Occupation Data Use Cases

Candi Clouse, PhD

July 24, 2020 18:22

Developing Targeted Job Training Initiatives with Regional Strengths & Weaknesses

Preparing the local workforce to fill the jobs that local businesses have open (or will have open in the future) can help close the economic loop within a regional economy. That is, the ideal situation would be for local jobs to be filled by local workers. This helps close the regional loops by preventing wage leakage due to commuting and by grounding local businesses within the community. Whether it is the local community college, job skills training programs, or vocational up-training programs it’s important that there is alignment between the training received by workers and the skills needed by local businesses. The goal of this article is to demonstrate how a community can evaluate the types of jobs in the local economy, the skills needed to fill those jobs, and the expected wages of those jobs so that local education partners can train local workers to fill them and keep more talent, more businesses, and more money in the local economy. Check out the article on Location Quotients to learn how the Occupational LQs can help inform these decisions: What can a LQ do for you?

Employment Requirements: New Hospital Operations

Whatever your impact or contribution, one of the most valuable ways to tell your story comes from the jobs your activity supports. Whether it’s by directly employing people, the jobs your activity supports through your supply chain, or through jobs supported by wage spending, jobs are one of the most tangible and important measures of your impact or contribution.

As an example, let’s consider a new hospital being built in Mecklenburg County, NC. This is a new, state-of-the-art, hospital in an underserved urban area. Once the hospital is finished it will employ 500 workers. The company building and operating the hospital would like to show the County Board of Commissioners what the Economic Impact will be of the operations of the hospital. The Board of Commissioners has said that in addition to creating economic impacts, they will need to show that at least 40% of the 500 expected jobs (or at least 200 jobs) at the hospital will go to workers who have education levels less than a bachelor’s degree in order to qualify for certain requirements for tax exemptions.

Framing a full economic impact of a hospital is covered in detailed articles on Construction and Hospitals, so here we will keep things simple and focus on fulfilling the requirement of 40% of jobs going to a workforce with less than a bachelor’s degree. After setting up and running our analysis, we can use the Occupation Data to determine what the education level is of the workers expected for the hospital. Here’s how this project looks on the Impact screen:

By looking at the Core Competencies on the Results tab of our analysis, we can find the Education table below that shows the distribution of the education levels of the Direct Jobs.

Adding up the workers at education levels below “Bachelor’s Degree” the firm is able to show that they expect more than 350 of the 500 (or more than 70%) of the jobs at the hospital to go to workers who have education levels less than a Bachelor’s Degree.

Additionally, if we include not only the 500 Direct Jobs in the hospital, but ALL jobs through the supply chain and support through the spending of wages (i.e. Direct, Indirect, and Induced jobs), we can see that more than 70% of the nearly 800+ jobs in Mecklenburg County supported by the operations of the hospital are expected to go to workers who have less than a Bachelor’s Degree. This means that the hospital more than doubles the requirements for the tax exemption, which is sure to make the Board of Commissioners quite happy!

Evaluating Different Occupation Opportunities (NMTC)

New market tax credits are powerful incentives that the economic development community can use to entice new businesses or encourage business retention within the local economy. However, it can be difficult to understand what different opportunities bring to the local economy. This section demonstrates how analysts might compare two (or more) economic development opportunities in terms of the numbers, types, and wages of the jobs that would be expected to accompany them.

Let’s say the IMPLAN Economic Development Corporation™ has received approval from Mecklenburg County, NC to provide a New Market Tax Credit (NMTC) to a new business being brought into the county. The objective of the NMTC is to provide more jobs in the county for low-skill, low-income workers in coordination with affordable housing projects in progress. So, the requirements for the NMTC are that the project must support at least 100 jobs in occupations that make an average wage of less than $45,000 per year in Mecklenburg County.

There are two applications for the NMTC. The first application is for a Restaurant Co-op which would house four different restaurants and will employ a total of 125 people. The other application is for a retail business which provides tutoring, test preparation, and other educational services which will employ 225 people. Here’s how this looks on the Impacts screen:

Looking at the Occupation Data in IMPLAN for Mecklenburg County, we can see there are 7 major occupation categories that have an average annual wage of less than $45,000.

Food preparation workers and education services workers are both in this group. Since we know the education services business is planning to employ 100 extra employees, we could reasonably expect that it may produce more jobs with wages below $45,000. However, with the new Occupation Data in IMPLAN we can actually look at these individual occupations and how many jobs are in each category.

First, let’s look at the jobs breakdown for the Education Services Business:

Next, let’s take a look at the breakdown for the Restaurant Co-op.

