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Handbook of Methods Quarterly Census of Employment and Wages Concepts

Quarterly Census of Employment and Wages: Concepts

The Quarterly Census of Employment and Wages (QCEW) consists of a monthly count of employment, quarterly counts of wage levels and business establishments, and a count of workers’ average weekly wages at multiple levels of geographic and industrial detail for use by academic researchers, local governments and other federal agencies, and the public in general. An establishment is commonly understood as a single economic unit, such as a farm, a mine, a factory, or a store, that produces goods or services. Establishments are typically at one physical location and engaged in one, or predominantly one, type of economic activity for which a single industrial classification may be applied. An establishment is in contrast to a firm, or a company, which is a business and may consist of one or more establishments, where each establishment may participate in a different predominant economic activity. The QCEW provides an employment benchmark and sample frames for other Bureau of Labor Statistics (BLS) programs, as well as a basis of estimation of the wage and salary component for the Bureau of Economic Analysis Personal Income statistic. Standard sources used by the QCEW program are the North American Industry Classification System (NAICS, which replaced the Standard Industrial Classification system in the fall of 2002 and was first used in the publication of 2001 QCEW data), for industry detail; Federal Information Processing Standards, for geographic area codes; and the Office of Management and Budget, for size classes.

The QCEW makes use of a number of key variables:

• Establishment count. Aggregation of establishments in a given geographic area, in a given industry, with a given ownership status (that is, private or public), or any combination of the three.
• Employment. Counts only filled jobs, whether full or part time, and temporary or permanent, by place of work. The quarterly reports include the establishment's monthly employment levels for the pay periods that include the 12th of the month.
• Wages. Total compensation paid, including bonuses, stock options, severance pay, profit distributions, the cash value of meals and lodging, tips and other gratuities, and, in some states, employer contributions to certain deferred compensation plans (such as 401(k) plans), during the calendar quarter, regardless of when the services were performed.
• Establishment size. Classification of an establishment on the basis of the number of employees reported.
• Industry. Classification applied to each establishment on the basis of its primary economic activity.
• County. The primary local geographic designation for an establishment. It is assigned based on physical location.
• Township. A secondary local geographic designation, used primarily in the New England states and New Jersey.
• Geocode. A set of longitudinal and latitudinal coordinates identifying the location of the establishment.

Establishments are asked to provide physical addresses for their business activities. The addresses are then converted into geocodes by the BLS Office of Technology and Survey Processing and are provided to the states to add to the data. The geocodes are entered into Geographic Information Software to create detailed maps of the locations of establishments and their economic and administrative attributes.

Scope and exclusions

Private-industry employment. QCEW monthly employment data represent the number of covered workers who worked during, or received pay for, the pay period that included the 12th day of the month. Covered private-industry employees include most corporate officials, all executives, all supervisory personnel, all professionals, all clerical workers, many farmworkers, all wage earners, all piece workers, and all part-time workers. Workers on paid sick leave, paid holiday, paid vacation, and the like are also covered. Workers on the payroll of more than one firm during the period are counted by each employer that is subject to Unemployment Insurance (UI), as long as those workers satisfy the preceding definition of employment. Workers are counted even though their wages may not be subject to UI tax in the latter months of the year. In this regard, the federal UI taxable wage base is the first $7,000 paid in wages to each employee during a calendar year. Thus, at whatever point in the year an employee reaches that accumulation of wages, he or she is no longer taxed in the months remaining.

Government employment. Employment at all federal agencies for any given month is based on the number of people who worked during, or received pay for, the pay period that included the 12th of the month. Employment data reported for federal civilian employees are a byproduct of the operations of state workforce agencies in administering the provisions of Title XV of the Social Security Act of the Unemployment Compensation Federal Employees (UCFE) program. Federal employment data are based on reports of monthly employment and reports of quarterly wages, both submitted quarterly to state agencies. Reports are submitted for all federal installations with employees covered by the act, except for certain national security agencies, which are excluded for security reasons.

