Using Projection Data and Methodology

Introduction

Occupational estimates and projections for Alaska are developed every other year. Projections, which currently cover the 2014-2024 period, are widely used for planning and preparation of educational and training programs, developing career information and studying long-range trends in occupational employment. The projections process consists of four principal phases:

  1. Employment from the Quarterly Census of Employment and Wages (QCEW) are used to determine the number of jobs for each industry during the base year (currently 2014) of the projection period. A forecast (currently for 2024) is made for each industry based on historical trends and expected changes in important economic indicators, Alaska and U.S. population and other industry-specific variables. Consideration is also given to knowledge of specific projects and observations of the current economic climate.
  2. In order to estimate base year employment for each occupation, the occupational “staffing pattern” of each industry must be determined. Most industries have a wide variety of occupations. The staffing pattern of an industry is the breakdown of each occupation’s share of the industry’s total employment (referred to as a “staffing ratio”). Employers in Alaska report the occupations of their workers when they submit their unemployment insurance quarterly contributions report. The reported occupations are the basis of Alaska’s Occupational Database (ODB). Analysis of the most recent three years of ODB data are used to calculate occupational staffing ratios for each industry.
  3. Each industry’s estimated base year employment is multiplied by the staffing ratio for each occupation. The results are then summed by each occupation to get the base year estimate. For the occupational projections, staffing ratios within an industry are adjusted using “change factors.” Change factors are multipliers that increase or decrease the occupation”s estimated share of industry employment based on factors other than an industry’s projected employment change. Examples are changes in industry product mix, technology or business practices. Each industry’s projected employment is then multiplied by the adjusted staffing ratio for each occupation. The results are then summed by each occupation to get the projection.
  4. Job openings for an occupation result from both job growth and replacement of workers that leave the occupation. An occupation’s growth openings are equal to its positive change over the projection period. Replacement openings are estimated from a combination of formulas derived from the U.S. Bureau of Labor Statistics (BLS) and an analysis of Alaska’s ODB data.

Important notes
  • Estimates and projections do not include self-employed workers, private household workers, most agriculture workers and fishermen and others who are not covered by the state’s unemployment insurance program.
  • For the purposes of the projections, certain types of public sector employment--education, hospitals, rail transportation, and U.S. Postal Service--are combined with employment in private sector industries.
  • Since the ODB does not include federal government workers, staffing ratios were developed using occupation data from public and private industries closely related to individual federal divisions or agencies. For example, for civilian employment from army commissaries, staffing patterns for Other General Merchandise Stores (NAICS 452900) was used. Anecdotal information or survey data was also used as available.

Definitions and concepts
  • Occupational Title and Code – The titles and codes are from the Standard Occupational Classification (SOC) Manual;
  • Employment – The number of workers estimated to be employed by occupation in the base year (currently 2012) and in the projected year (currently 2024);
  • Total openings – The total number of job openings expected in an occupation due to growth plus replacement need;
    • Growth openings – The openings in an occupation due to industry expansion and the consequent need for additional workers;
    • Replacement openings – The openings calculated by weighing the number of people exiting the occupation (e.g. retirement, career change, move out of state) against the number of people entering the occupation. This net measurement is best for quantifying how many new people are needed to enter a given occupation, and, if training is required, to identify its minimum training requirements.

      (Note: Individuals who change employers, but remain in the same occupation fall under the category of job turnover and are not included in this measure.)

Caution when using estimates and projections data

Occupational employment estimates should be interpreted as only an approximation of the true level of jobs. Occupational projections are based upon industrial projections models and past and current industrial and occupational trends. They serve to illustrate likely employment patterns and meaningful comparisons between occupations, but are not meant to invoke precision. The projection models do not take into account such factors as immigration, emergence of new occupations, changes in the geographic distribution of employment opportunities, and catastrophic events that would significantly alter the industrial structure of the economy or occupational staffing patterns.

To carry out occupational employment projections at the national level, BLS makes many assumptions regarding rates of replacement, future staffing pattern changes, population, personal income and industry employment growth. The 2014-2024 Alaska employment projections follow many of the same major assumptions used by the BLS.

There are a number of other key points to keep in mind when using occupational employment projections:

  • The occupational estimates and projections represent job positions, not the number of individuals employed;
  • Jobs data are based on a place-of-work concept, thus employees are counted in the geographic area in which their employer is located, not where the employee lives;
  • Projected employment data are annual averages, which may not accurately portray seasonal occupations in industries such as recreation and construction;
  • Occupational employment levels and estimated numbers of occupation openings are projected averages for a ten-year period and therefore cannot be attributed to a specific year.