The ABC's of Missouri's Future Workforce, Part 1 OCT 2001
Economic Activity in Missouri: Synopsis of Economic Indicators APR 2001
Missouri Employment Outlook-Projections to 2008 for Industry and Occupations
Missouri Occupation Profiles


  Occupational Employment Projections
Methodology and Definitions


Methodology

About Projections Data
Employment projections give an overview of where the Missouri economy may be headed based on past and present trends. The purpose is to offer some insight into questions regarding the future growth or decline of industries and occupations. The projections estimates assume a long-run, full-employment economy and should not be used as a measure of employment gaps. The employment projections produced by MERIC are not unconditional predictions of the future. They are probability statements about future activity in various industry and occupational sectors of Missouri's economy. Government policies, corporate decisions, economic swings and natural or man-made disasters are only a few of the factors that can cause employment in a particular industry or occupation to change in a totally unexpected way. Employment Projections can be used by individuals and counselors for career guidance. Projections data can also be used by planners to determine the need for education and training courses as well as by developers for regional planning to target industries and occupations.

The Projections Process
MERIC develops both industry and occupational employment projections. MERIC develops projections for almost 300 detailed industries at the statewide level. For the state MERIC develops projections for about 750 detailed occupations.

MERIC develops two different sets of projections on a regular basis. Short-term projections are developed each year and are on a two year horizon. Short-term projections are developed at a statewide basis with estimates for two sub-state regions, Kansas City and St. Louis Metropolitan regions. Long-term projections cover a 10 year period and are developed every other year. Projections are developed for the state and 10 sub state areas. The 10 sub state areas are based on the Workforce Investment Areas which were established under the federal Workforce Investment Act of 1998. The two exceptions are the Kansas City area which includes the Kansas City Vicinity and East Jackson County Workforce Investment Areas and the St. Louis area which includes St. Charles, St. Louis City, St. Louis County, and Jefferson/Franklin Consortium Workforce Investment Areas.

Developing employment projections is a four step process. First, MERIC gathers historic industry employment to identify trends. Second, using these trends and other factors MERIC projects the industry employment into the future. Third, at the same time MERIC collects occupational employment within industries which is referred to as staffing patterns. Finally, once MERIC has the industry projections and these staffing patterns we produce occupational employment projections.

Industry Projections
The source for the historic industry employment is the U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages. This employment comes from the Unemployment Insurance Program that is led by the Missouri Department of Labor and Industrial Relations. This employment data is by place of work down to the county level and represents the number of jobs in an area. Although the employment data from the UI program covers most of the non-farm employment in the state MERIC supplements it with additional employment including self-employed, agriculture, religious organizations, and railroads. The industries are classified using the North American Industry Classification System.

To project industry employment in the short term there are several different types of modeling techniques used including: trend analysis, VAR, BVAR, regression analysis, and ARIMA. For the long term projections trends, shift share modeling, and regression analysis are used. The national explanatory factors MERIC uses in the short term models include new unemployment insurance claims, a composite index of the 10 leading indicators, consumer expectations, interest rate spread, money supply, and total non-farm employment. The explanatory factors used in the long term models include national industry projections, population projections and personal income projections. The final product from all of this is:

  • Base year employment
  • Projected year employment
  • Numeric change (difference between the base and projected year employment)
  • Percent change (numeric change expressed as a percent)

Industry/Occupational Staffing Patterns
With occupational projections, the occupations within industries (staffing patterns) are obtained through the Occupational Employment Statistics Survey, which is conducted by MERIC staff. This survey is a U.S. Bureau of Labor Statistics and state cooperative program. This program surveys a sample of the businesses that are covered by the unemployment insurance program. In Missouri about 30,000 establishments out of about 168,000 are surveyed over a three year period. The information received from this survey includes employment and wages by occupation. The projections program uses the occupational employment within industries or staffing patterns data that is developed from the survey.

Occupational Projections
To obtain the occupational employment projections, staffing patterns are applied to the base and projected year industry employment. Because occupational employment changes over time and is not static, adjustments are made to the staffing patterns to predict future staffing needs. Factors provided by the Bureau of Labor Statistics are used to make these adjustments. These factors tell whether an occupation is growing in importance in an industry, declining in importance the industry or is not changing in importance.

Also estimated are the number of openings that are expected to occur in each occupation over the projection period. There are two sources of openings that are estimated. The first, openings due to growth, are the numeric change expected over the projections period. The second and equally important source of openings are net replacement openings. These openings occur when workers leave the labor force or change occupations. Again information provided by the Bureau of Labor Statistics allows MERIC to make estimates of these job openings. The final product for the occupational projections includes:

  • Base year employment
  • Projected year employment
  • Numeric change (difference between the base and projected year employment)
  • Percent change (numeric change expressed as a percent)

MERIC publishes the openings from growth and replacements. Again it is recommended that the numeric change, percent change, and the openings are viewed together. Viewed separately, they can give an unrealistic outlook for the occupation.

