Wednesday, November 28, 2018

Labor Underutilization in Utah

Jim Robson, Senior Economist
Utah’s official monthly seasonally adjusted unemployment rate for October 2018 was 3.2 percent. Such a low rate has characterized the Utah labor market for several years. To be unemployed and counted in the labor force, a person must not have a job, be available to take a job and have actively sought a job in the past four weeks. But this “official” unemployment rate measure is not the only labor utilization measurement. The U.S. Bureau of Labor Statistics (BLS) actually has unemployment measures and labor underutilization measures beyond the official rate. It calculates these on a quarterly basis for the nation and all 50 states.

Unemployment and labor underutilization estimates are based on a national monthly survey called the Current Population Survey (CPS). Other variable are added to the state survey results as state’s CPS sample is relatively small.

BLS’ most inclusive labor underutilization measure is known as U-6 (the last of six underutilization statistics). There are three components to U-6. In addition to the officially unemployed (U-3), BLS adds marginally attached workers—those who are available for work and have looked for work during the past year but did not look for work in the most recent four weeks (U-5). Finally, BLS adds in involuntary part-time workers[1]—those who are working part-time but want full-time jobs. This becomes U-6. U-6 cannot be labeled an unemployment rate as it includes people who are not unemployed, but these people are not working to the fullest extent they would like. From their perspective, they are underutilized. Because of this employed component, the U series is labeled as an underutilization measure instead of an unemployment measure.

Thursday, November 1, 2018

Explaining Adjustments to State Government Employment

Mark Knold, Supervising Economist

Government knows everything. Fortunately, that is not true. But there are things government would like to know, as certain information and its publication helps society function better. After all, that is why government exists—to be the glue that collectively ties us together for a common ambition or goal.

Discerning the state of the economy qualifies as one of these social goals. No entity but government has the capacity to profile, quantify, and catalogue the economy. Yet even then, that success relies upon the quality of the information provided.

The Utah Department of Workforce Services partners with the U.S. Bureau of Labor Statistics (BLS) to profile, quantify, and catalogue the Utah economy. BLS accomplishes this as an offshoot from each state’s unemployment insurance system. Employers report their payroll details into that system, and by aggregation job counts are then assembled. From there the face of the economy emerges.

There are close to 100,000 worksites in Utah from which job information is assembled. The quality of the reporting is beholden upon the employer. One firm can have several worksites, even doing disparate functions. Intermountain Healthcare, the largest employer in Utah, has many worksites. One may be a hospital, another a laboratory, another a doctor’s office or clinic; different worksites, different functions. Quantifying this is dependent upon quality IHC reporting into the unemployment insurance system.

One large employer who just improved their worksite reporting is the State of Utah itself. Utah State government is the most multi-faceted single employer in Utah. Multiple agencies with multiple functions with multiple worksites across multiple counties—it can be a major undertaking to catalogue and properly distribute State of Utah employment. But that task has recently improved.

Wednesday, October 24, 2018

They’re here . . . Utah Releases New Long Term Occupational Projections

Methodological changes don’t affect the overall trends

By Lecia Parks Langston, Senior Economist

“My interest is in the future because I am going to spend the rest of my life there.” C.F. Kettering

What’s the most frequently accessed information on the U.S. Bureau of Labor Statistics (BLS) website? Occupational outlook data. Why is the public so interested in these figures? Occupational outlook or projections data is used by individuals and counselors in career and employment planning. This information can also help education leadership plan new training and instructional programs. In addition, economic development personnel use it to understand the strengths of their local economy and planners use it to strategize for the future.

The Utah Department of Workforce Services projects occupational (and industry) employment every two years following the publication of BLS data. These Utah projections fill the same career, educational and economic planning needs at the local level. Our most recent projections are now available for state and substate areas.

Understanding the numbers

Before getting into the nitty-gritty of the projection numbers, let’s review some important concepts:

  • Projections reflect a full-employment economy in the final year. The 10-year time frame eliminates the need to forecast the business cycle. 
  • Although the base year for these projections is 2016 because of federal contract requirements, the projections are not old or dated. Economists used 2017 employment data when preparing the projections. Our projections follow federal timing requirements for base and projection years. 
  • Projected openings for a particular occupation are projected based on two sources:
    • Growth or the addition of new jobs
    • The need to replace existing workers who change occupations or leave the labor force entirely (replacement openings)
  • Following the BLS lead, we have initiated a major, new methodological change in estimating projected replacement openings. Current projections show a much higher level of replacement openings than in previous projections. Studies indicate that the new methodology more accurately reflects the numbers of openings in the economy. To read more about the change, click here.  
  • Although the number of projected openings has ballooned in comparison to previous projections, most broad trends remain unchanged. It takes countless individual changes to alter the shape and function of the entire labor market. Structural changes proceed at a snail’s pace.
  • The new estimation methodology indicates that replacement openings are a much more important source of job openings than is growth.
  • Occupations with high employment in the base year almost always show high openings across the projections period.
  • A small-employment occupation may have a high growth rate, but few openings.
  • Wages are important. Large-employment occupations often pay lower-than-average wages. Individual occupations are assigned a star rating that takes into account openings, growth and wages.
  • In order to provide the best projections possible, substate areas are identical to the sampling geographies used in the BLS Occupational Employment Statistics program — a major input to the projections process.
  • The same general patterns emerge with each new set of information. Projections do catch current trends and provide reliable information to policy makers and career planners. 

Analyzing the numbers

Because a picture (or an economist’s graph) is worth a thousand words, I’ll let my data visualizations do most of the occupational-projection talking. However here are a few trends to note:

  • Utah’s employment base is expected to show a robust average annual growth rate of 2.9 percent through 2026.
  • On average, Utah should produce 228,400 openings each year until 2026. The vast majority of these openings (81 percent) will result from workers leaving an occupation or the labor force. Only about 9 percent of openings are projected from growth in the economy.
  • The Salt Lake City Metropolitan Statistical Area (MSA) is expected to generate nearly half of all Utah job openings over the next decade.
  • The Provo-Orem MSA is likely to show the most rapid expansion through 2026, with an average annual growth rate of 4.0 percent. Washington County is also expected to show faster-than-average employment gains (3.4 percent).
  • Slowest growth is projected for the less-populated areas of the state with the Central Region (Millard, Piute, Sanpete, Sevier and Wayne counties) registering the lowest rate of annual expansion (1.5 percent).
  • The fastest employment gains are expected in occupations that typically require at least a bachelor’s degree. However, almost 70 percent of openings created between now and 2026 are expected to be for jobs which require a high school diploma or less. Many high-employment require little training and also experience a high level of occupational transfer.
  • Statewide, the large office and administrative support (clerical) occupational group is expected to generate the highest number of new openings over the projections period. Food preparation/serving and sales occupations should also see large numbers of new openings.
  • On the other hand, the fastest growth rates are projected for computer/mathematical, construction/mining, personal care/service, business, healthcare support and healthcare practitioner occupational groups.
  • In terms of projected openings, the four top occupations are fast food workers, customer service representatives, retail sales persons and cashiers. These four large occupations have consistently produced the largest number of openings in recent decades.
  • For occupations with at least 2,000 projected openings between 2016 and 2026, software developers, health specialties postsecondary teachers, market research analysts and management analysts are expected to show the fastest growth.
  • In general, the fastest growing occupations are affiliated with healthcare, computer software and construction, following the trend of past projections sets.

But wait, there’s more! For more information about Utah’s occupational projections and to explore career opportunities, explore our occupational projections online: