Thursday, January 30, 2014

Why no “Farm” in Nonfarm jobs?

Lecia Parks Langston, Senior Economist

When economists at the Utah Department of Workforce Services talk about jobs, we typically refer to “nonfarm” or “nonagricultural” jobs. Do we have some sort of inborn economist-prejudice against agricultural jobs? Definitely not. Trust me, we love data of all sorts. We’d adore having counts of each and every piece of employment. However, the “jobs” data we collect and analyze is primarily a by-product of the administration of unemployment insurance laws. These laws require employers subject to Utah’s Employment Security Act to report wage/employment for the management of the unemployment insurance program. Typically, if a business employs workers, it is subject to the Act.

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However, the law treats employers of agricultural workers (among others) differently. Not only are many farm jobs categorized as self-employed (also not covered by the Act), but a smaller share of hired agricultural workers are subject to unemployment insurance laws than workers in other industries.

 The North American Industry Classification System (NAICS) groups agriculture, forestry, fishing and hunting together. Only forestry and logging jobs get counted in the “nonfarm” job totals. Although these figures aren’t strictly comparable, the American Community Survey estimates Utah had more than 10,800 individuals employed primarily in agriculture, forestry, fishing and hunting in 2012 compared to only 4,900 “covered” jobs as counted in the administrative data.

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However, we do still count those 4,900 jobs even though only forestry jobs are included in the nonfarm job totals (just 43 jobs in 2012). Statewide, animal production accounted for more than half of all jobs in this industry; crop production generated another 35 percent. Whether we’re talking hog farms, dairies or brine shrimp cooperatives, the agriculture/forestry/fishing/hunting sector provides a notable number of jobs for Utahns. It even provides more employment opportunities than the utilities industry.

On the other hand, this industry accounted for a mere 0.4 percent of covered Utah employment in 2012. However, for some counties these agricultural positions account for a significant share of covered jobs. Data for counties is not publishable for seven counties due to small numbers and confidentiality issues. However, an examination of the remaining counties provides some interesting insights.

 Beaver County (16 percent) topped the list of counties with a high percentage of covered agricultural employment in 2012. Millard and Morgan counties also show high shares of employment in this group (11 and 8 percent respectively). On the other end of the scale, the agriculture/forestry/fishing employment accounted for less than 1 percent of covered employment in at least 12 counties. Not surprisingly, rural counties tend to show a larger share of agriculture/forestry/fishing/hunting jobs than urban counties.

Nevertheless, in 2012, Utah County produced the largest number of agricultural/forestry/fishing jobs (23 percent of the statewide total). Even though Utah County maintained almost 1,200 covered agricultural/forestry/fishing jobs, these jobs accounted for a mere 0.6 percent of the county’s total covered employment. Millard and Beaver counties ranked high in both the jobs list and the share of total employment list.

Obviously, even though these jobs are not included in the nonfarm job totals, it pays to keep an eye on those figures in certain counties. For example, in Beaver County, a change in agriculture/forestry/fishing/hunting jobs will often offset gains or losses in the remainder of the labor market.

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