Academic journal article Monthly Labor Review

A First Look at Employment and Wages Using NAICS: With the Release of the North American Industry Classification System Data, a New View Is Introduced, One Which Better Reveals the Inner Workings of the U.S. Economy. (NAICS Employment and Wages)

Academic journal article Monthly Labor Review

A First Look at Employment and Wages Using NAICS: With the Release of the North American Industry Classification System Data, a New View Is Introduced, One Which Better Reveals the Inner Workings of the U.S. Economy. (NAICS Employment and Wages)

Article excerpt

In the fall of 2002, the Bureau of Labor Statistics will release industry employment, wages, and establishment count data for 2001 based on the North American Industry Classification System (NAICS) structure. This article presents the first glimpse of the data. By previewing these data, users can begin to acquaint themselves with the new structure. The data presented in this article are based on preliminary private sector U.S. totals for the first quarter of 2001. This, the first BLS data based on NAICS, comes from the Covered Employment and Wages or CEW/ES-202 program. (1)

CEW background

Every business and government establishment in the United States, Puerto Rico, and the U.S. Virgin Islands, with employees covered by unemployment insurance programs, files quarterly unemployment tax reports. CEW data are derived from these reports. In the first quarter of 200l, these reports accounted for more than $1.2 trillion in wages, of which more than $1 trillion was paid to private sector employees. Data are produced on monthly employment, quarterly wages, and quarterly counts of establishments. State Employment Security Agencies (SESAS) and BLS work cooperatively to conduct the CEW program. (2)

Throughout the past several years, the SESAS have spent many hours converting approximately 8 million CEW reports to NAICS. Their hard work is in evidence, as the conversion process is nearly complete, with more than 97 percent of the reports now converted. These cover greater than 99 percent of private sector employment, with most of the remainder consisting of new reports with fewer than five employees, which have not been in the system long enough to be assigned detailed industry codes.

The timing of CEW data release is determined by each State's data collection flows and by the completion of BLS review and correction activities. The CEW data flow begins when employers file quarterly unemployment insurance tax reports. At the end of each calendar quarter, every employer submits these reports to the SESAS, which edit and correct the quarterly data and submit it to BLS, where it undergoes final review. Each fall, BLS releases CEW monthly, quarterly, and annual data for the preceding year. Most States release CEW data on their own behalf.

Although other sources of industry employment data do exist at the national and State levels, CEW provides detailed data at the county and metropolitan area level, CEW also offers much more detailed information at the State level than is available from more timely, sample-based programs such as the Current Population Survey or the Current Employment Statistics program.

NAICS basics

Since 1988, the detailed CEW information has been broken into detailed industries according to the system set forth in the 1987 version of the Standard Industrial Classification (SIC) Manual. Data prior to 1988 were tabulated according to the 1972 version of the SIC Manual. Beginning with the release of data for 2001, CEW publication will switch to the 2002 version of NAICS as the basis for the assignment and tabulation of economic data by industry. NAICS is the product of a cooperative effort on the part of the statistical agencies of the United States, Canada, and Mexico.

NAICS and SIC differ in their design structures; therefore, data for 2001 will not be comparable to the sic-based data for earlier years. The data presented below illustrate a few examples of the differences between NAICS and SIC structures. NAICS uses a production-oriented approach to categorize economic units. Units with similar production processes are classified in the same industry. Thus, NAICS focuses on how products and services are created, as opposed to the sic focus on what is produced. This approach yields significantly different industry groupings than those produced by the SIC approach. The NAICS development process was not an update of the SIC system; rather, from a fresh starting point, its developers could establish new categories reflecting the structure of the modern economy. …

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