Additionally, MERIC assigns nationally defined education and training categories to the occupations. There are 11 categories ranging from short term on the job training, which requires less than a month of on the job training, to professional degrees needed in occupations such as doctors, lawyers, and dentists. These education categories should not be viewed as requirements for the jobs but as the usual pathway to enter a job. For example, a bachelor's degree in accounting can lead to a job as an accountant but not all accountants have degrees.

MERIC also assigns grades to the occupational data to easily assess an occupation's outlook. Occupational grades are based on a 15 point scale derived from a standardized index of total openings, percent change, and average annual wages over the 10 year projections horizon. Grades range from an "A+" for significantly high wages, growth, and openings to an "F-" for significantly low wages, growth, and openings.

 

Definitions

Annual Openings - Annual openings are the sum of annual new jobs and replacements. Annual new jobs are the numeric change in employment over the projection period. Replacements are an estimate of the number of jobs that will arise from the need to replace workers who will die, retire, or otherwise permanently leave the occupation.

Base Industry Employment - Employment corresponding to the base year in the projections horizon gathered from the Quarterly Census of Employment and Wages (QCEW) Survey by the U.S. Bureau of Labor Statistics (i.e. base employment for the 2004-2014 projections horizon would correspond to 2004 annual QCEW employment). Base employment data from QCEW is used in the employment projections process to create the 10 year employment projections. This count does not include self-employed or unpaid family workers.

Business Description - Description of a particular company gathered from a proprietary database which collects employer data via phone books, phone survey, etc.

Career Grade - Occupations are graded on a combination of average wage, percent growth, and total openings over the next 10 year period of employment projections. Standardized values for each of the three variables were created and grades were assigned based upon a standardized index of job openings, percent growth, and average wages. Grade-A designated occupations have the best outlook for the 10 year period while Grade-F occupations have the worst outlook.

CIP Code (Classification of Instructional Programs Code) - The CIP is a taxonomic coding scheme that contains titles and descriptions of primarily postsecondary instructional programs. The CIP is the accepted federal government statistical standard on instructional program classifications.

City Location - Geographic location of a particular company gathered from a proprietary database which collects employer data via phone books, phone survey, etc.

Company Name - Name of a particular company gathered from a proprietary database which collects employer data via phone books, phone survey, etc.

Employment - In Occupational Employment and Wages Estimates, this is the rounded estimate for each occupation based on OES sampling. These employment estimates are rounded to the nearest ten, and do not include the self-employed or unpaid family workers.

Employer Size - Size ranges of companies that are gathered from a proprietary database which collects employer data via phone books, phone survey, etc. Size ranges are: 1-4, 5-9, 10-19, 20-49, 50-99, 100-249, 250-499, 500-999, 1000-4999, 5000-9999, 10000+.

Employment Figures - Base occupational employment corresponds to the base year in the projections horizon gathered from the Occupational Employment and Wage Survey (OES) by the U.S. Bureau of Labor Statistics (i.e. base employment for the 2004-2014 projections horizon would correspond to 2004 annual OES employment). Base employment data from OES is used in the employment projections process to create the 10 year employment projections. This count does not include self-employed or unpaid family workers. Projected occupational employment is estimated for a 10 year period created in the

Entry Wage - An entry wage is defined as the mean of the lower third percentile of the sampled population of surveyed workers. In the Occupational Employment and Wages Estimates, this wage is calculated by MERIC and included only in WIA and Statewide estimates.

Experienced Wage - An experienced wage is defined as the mean of the upper two-thirds percentile of the sampled population of surveyed workers. In the Occupational Employment and Wages Estimates, this wage is calculated by MERIC and included only in WIA and Statewide estimates.

Industry Description - An explanation of functions and duties typically performed by employees in a particular NAICS industry.

Industry Grade - Industries are graded on a combination of net change, percent growth, and average annual wages over the next 10 year period of employment projections. Standardized values for each of the three variables were created and grades were assigned based upon a standardized index of net change, percent growth, and average wages. Grade-A designated industries have the best outlook for the 10 year period while Grade-F industries have the worst outlook.

Industry Title - A descriptive title that corresponds to the NAICS Code.

