Payroll and employee compensation
I am reviewing some IMPLAN modeling done by a mining company. The mining company reports "personal income" that does not include employee benefits packages including health insurance and retirement packages. Is it possible to model payroll/employee compensation without the benefits that IMPLAN implicitly assumes (wage and salary, all benefits and employer paid payroll taxes)? In other words, to model the salary or hourly wage (over a year) paid to a person without the benefits and taxes?
My suspicion is that they did include the benefits and taxes but did not realize that they did. But it is quite possible that I am simply wrong.
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Yes, it is possible to do this. With a Labor Income Change Activity, the software will remove payroll taxes, social insurance taxes, commuters, personal taxes, and savings according to the rates reflected in the SAM for your region. The Household Income Change option is useful for when the income comes from some other non-labor source. With a Household Income Change, the software will not remove payroll taxes, social insurance taxes, or commuter spending, but will still remove personal taxes and savings. Finally, if you want to assume that households spend the entire amount (no taxes or savings), you can use a Household Spending Pattern (Activity Options > Import > Institution Spending Pattern). The software will "spend" the entire amount.0
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I am using analysis by parts to represent this mine. I would still like to be able to assign the same mining output (industry sales) in the specific sector (23) that they will be operating in to allow for the primary and secondary effects of that money to run through the local economy. Can I analyze the activities that I currently have, that represent the mine, along with the Labor Income Change? It seems that I would be double counting the effects of the employee spending on the local economy? I have perspective mining output and some local spending patterns from the mine. I would like to be able to compare the employee compensation that I generate, to theirs that does not include any benefits.0
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If you know Output and Employee Comepensation, you can just run the entire analysis as a single Industry Change Activity, editing the Event to reflect your known values. Unless you want to edit the industry's spending pattern, I don't see much reason to do analysis-by-parts. However, if you do decide to run the Labor Income Change Activity, then you are correct that running a separate Industry Change Activity would double-count the payroll impacts. In this case you could either: a. Edit the Industry Change Activity to zero out Employee Compensation and Proprietor Income. Then you can sum the impacts from this activity with the Labor Income Change activity. b. Instead of running and Industry Change Activity, import the industry's spending pattern (Activity Options > Import > Industry Spending Pattern) and set the Activity Level to your known Output value. Again, you can sum the impacts from this activity with the Labor Income Change activity (this is the standard analysis-by-parts approach).0
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I initially did run the event as an industry change activity to get an idea of what they may have changed to get the results that they presented. Since my results were not close to theirs I am forced to do an analysis by parts, with the limited purchasing data that they provided, to see if I can replicate their results. I could not just run the industry change activity because they explicitly stated that no benefits were included. So your suggestion (a) is a good start for the sector 23 part of the modeling. Thank you...0
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