Effects of Hurricane Katrina on the Quarterly Census of Employment and Wages

The Quarterly Census of Employment and Wages (QCEW), also known as the ES-202 program, provides a near census of monthly employment and quarterly wage information by industry, with data released each quarter, six to seven months after the end of the reference period. The QCEW is a federal/state cooperative program in which BLS and individual State Workforce Agencies publish national, state, metropolitan, and county level data. QCEW employment counts include all workers covered by State Unemployment Insurance (UI) laws and Federal workers covered by the Unemployment Compensation for Federal Employees (UCFE) program.

The QCEW employment and wage totals for the third quarter of 2005, published on April 12, 2006, were the first to reflect the impact of Hurricane Katrina, subject to the collection and estimation issues discussed below. The hurricane struck the Gulf Coast on August 29, with catastrophic effects in parts of Louisiana, Mississippi, and Alabama.

For the third quarter 2005 totals, BLS and its state partners made several modifications to the usual process. These adjustments were designed to more accurately reflect the employment situation for September. The changes can be summarized as:

• Imputation procedures for non-respondents were modified in the most heavily impacted disaster areas to recognize the likelihood of businesses being temporarily or permanently out of business.
• BLS and state workforce agencies conducted additional collection and information gathering efforts, including personal visits to the New Orleans area to determine appropriate treatments. State UI agencies made additional efforts to identify late reporters and provide those late reporters to the BLS state partners.

For the fourth quarter 2005 totals, BLS and its state partners plan to continue some of these modifications, as appropriate.

The questions and answers below provide more detailed information on quarterly census concepts relevant to the post-hurricane environment, impacts on data collection, and the methodological adjustments made by BLS to improve the accuracy of the QCEW totals for the third quarter of 2005.

QCEW CONCEPTS AND DEFINITIONS

1. How are people who are absent from their jobs counted as employed by the QCEW?

2. Workers who are paid by their employer for all or any part of the pay period including the 12th of the month are counted as employed, even if they were not actually at their jobs. Workers who are temporarily or permanently absent from their jobs, but not being paid, are not counted as employed. The state workforce agencies made a special effort to contact businesses in the disaster areas about their plans to pay displaced or absent workers.

3. Are military reservists who were called up to aid in the disaster relief counted as employed in the QCEW?

4. Active duty military personnel are not counted in the QCEW; it is a count of civilian jobs.

5. How are workers from other parts of the country who may be on temporary assignment to the disaster area, such as utility workers, counted by the QCEW?

6. These workers are counted as employed at their usual place of work. For example, utility workers from Virginia working temporarily in Louisiana would be counted in the Virginia employment totals, but not in the Louisiana totals.

7. How are wages paid to absent workers counted in the QCEW?

8. They are included in the quarterly total. Wages represent total compensation paid during the calendar quarter, regardless of when services were performed. Included in wages are pay for vacation and other paid leave, bonuses, stock options, tips, the cash value of meals and lodging, and in some States, contributions to deferred compensation plans (such as 401(k) plans).

   QCEW DATA COLLECTION ISSUES

9. Was BLS able to collect information from businesses that are located within the disaster areas in Louisiana, Mississippi, and Alabama?

10. BLS and its state partners attempted to collect third quarter 2005 reports from all of the businesses in the quarterly census. Response rates were lower than normal in Louisiana and Mississippi, particularly in the heavily impacted areas in and around New Orleans and the Mississippi Gulf Coast, where businesses may be temporarily or permanently closed. For the first preliminary third quarter 2005 QCEW publication, employment for about 19 percent of the total number of reports in Louisiana covered by the QCEW had to be imputed due to non-response, compared to 11 percent in the third quarter of 2004. For Mississippi about 10 percent of the reports had imputed employment compared to about 7 percent in the third quarter of 2004. Within the hurricane impacted areas, Orleans Parish was the most affected in Louisiana, with its imputation rate rising to 39 percent from 15 percent a year earlier. Harrison County was the most affected in Mississippi, with an imputation rate of 25 percent. A disproportionate share of smaller reporters did not submit reports. See question 8 below for more information.