Besides excluding the aforementioned national security agencies, QCEW excludes proprietors, the unincorporated self-employed, unpaid family members, certain farm and domestic workers from having to report employment data, and railroad workers covered by the railroad unemployment insurance system. Excluded as well are workers who earned no wages during the entire applicable pay period because of work stoppages, temporary layoffs, illness, or unpaid vacations. Excluded from QCEW federal government employment are elected officials in the executive or legislative branch, members of the armed forces or the Commissioned Corps of the National Oceanic and Atmospheric Administration, individuals serving on a temporary basis in case of fire, storm, earthquake, or other similar emergency, and individuals employed under a Federal relief program to relieve them from unemployment. For a complete list of federal government exclusions, see appendix A of the UCFE Instructions for Federal Agencies. Excluded from QCEW state and local government employment are elected officials, members of a legislative body or members of the judiciary, members of the state National Guard or Air National Guard, and employees serving on a temporary basis in case of fire, storm, snow, earthquake, flood or similar declared emergency. For a complete list of state and local governments excluded services, see the coverage section of the most recent Comparison of State UI Laws.

Wages. In most states, covered employers report total compensation paid during the calendar quarter, regardless of when the services were performed. A few state laws, however, specify that wages be reported for or be based on the period during which services are performed rather than the period during which compensation is paid. Under most state laws or regulations, wages include bonuses, stock options, severance pay, the cash value of meals and lodging, tips and other gratuities. In some states, wages also include employer contributions to certain deferred compensation plans, such as 401(k) plans.

Covered employers’ contributions to old-age, survivors, and disability insurance; health insurance; UI; workers’ compensation; and private pension and welfare funds are not reported as wages. Employee contributions for the same purposes, however, as well as money withheld for income taxes, union dues, and so forth, are reported, even though they are deducted from the worker’s gross pay.

Comparisons of related data series

For any given quarter, BLS publishes three different establishment-based employment measures. Each of the three measures—the QCEW, Business Employment Dynamics (BED), and Current Employment Statistics (CES)—is based on QCEW establishment reports, which are an enhanced and corrected version of quarterly unemployment insurance (UI) employment reports. Each measure has a somewhat different universe of coverage, estimation procedure, and publication product.

Differences in coverage and estimation methods can result in somewhat different measures of employment change over time. It is important to understand program differences and the intended uses of the program products. Exhibit 1 presents important differences among the three BLS employment measures.

Comparisons with other data programs

BLS publishes three different establishment-based employment measures for any given quarter. Each of these measures—the QCEW, BED, and CES—makes use of the quarterly UI employment reports in producing data. Each measure, however, has a somewhat different universe of coverage and estimation procedure, and each produces a different publication. Other data series are briefly covered here.

Current Population Survey

Current Population Survey (CPS) is published monthly by BLS. CPS employment data are estimated from a survey of about 60,000 U.S. households, while QCEW employment data are summarized from quarterly reports submitted by 10.0 million U.S. establishments. CPS counts employed people, whereas the QCEW program counts covered workers who earned wages during the pay period that includes the 12th of the month. Consequently, the CPS includes people “with a job but not at work” who earn no wages, for example, workers on extended unpaid leaves of absence. QCEW data, by contrast, exclude unpaid workers. QCEW data count separately each job held by multiple jobholders. While the CPS counts such workers once, in the job at which they worked the most hours, it does have some multiple jobholder data. The CPS counts employed persons at their place of residence; the QCEW program counts jobs at the place of work. CPS also differs from the QCEW program, in that it includes self-employed people; unpaid family workers employed 15 or more hours during the survey period; and a greater proportion of agricultural and domestic workers. CPS data exclude people under age 16, while the QCEW program counts all covered workers, regardless of age.

Local Area Unemployment Statistics

The Local Area Unemployment Statistics (LAUS) program is a hierarchy of nonsurvey methodologies, designed to replicate the household-based concepts from the Current Population Survey (CPS) in order to produce monthly unemployment rate estimates by state and local areas. For each of the roughly 7,000 unique subnational areas, the LAUS program independently estimates employed people and unemployed people. These estimates are summed to derive civilian labor force, and then the unemployment rate is calculated as the percent unemployed of the civilian labor force.

The LAUS employment measure pertains to employed people by their place of residence. Employed people, in accordance with the CPS concept, are those who did any work at all for pay or profit during the survey reference week, including work in their own unincorporated business or on a farm. This is distinct from the QCEW employment measure, which pertains to counts of jobs subject to unemployment insurance laws by place of employment.

