Information used in North Carolina Profile comes from a variety of programs and sources. The Methodology provides brief explanation of how data is derived for each program and the sources of information used to obtain the data.

Insured Employment and Unemployment

The data on insured employment is a compilation of information obtained from the employer's contribution reports. The contribution reports are prepared by all employers subject to North Carolina unemployment insurance laws. Nationally, the state's unemployment insurance laws cover about 97.5 percent of employees on nonagriculatural payrolls. The major exclusion are as follows:

• interstate railroads
• certain agriculatural labor and domestic service workers in private homes
• federal government employment
• unpaid family work
• self-employment

Federal employees and persons discharged from the armed services are covered by special federal programs administered by the state; they are not included in insured data. The rate of insured unemployment is the ratio of weekly average weeks claimed to covered employment.

Employment and Wages (ES-202) Program

The Employment and Wages (ES-202) Program in North Carolina summarizes data as compiled from the Employer's Quarterly Contribution Reports (QCR), Multiple Worksite Reports (MWR) and related sources. Breakouts of employment and wage data are provided by major industry divisions, as well as by two-digit Standard Industrial Classification (SIC) codes, for all industries in the private and public sectors at both the state and county levels. SIC code assignments were made using the 1987 edition of the Standard Industrial Classification Manual that became effective January 1, 1988. Preliminary work is underway which will result in the conversion of SIC codes to North American Industry Classification System (NAICS) codes.

Workers are reported in the county in which they are employed without regard to their county of residence. Beginning in 1990, the required level of reporting for employers with multiple locations in the state was changed from county to establishment level, provided specific size criteria were met. This change in methodology caused increases in the number of establishments reported, which should not be viewed as an indicator of growth unless coupled with increases in employment and wages. A special grouping is provided for establishments that report on a statewide basis; i.e., when no specific county is applicable.

For quarterly data, the average weekly wage figure is computed by dividing total wage payments by the average insured employment and then converting this into a weekly basis by dividing by 13. The average annual wage found in the annual data is computed by dividing total wage payments by the average insured employment. These figures are not true average wage scales because (1) the wages, but not employment, of all the different persons on the payroll are reflected, and (2) the assumption is made that workers worked the full quarter or year although a number of workers are not employed the whole year or quarter, and certain plants may stand idle a portion of the quarter or year. These average wages should be considered merely as indicators of wage trends rather than actual wage rates.

Source and Characteristics of Data

The data compiled by this program pertain only to the employment and wages insured under the North Carolina Employment Security Law. These data are derived from quarterly contribution reports submitted to the Employment Security Commission by employers subject to the law. The data are then compiled on an annual or quarterly basis. Employment covered by the law is estimated to represent 99 percent of the total employment in this state. Major exemptions from coverage are services performed by some workers in agriculture, some domestic services in private homes, religious and charitable organizations, interstate railroads, family workers, and self-employed.

The employment data reported include all full or part-time, permanent or temporary workers, executives and production workers who earned wages in covered activities during the pay period that includes the 12th of the month. Workers who earned no wages during the applicable period because of strikes, temporary layoffs, etc., are excluded from the employment count.

The total wage data represents all wage payments made by insured employers during the year or quarter for services performed. All wages in covered employment include bonuses, commissions and incentive payments. Taxable wage data are that part of the total wages which is subject to tax payments by employers. Under the North Carolina Employment Security Law, the amount of a worker's wages that are subject to taxation is revised each year.

Employment Projections

The information contained in Occupational Trends: 1996 to 2006 is prepared by the following procedures outlined in various memoranda and technical manuals from the United States Department of Labor and the Bureau of Labor Statistics (BLS).

Biannually, BLS publishes its industry and occupational projections in the monthly publication, Monthly Labor Review. BLS released its most recent projections in the November 1999 edition. These projections serve as one of the principal sources for compiling projections for North Carolina.

The primary goal of the Occupation Projections Program is to determine specific future occupational trends and labor market demands. Five general steps are used to reach this goal:

1. The development of occupational staffing patterns for all industries of the economy.
2. The development of employment estimates for the major industry divisions.
3. The development of industry projections for individual industries.
4. The development of occupational projections from staffing patterns and industry projections.
5. The development of total job needs from the individual components of occupational growth and replacement.

A brief explanation of these steps is presented in the following paragraphs.

An industry-staffing pattern is the ratio of the employment in each occupation to the total employment in the industry. Establishments were sampled and surveyed to obtain industrial staffing patterns for specific industries or groups of industries. The responses from the sampled establishments are then inflated to industry control figures by using unemployment insurance tax records.

Constant advances in technology cause staffing patterns to change over time. The surveys are carried out on a continual basis to keep abreast of these changes. To prevent an excessive cost burden on both the sampled establishments and the surveying agency; specific industries are studied in three-year cycles. Once the Bureau of Labor Statistics reviews the survey results to insure the statistical validity of the results and that the results do not violate the confidentiality of an individual establishment or firm, the Occupational Employment Statistics (OES) Program publishes the staffing patterns in Occupational Employment reports.