Knowledge, Skills and Abilities (KSA) - Knowledge refers to an organized set of principles and facts applying in general domains. Skills refer to developed capacities that facilitate learning or the more rapid acquisition of knowledge. Abilities refer to enduring attributes of an individual that influence performance. Data is collected by the Occupational Information Network (O*NET) based on responses by sampled incumbent workers at a national level.

Knowledge, Skills and Abilities (KSA) Score - Data collected from incumbent workers at a national level in the O*NET survey. Each characteristic is rated by incumbent workers in terms of the level, importance, and frequency that is required in day to day work.

Mean Wage - The mean wage can also be called the average wage, and is calculated by summing the wages of all the workers in a given occupation and then dividing the total wages by the number of workers. Wages are gathered from the Occupational Employment Statistics (OES) survey, and estimates are calculated by occupation based on the Standard Occupational Classification (SOC) system.

Median Wage - The median wage is the estimated 50th percentile of the distribution of wages based on data collected; 50 percent of workers in an occupation earn less than the median wage, and 50 percent earn more than the median wage.

NAICS Code (North American Industry Classification System Code) - Classification system used by federal statistical agencies to classify workers into a six digit hierarchical coding system to classify all economic activity into twenty industry sectors. Five sectors are mainly goods-producing sectors and fifteen are entirely services-producing sectors. NAICS allows for the identification of 1,170

Occupational Title - A descriptive title that corresponds to the SOC Code.

Percent Change - Percent employment change indicates how fast employment is expected to increase or decrease during the projection period. The larger the positive percent change, the faster employment is growing. A large positive percent change is generally an indicator of favorable employment prospects. Likewise, the larger the negative percent change, the faster employment is declining, and the more unfavorable the employment prospects.

Program Title - A descriptive title that corresponds to the CIP code.

Projected Industry Employment - Employment that is estimated for a 10 year period created in the employment projections process.

Related Occupation Title - A descriptive title that corresponds to the related SOC Code.

Related SOC Code - Occupations related to another based on O*NET analysis of knowledge, skills, and abilities data.

Standard Error: Indicates the extent to which a survey estimate is likely to deviate from the true sample population and is expressed as a number. The Relative Standard Error (RSE) is the standard error divided by the mean and expressed as a percentage.

SOC Code (Standard Occupational Classification Code) -This is a system used by federal statistical agencies to classify workers into occupational categories for the purpose of collecting, calculating, or disseminating data. All workers are classified into one of 840 detailed occupations according to their occupational definition. For more information on SOC codes and occupational definitions, click here.

Wages - Wages for the OES survey are straight-time, gross pay, and exclude all premium pay. Wages include base rate, tips, cost-of-living allowances, guaranteed pay, hazardous pay and incentive pay, such as commissions and production bonuses. Wages do not include back pay, jury duty pay, overtime, severance, shift differentials, nonproduction bonuses or tuition reimbursements. Hourly wages include both full and part time workers, and are rounded to the nearest cent. Annual wages include only full time workers, paid hourly or on salary, and are rounded to the nearest dollar.

WorkKeys® Skills - WorkKeys® is a national workforce development system that compares a worker's skills with the skills required to successfully perform a specific job. Scores are provided for three different core skill sets: Applied Mathematics (AM), Locating Information (LI), and Reading for Information (RI). For more information about WorkKeys® skills, please visit www.act.org/workkeys/assess/.

WorkKeys® Skills Scores - For Reading for Information (RI), There are five levels of difficulty. Level 3 is the least complex and Level 7 is the most complex. The levels build on each other, each incorporating the skills assessed at the preceding levels. For example, at Level 5, individuals need the skills from Levels 3, 4, and 5. The reading materials at Level 3 are short and direct. The material becomes longer, denser, and more difficult to use as readers move toward Level 7. The tasks also become more complex as readers move from Level 3 to Level 7. At Level 3, readers begin by finding very obvious details and following short instructions. At the more complex levels, tasks can also involve more application and interpretation. For Applied Mathematics (AM) there are five levels of difficulty. Level 3 is the least complex and Level 7 is the most complex. The levels build on each other, each incorporating the skills assessed at the previous levels. For example, at Level 5, individuals need the skills from Levels 3, 4, and 5. For Locating Information (LI), there are four levels of difficulty. Level 3 is the least complex and Level 6 is the most complex. The levels build on each other, each incorporating the skills assessed at the preceding levels. For example, Level 5 includes the skills used at Levels 3, 4, and 5. At Level 3, examinees look for information in simple graphics and fill in information that is missing from simple graphics. At Level 6, examinees may use the information in one or more complex graphics to draw conclusions and make decisions. The complexity can also increase as the quantity and/or density of the information increases.



Return to the Top