    It is important to note that more than a third of the census reports covering the hurricane-affected areas in these states actually originate from outside of the local areas. Large national and regional companies with many locations across the country often report data for all of their locations from a single central site. BLS received a normal first response from these businesses.

11. Did BLS make any extra efforts to collect census reports from the hurricane-affected areas? 

12. BLS and its State partners use several data collection techniques, including multiple worksite reports, central collection of large multi-state employers, missing data notices, and telephone contact. State UI agencies made additional extraordinary efforts to identify late reporters and provide information from these reports as possible. State agencies also attempted telephone follow-up with larger respondents who did not report during the collection cycle. This effort helped to increase response rates in these areas.

    QCEW IMPUTATION PROCEDURES

13. How did BLS modify its imputation procedures to recognize that non-respondents in the most heavily impacted disaster areas may be temporarily or permanently out of business?

14. For non-respondents that State staff were unable to contact in the most heavily impacted disaster areas, QCEW assumed the business was not operating and therefore had an employment level of zero in September—except for firms where further research indicated that the business was paying their employees for the pay period including the 12th of the month. For non-respondents with zero employment imputed for September, the imputed quarterly wage total was reduced by a third. July and August employment for these firms was imputed using normal methodology.

    If QCEW had followed its usual imputation procedure for non-respondents, most non-responding units in these areas would have been imputed based on each unit’s year-ago change. This assumption, given the circumstances in the affected areas, was unlikely to be accurate, and, therefore, following standard imputation procedure carried a strong risk of understating employment and wage loss.

    For purposes of this procedural adjustment, BLS defined the most heavily impacted disaster areas to be those geographic areas designated by the Federal Emergency Management Agency (FEMA) as being flooded and/or having catastrophic or extensive damage. In Louisiana, records were selected by zip codes which closely matched the FEMA disaster areas.

15. What were the QCEW imputation rates for the most heavily impacted counties in Louisiana and Mississippi?

16. Due to extraordinary efforts by BLS state partners, many areas reported at levels comparable to past performance. Orleans Parish was a notable exception. See tables below.

9. When will these special imputation procedures be discontinued?

10. No decision has yet been made.

11. Do the QCEW totals reflect employment increases that may result from hurricane evacuees finding jobs in their new locations?

12. The QCEW census covers every employer in the U.S., Puerto Rico and the Virgin Islands subject to unemployment insurance coverage. The quarterly census is expected to fully capture employment increases in the overall employment estimates resulting from workers starting jobs in new locations. These workers will be included in the September counts if they started work in their new location during the pay period including September 12. Otherwise, they will be first included in the October employment total. The QCEW cannot quantify this effect separately. 

13. Has BLS previously modified QCEW imputation procedures in the aftermath of other disasters?

14. No, the QCEW program has always been able to obtain fairly normal response rates following other disasters and imputation procedures were not modified. However, the extent of the destruction over a large geographic area and near total evacuation of a major US city were unprecedented, and it was unlikely that QCEW would be able to complete all of its normal data collection for the third quarter of 2005 and possibly subsequent quarters. Also, existing imputation procedures were likely to underestimate the actual job loss.

15. Which metropolitan areas were directly affected by the storm?

16. The following areas had one or more counties designated as disaster areas eligible for individual and public assistance by FEMA:

         Louisiana:

• Baton Rouge
• Houma-Bayou Cane-Thibodaux 
• Lafayette
• Lake Charles
• New Orleans-Metairie-Kenner

    Mississippi:

• Gulfport-Biloxi
• Hattiesburg
• Pascagoula

   Alabama:

• Mobile

Hurricane Information | Labor Market Statistics

Last Modified Date: April 12, 2006