The staffing patterns for a few industries were not obtained from local surveys, but from census and other data provided to national agencies by North Carolina employers. The Current Employment Statistics (CES) Program provides information on current Employment in the nonagricultural sector of North Carolinas economy.

The unemployment insurance tax records furnish the majority of North Carolina’s nonagricultural industry employment counts. These counts present a picture of how industry employment has changed over the years from 2000 to 2006 (the historical period for this study). The Current Employment Statistics (CES) Program provides employment estimates for industries, such as Railroad workers, Church Workers, not represented in the unemployment tax records. The CES Program generates monthly employment estimates based on a sample of approximately 13,600 North Carolina firms. Employment estimates for Self-employed and Unpaid Family Workers, Agriculture and Agriculture Services are derived from the Census.

To facilitate the compilation of industry data, the definitions in the Standard Industrial Classification (SIC) Manual divide establishments into divisions, major group, and group. The Office of State Budget and Management (OSB) develops broad industry projections for North Carolina. Industry projections at the major group level for manufacturing and at the division level for non-manufacturing are obtained from OSB. Using unemployment insurance tax records and Current Employment Statistics data, these projections are then desegregated into the group level, and in turn projected to 2006 levels.

Linear Least-Squares Regression Analysis was utilized as the primary tool for this study. As a check, projections for selected industries were also prepared using various shift and share methodologies. These mechanical projections were adjusted to account for additional economic factors that cannot be included in a time series.

The staffing pattern for each industry is projected to expand or contract at the same rate as the industry. In addition, to account for the impact of technology on individual occupations, change factors are applied to the patterns. BLS determines these factors through research at the national level. Therefore, the distribution of occupations within a specific industry may differ in 2006 from what it was in 1996. To obtain the total employment in an occupation, the estimated 1996 and projected 2006 employment needs are summed separately across all industries.

Two components comprise the concept of total job needs, expansion and replacement. Expansion needs arise from an increase in the demand for a good or service. Annual expansion needs are calculated by dividing the difference between the occupational employment projected for the year 2006 and the corresponding base employment in the year 1996 by ten.

Replacement needs arise when individuals leave the occupation for such reasons as death, retirement or changing occupations. The replacement or separation rate is different for each occupation. The Bureau of Labor Statistics calculates separation rates for each occupation. A variety of factors affect the separation rate for an individual occupation, including the physical requirements of the job, occupational hazards, environmental conditions, and the demographic composition of the occupational work force.

When comparing these occupational projections to past occupational projections, it is important to note that the Bureau of Labor Statistics revised its methods for calculating separation rates. Previously, data from the decennial census is used to calculate separation rates. BLS now uses the Current Population Survey (CPS) to develop the rates. The CPS is collected monthly to estimate the national unemployment rate thus allowing more flexibility in adjusting the separation rates over time. Additionally, with the new separation rate methodology, annual replacement needs have decreased over previous projections with the old rates.

The sum of the expansion needs and the replacement needs for each occupation provides the average number of job needs for each year for that occupation. The sum of the job needs for each occupation provides the annual average job needs for the ten-year period through 2006.

Any methodology imposes limits on the use of the final product. This study is no exception. These data will not answer all the questions about future job needs. These projections are based on historical trends and upon the assumption that there will be no radical change from these trends. No attempt is made to account for cyclical fluctuations in the economy.

Since establishments are classified by their primary activity and not by their staffing pattern, the occupations found in an atypical establishment may affect the staffing pattern of the whole industry. When a relatively large establishment changes from one industry classification to another after the staffing pattern has been developed, the industry will have no effect on the staffing pattern until a new survey is made. However, after the switch, some occupations may be under- or over-represented. In some cases the nationwide staffing pattern is substituted for the statewide staffing pattern if it was felt that the changing of the establishment left the statewide staffing pattern for that industry statistically invalid.

Note that separation rates are not intended to account for labor turnover and seasonal fluctuations in employment. A "job need" is one specific position in one specific establishment for one year. As a result of labor turnover and seasonal fluctuations, any specific position may be filled more than once during a year. Therefore, the number of "hires" reported by an establishment or the number of "job openings" listed over a year’s time in a newspaper or with a public or private employment agency may well be much higher than the actual number of job needs.

Political boundaries between states, counties, and cities are invisible. They are not impenetrable barriers, which create self-contained labor markets. Employment, for the purpose of this report, is counted in the area in which the employing establishment is located without regard to the area of residence of the employee.

Finally, there are many other factors which are beyond the scope of this report, such as the availability of transportation, the availability of child care facilities, the distance to be traveled to the job, the location of distant magnet industries which draw resident labor out of a local labor market, shift work, labor supply, length of training time, and experience for the same occupation. All of these factors, as well as others, must be considered by educational and manpower planners before they begin to develop future training programs for a specific geographical area.

The Employment Services and Unemployment Insurance Reports and Program Analysis Operations cover a broad spectrum of the Employment Security Commission’s activities. These data are collected and evaluated chiefly to meet the needs of the Commission, the Bureau of Labor Statistics and the Employment and Training Administration, as well as various government agencies.

