of Quarterly Census of Employment and Wages Data (QCEW/ES-202)

Local Economic Impact Response Planning

Local Government Services Planning

Census Bureau• Improve Economic Census• Improve CPS each decennial

population Census• LEHD / LED• Industry Code Sharing (3.3 M)• County Business Patterns

Local Transportation Planning

Social Security AdministrationUpdated as of 6/14/2011

Quarterly Press Releases, Annual Employment & Wages

REMI and Input-Output Tables

State/local industry employment & wages

Employment and Wage Data

Number of establishments, monthly employment, and quarterly wages

Available by: geographical area industry code size

WAGES

QCEW Mapping Tool

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QCEW Mapping Tool

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What are the BED?

BED are longitudinally linked QCEW microdata

– Unit of analysis is the Establishment BED Scope

– Private sector, excludes private households

• 6.8 million establishments• 107 million employment

BED reveals the dynamics of the labor market

BED data show gross job flows as well as net employment changes

What are the BED?

A set of statistics measuring changes in employment at the establishment level on a quarterly basis Job churn Creative destruction

What are the BED?

Gross Job Gains– Expansions – Openings

• Births

BED statistics break down the underlying dynamics of net employment change into the numbers and rates of gross jobs gained and gross jobs lost:

Gross Job Losses– Contractions – Closings

• Deaths

BED Press Release High Frequency and Timely Gross Job

Flows

Available 8 months after the reference quarter Most Recent BED Press Release

Two week speed-up last year

Data and charts available on the BLS website: http://www.bls.gov/bdm/

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Business Employment Dynamics

National Total Private National NAICS Sector National Firm Size State Total Private National Size of Employment

Change Annual (National/State) Birth Death National/State) 3 Digit national data Age and survival National and State 2 digit

September 2003 May 2004 December 2005 August 2007 September 2008 May 19, 2009 May 19, 2009 May 20, 2010 August 19, 2010 February 1, 2012

Gross Job Gains and Losses

Gross job gains

Gross job losses

BED Components

Expansions

Contractions

Openings

Closings

“A lesser-known employment snapshot, based on a quarterly census of state unemployment insurance records, shows the economy created about 19,000 private-sector jobs in the third quarter of 2006, the most recent data available... ”

- May 24, 2007

http://online.wsj.com/article/SB117996499341212776.html?mod=todays_us_page_one

Job Market’s Strength May Have Been Overstated

Construction of Buildings

Real Estate

Oklahoma: Gains & Losses

Oklahoma: Construction

Oklahoma: Education and Health Services

Arizona: Gains & Losses

North Dakota: Gains & Losses

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Small Firms Lagging, With Bulk of Job Losses

“Most of the job losses at the end of last year took place at the smallest firms, underscoring how small businesses are lagging in the recovery.” August 19,

2010

http://online.wsj.com/article/SB10001424052748704557704575437650742168186.html?mod=WSJ_economy_LeftTopHighlights

Source: U.S. Bureau of Labor StatisticsNote: Shaded area represents NBER defined recession period

Why BED data by establishment age?

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The Committee on National Statistics recommended employment dynamics data by age.

Age and survival data along will complete ‘demographic’ profile of US businesses.

Unsettled debate on who creates the most jobs: young or old firms? A debate similar to the small vs. large firms contribution to employment growth.

The impact of age of firm/establishment on employment growth and productivity is inconclusive.

New research (Young firms, Not Small Ones, Are the Engines of Growth ) showed controlling for age, there is no systematic relationship between firm size and growth.

Source: U.S. Bureau of Labor Statistics

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“Weak Pace of Start-Ups could hurt Recovery”

“Entrepreneurs have started up the fewest new U.S. businesses in more than a decade, according to government figures that could spell more bad news for job creation.”

USATODAY June 13,

2011

http://www.usatoday.com/money/smallbusiness/2011-06-13-small-business-start-ups-fewer_n.htm

Source: U.S. Bureau of Labor StatisticsNote: Shaded area represents NBER defined recession period

Source: U.S. Bureau of Labor StatisticsNote: Shaded area represents NBER defined recession period

Oklahoma: Births & Deaths

Source: U.S. Bureau of Labor Statistics

Source: U.S. Bureau of Labor Statistics

Accessing the QCEW and BED Macrodata

BED: http://www.bls.gov/bdm/home.htm

QCEW: http://www.bls.gov/cew/home.htm

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Contact Information

David M. Talan

Phone: (202) 691-6467Email: talan.david@bls.gov Website: www.bls.gov/bdm