Another way to understand the scope difference between the LAUS and QCEW programs is through the framework of supply and demand. LAUS estimates relative slack in the supply of labor at the local level, and doing so requires measures of how many people are working, versus not employed but actively seeking work. QCEW provides counts of the met demand for workers by establishments subject to unemployment insurance laws. For a given area, only if all working residents had one job at an establishment operating within that same area, with no workers at any of the establishments operating within that area commuting from outside of that area, would the LAUS and QCEW employment levels match. This would preclude self-employment, most agricultural work, multiple jobholding, telecommuting, and cross-border commutation.

Bureau of Economic Analysis

The Bureau of Economic Analysis (BEA) Regional Income Division produces local personal income and employment estimates (along with regional GDP and other data) for counties, metropolitan statistical areas, and other local area aggregates. These data are available to search at https://apps.bea.gov/itable/iTable.cfm?ReqID=70&step=1. BEA regional data are based primarily on QCEW data, with other outside inputs for non-QCEW concepts used for a few industries. Regional data are produced using selected NAICS industries from 2001–forward, with selected Standard Industry Classification (SIC) industries used for data from 1969–2000. QCEW establishment counts, employment, and wages are produced for all NAICS industries at the national, state, county, and Metropolitan Statistical Area (MSA)-level detail back to 1990, with SIC industry data available from 1975–-2000.

While BEA local area estimates include QCEW (data) for a large portion of their employment and compensation inputs, with reconciliation against QCEW data prior to publication, these BEA products include resources outside of QCEW, and are therefore not directly comparable to QCEW. More information about BEA regional data can be found at https://www.bea.gov/system/files/methodologies/LAPI.pdf.

Office of Personnel Management

The U.S. Office of Personnel Management (OPM) publishes a statistical series on Federal employment and payrolls with information on employing agencies, types of positions and appointments, and characteristics of employees. Data on Federal employment covered by the UCFE series provide industry, local area, and monthly employment detail not available in the OPM series.

Both UCFE and OPM data exclude active duty members of the Armed Forces, temporary emergency workers employed to cope with catastrophes, and officers and crew members of some U.S. vessels. UCFE and OPM data differ in coverage of workers. For example, UCFE, but not OPM, includes Department of Defense workers paid from nonappropriated funds and employees of county agricultural stabilization and conservation committees, State and area marketing committees, and the Agricultural Extension Service. OPM, but not UCFE, includes workers who are not U.S. citizens and who are employed outside the United States and its territories; workers paid on a contract or fee basis; paid patients or inmates of Federal homes, hospitals, or institutions; and student employees of Federal hospitals, clinics, or laboratories.

The UCFE and OPM programs also differ in the payroll reference period. UCFE employment data relate to the payroll period that includes the 12th day of the month. OPM data, however, relate to persons employed on the last workday of the month, or the last pay period before the end of the month, plus all intermittent employees.

OPM federal data and information can be accessed from the OPM Policy Federal Employment Reports page. Questions about OPM federal employment data can be directed to fedstats@opm.gov or by calling 202-606-1789.

Quarterly Workforce Indicators

The Quarterly Workforce Indicators (QWI), which uses QCEW and UI data as a major input (see Longitudinal Employer-Household Dynamics), provides local labor market statistics by industry, worker demographics, employer age and size. Unlike statistics tabulated from firm or person-level data, the QWI source data are unique job-level data that link workers to their employers. Because of this link, labor market data in the QWI is available by worker age, sex, educational attainment, and race and ethnicity. This allows for analysis by demographics of a particular local labor market or industry—for instance, identifying industries with aging workforces. Links between workers and firms also allow the QWI to identify worker flows—hires, separations, and turnover—as well as net employment growth. More information about QWI is available at https://lehd.ces.census.gov/doc/QWI_101.pdf.

County Business Patterns (CBP)

County Business Patterns (CBP) is an annual series provided by the US Census Bureau that provides subnational economic data by industry. This series includes the number of establishments, employment during the week of March 12, first quarter payroll, and annual payroll.