Labor force statistics for the United States are computed from data collected through the Current Population Survey (CPS). The CPS is a monthly sample survey conducted by the Bureau of the Census for the Bureau of Labor Statistics of the U.S. Department of Labor. This survey has been conducted every month since 1940. It has been expanded and modified several times with the latest revision in 1994.

The Statewide labor force estimate is calculated using a statistical model developed and approved by the U.S. Department of Labor, Bureau of Labor Statistics. Each state's model is tailored to the economic makeup of the particular state. Key elements in the monthly state model include claims for unemployment insurance and nonagricultural wage and salary employment estimates.

The model provides two data series - Seasonally Adjusted and Not Seasonally Adjusted. In the Seasonally Adjusted series, the normal seasonal fluctuations have been smoothed out making the monthly data more meaningfully when compared with data from any other month or with annual average data. In the Not Seasonally Adjusted series, changes may be due to either economic conditions or seasonal fluctuations.

Labor Force data for counties and other sub state areas are determined by a similar methodology also developed and approved by the U.S. Department of Labor, Bureau of Labor Statistics. The same method is used throughout the United States, so that the data are comparable nationwide.

The main component of the employment portion of the formula is the nonagricultural wage and salary estimate for the area. This estimate is developed from an analysis of past trends and supplemented by local survey data where available. Final estimates count individuals by county of residence.

Estimates of unemployment include all individuals who are unemployed in an area without regard to whether they filed claims for unemployment benefits. Key elements in estimating total unemployment include counts of those individuals receiving unemployment insurance benefits, those who have exhausted their benefits, those unemployed but not filing for benefits and those entering the labor market for the first time or reentering after absence.

Once estimates have been obtained for all 64 Labor Market Areas (LMAs) in the State, a proportional adjustment is applied to all the LMAs to ensure that they sum to the State total. Estimates for counties, cities, and other sub-state areas are disaggregated from LMA estimates using UI claims, current total population and decennial census data. These disaggregated estimates may not add back to the area total due to rounding.

NOTE: Sub-state data are not Seasonally Adjusted. Comparisons of sub-state data should be made to the Unadjusted State and National data.

Data is obtained through a statewide survey of newspaper accounts of closings and layoffs and from information supplied to the ESC by the employing units experiencing the closings/layoffs. Announced Business Closings and Permanent Layoffs is a monthly compilation of these reported events. No effort is made by LMI staff to verify the printed information.

The OES program is a Federal-State cooperative effort that enables States to conduct their own surveys to produce State estimates of occupations and wages. The Bureau of Labor Statistics (BLS) provides States with survey procedures, technical guidance, and assistance with problems.

The survey covered private establishments in SIC codes 07, 10, 12-17, 20-29, 30-39, 40-42, 44-49, 50-59, 60-65, 67, 70, 72, 73, 75, 76, 78, 79, 80-84, 86, 87, 89, and 90. Technically, SIC 90 does not cover private establishments It covers local and state government establishments. The reference date of the survey was the week that included October 12, November 12, or December 12 depending on the SIC code of the sample unit.

The sampling frame for this survey is the list of units in the SIC’s specified above as reported on the State Unemployment (UI) files. The reference date of the sampling frame is the second quarter of the year previous to the survey year. The universe was stratified into SIC and size class.

Each unit sampled was assigned a weight according to the ratio of units sampled in that size class. For example, when all units in a size class were sampled, the weight assigned was one. When the units were sampled at a ratio of one out of four, the sampled unit was given a weight of four. The weighted establishment then represented itself and three other establishments. Wage information was collected for each occupation in the OES coding structure by ranges.

Survey schedules were initially mailed out to approximately 12, 500 establishments over a three month period. Additional mailings were sent to nonrespondents at approximately three week intervals. Telephone follow-ups were made for those nonrespondents considered critical to the survey due to their size.

Data from the questionnaires were edited and keyed directly into a master file. The file was then processed using the OES microcomputer programs to sort and screen data. The weighted employment of each occupation in each cell was then estimated individually and summed across all cells in order to produce the final occupational employment and wage estimate for each industry. Data are then combined with the prior two years of survey results in order to reflect the data collected in three-year cycles. Previous wage data are updated to reflect current wages prior to being combined.

The North Carolina Employment Security Commission serves as host agency for a cooperative effort with the Division of Employment and Training, Department of Public Instruction, North Carolina Community College System, Division of Vocational Rehabilitation, Division of Social Services, the University of North Carolina, Department of Labor and the Department of Corrections to conduct follow-up research on completers and enrollees of publicly funded/supported training programs. The objective of this system is to track the educational, employment, earnings and occupational experiences of these individuals.

The participating state agencies supply ESC with administrative records which contain demographic data, enrollment information and completion status. The records from each agency are matched with the ESC tax file and against the data from all of the participating agencies and from other sources including ESC (Job Service and Unemployment Insurance Divisions), the North Carolina Office of State Personnel, the U.S. Civil Service, the Department of Defense and the U.S. Postal Service. The resultant data from the computerized match are compiled and returned to the respective agencies for use in planning, programmatic evaluation and statistical research.