Digging deeper into the occupational distribution of the jobs supported by these projects it’s apparent that the restaurant co-op project is likely to produce more jobs with annual salaries below $45,000, even though the education services business is going to initially employ 100 more people.

Using this type of analysis can help guide local development groups towards policy that are more aligned with their stated goals. Let’s hope the four new restaurants are fantastic. Maybe we’ll finally get that good Thai food restaurant we’ve been hoping for!

Occupation	Average Annual Wage	Jobs Supported by the Restaurant Co-Op	Jobs Supported by the Education Services
Food Preparation and Service Related Occupations (35-0000)	$21,622.75	114.38	4.26
Personal Care and Service Workers (39-0000)	$22,642.71	0.77	6.24
Military (99-0000)	$26,534.78	0	0
Building and Grounds Cleaning and Maintenance Occupations (37-0000)	$30,194.95	1.61	2.69
Healthcare Support Occupations (31-0000)	$32,338.17	0.49	0.84
Protective Service Occupations (33-0000)	$39,842.25	0.57	2.48
Education, Training, and Library Occupations (25-0000)	$42,512.70	0.33	54.13
TOTAL JOBS	-	118.15	70.64

Business Location or Expansion

As organizations look to expand, locate, or relocate, one of the primary questions they must answer is how prospective areas match the labor force needs of the business. That is, are the workers needed by the business available in the area? What are the differences in wages between workers in one area versus another? The answers to these questions often play a crucial role in the decision-making process for business evaluating location decisions. This section demonstrates how this type of analysis can be done using the IMPLAN application and the Occupation Data within it.

As an example, let’s consider a financial consulting firm that wants to expand its operations into North Carolina. The firm is considering Charlotte, Raleigh, and Asheville as possible locations. They would like to know how many Accountants, Actuaries, Bookkeepers, and Financial Analysts are in each of those areas and how much each makes on average.

Charlotte is located in Mecklenburg County, Raleigh is in Wake County, and Asheville is in Buncombe County, so we’ll use those three counties as the Regions for this analysis.

The Occupation Codes for each of the interested jobs are in the table below (broad categories).

Occupation Common Name	SOC Code	SOC Code Description
Accountants	13-2010	Accountants and Auditors
Actuaries	15-2010	Actuaries
Bookkeepers	43-3030	Bookkeeping, Accounting, and Auditing Clerks
Financial Analysts	13-2050	Financial Analysts and Advisors

For each of these Occupations, the firm would like to know the number of wage and salary employees, the annual take-home wages, and the location quotient in each of three identified counties. This will help them understand how each of the proposed laborsheds are prepared to accommodate the needs of the firm. Using the data in Region Details on the Regions screen, we can gather the data requested and display it in the tables below.

Buncombe County
Occupation	Location Quotient	Wage and Salary Employment	Average Wage and Salary Income
Financial Analysts and Advisors	0.64	380	$109,403.72
Bookkeeping, Accounting, and Auditing Clerks	0.94	1,431	$36,831.00
Actuaries	0.42	8	$98,672.70
Accountants and Auditors	0.86	1,048	$67,457.31

Mecklenburg County
Occupation	Location Quotient	Wage and Salary Employment	Average Wage and Salary Income
Financial Analysts and Advisors	2.10	6,608	$179,280.94
Bookkeeping, Accounting, and Auditing Clerks	1.21	9,752	$57,625.92
Actuaries	1.75	175	$165,185.81
Accountants and Auditors	1.40	9,078	$113,093.86

Wake County
Occupation	Location Quotient	Wage and Salary Employment	Average Wage and Salary Income
Financial Analysts and Advisors	1.06	2,696	$135,293.58
Bookkeeping, Accounting, and Auditing Clerks	1.05	6,848	$48,785.09
Actuaries	1.18	95	$153,844.24
Accountants and Auditors	1.16	6,089	$92,513.26

From these data, the firm can see that there simply aren’t enough of the workers they would need in Buncombe County and thus Asheville would not be a wise place to locate. However, both Mecklenburg and Wake Counties have Location Quotients above 1.00, implying that these occupations are more available in these counties than the U.S. average. That means both counties are generally well stocked with the workers this firm would need.

Further, between Mecklenburg and Wake Counties there is a trade off to consider. Mecklenburg County has more employees in every relevant occupation than does Wake County. However, those workers all earn more income in Mecklenburg County, implying that labor costs of the firm would be higher in Mecklenburg County than costs for the same amount of workers in Wake County. The firm will now have to decide whether the increased availability of workers in Mecklenburg are worth the projected increased costs.

This type of analysis provides the firm with data upon which to make sound planning decisions about where the new operation should be located.

Watch the primer exercise video, expanding upon this use case.