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Performance Webinar #3

Focusing on Average Earnings


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Background

 Three Performance Management Conferences


held in February/March, 2006 focused on revised
performance and reporting policies
 Follow-up from conferences included requests
for performance-related webinars around specific
topic areas
 Today’s webinar is the third in a series of 6
webinars hosted by ETA Performance
Specialists

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Future planned webinars

 September, 2006 – VETS


Performance/Reporting Issues
 October, 2006 – Certificates and Training for
Adults and Dislocated Workers

November, 2006 – Innovative Practices to
Improve State Performance
 December, 2006 – Open for suggestions
(send to ETAperforms@dol.gov)

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Webinar Outline

 Brief History of Earnings Outcomes


 Training and Employment Guidance Letters (TEGL):
 7-99
 15-03
 28-04
 17-05
 Data Sources
 National Results
 Analyzing Outcomes
 Lower Living Standard Income Level (LLSIL)
 Subject Matter Experts:
 BLS Quarterly Census of Employment and Wages (QCEW)
 New York State (Average Earnings’ Forecasting Model)
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Our Speakers . . .

Ron Fionte

Branch Chief, Bureau of Labor and Statistics
(BLS)

Bill Meehan
 Principal Economist, Division of Research
and Statistics, New York State

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History of Earnings Outcomes

 TEGL 7-99
 Average Earnings Change (Adult, Older Youth)
 Earnings Replacement Rate (DW, TAA, NEG)
 Effective 7/1/2000. Rescinded by TEGL 17-05
 TEGL 15-03
 Earnings Increase 1 & 2 (Adult, Older Youth, DW, TAA,
VETS)
 Never fully implemented. Rescinded by TEGL 28-04
 TEGL 28-04

Six Months Earnings Increase (Adult, DW, TAA, Wagner-
Peyser, VETS)

Effective 7/1/2005. Rescinded by TEGL 17-05

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TEGL 17-05

Average Earnings (Adult, DW, NEG, TAA,


Wagner-Peyser, VETS)
Of those who are employed in the 1st, 2nd and 3rd
quarters after the exit quarter:
Total earnings in the second quarter plus total
earnings in the third quarter after the exit quarter
divided by the number of participants who exit
during the quarter.

Effective Date: 07/01/2006 9


TEGL 17-05 Older Youth

Earnings Change:
Older Youth

Of those who are employed in the 1st quarter after the exit quarter and
who are either not enrolled in post-secondary education or advanced
training / advanced training-occupational skills training in the 3rd
quarter after the exit quarter or are employed in the 3rd quarter after the
exit quarter:
[Total post-program earnings [earnings in quarter 2 + quarter 3 after exit]
minus pre-program earnings [earnings in quarter 2 + quarter 3 prior to
participation] divided by the number of older youth participants who exit
during the quarter.

Effective Date: 07/01/2006

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Data Sources

 Wage Records
 UI Wage Records
 Additional Wage Record Data Sources:
 Automated Record Matching / Data Sharing
Systems (WRIS and FEDES)
 OPM, USPS, US DoD, Railroad Retirement
System, State New Hires Registry and State
Department of Revenue or Tax
 Supplemental Sources (only for grantees
that do not have access to wage records,
e.g. NFJP, SCSEP, INAP)

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UI Wage Records

 Primary data source


 Includes private sector and non-profit
sector
 Also includes government employer wage
reports:
 State
 Local
 Judicial, and

Public School

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Additional Wage Record Data Source:
WRIS & FEDES
WRIS (Wage Record Interchange System)
 Created to facilitate the interstate exchange of
UI wage data
 50 states participating

FEDES (Federal Employment Data Exchange


System)
 Focused on providing access to employment
records maintained by the following agencies:
 Office of Personnel Management (OPM)
 Department of Defense (DOD) and
 United States Postal Service (USPS)
 29 states participating
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From Data Sources to
Benchmarks

 Wage data are collected, compiled and


compared to established benchmark standards
for purposes of data analysis

 Two primary data sets used for establishing


benchmark standards for purposes of analysis
are:

Lower Living Standard Income Level (LLSIL)

Quarterly Census of Employment & Wages
(QCEW)

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Lower Living Standard Income Level
(LLSIL)

 Data and methodology:


 Based on the 1981 lower living family budget (BLS)
 BLS still provides data to ETA which publishes the
LLSIL
 Uses the “Poverty Guidelines” issued by HHS
 Annual updates based partially on the Consumer Price
Index for All Urban Consumers (CPI-U)
 Data are presented by geographic region and for 23
selected Metropolitan Statistical Areas (MSA)

NOTE: This data should not be used for statistical purposes due to the nature of
the base calculation which has not been updated since 1981.

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Lower Living Standard Income Level
(LLSIL)

 Program uses:
 70% LLSIL used by WIA to define:

 low income individual


 disadvantaged youth
 disadvantaged adult
 Used in eligibility determinations under Work
Opportunity Tax Credit (WOTC)
 Since the 70% LLSIL is used as an eligibility
gateway to services under WIA Adult, the
average earnings outcome should approach
or exceed the one-half the 70% LLSIL rate

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National Results

Average 6-Month Earnings

$25,000

$20,000

$15,000

$10,000

$5,000

$0
2002 2003 2004
Program Year

WIA Adult WIA DW

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National Results

Average 6-Month Earnings

$25,000

$20,000

$15,000

$10,000

$5,000

$0
2002 2003 2004
Program Year

WIA Adult WIA DW LLSIL70%

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National Results

Average 6-Month Earnings

$25,000

$20,000

$15,000

$10,000

$5,000

$0
2002 2003 2004
Program Year

WIA Adult WIA DW QCEW LLSIL70%

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Quarterly Census of Employment
and Wages (QCEW)

Ron Fionte
Branch Chief
Bureau of Labor Statistics (BLS)
(617) 565-2335
fionte.ronald@bls.gov

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The Quarterly Census of Employment
and Wages Program: What is it?

 A quarterly census of employers


covered under Unemployment
Insurance Tax laws, and Federal
employers covered under
Unemployment Compensation for
Federal Employees.

 not a sample

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QCEW Output:
Macrodata & Microdata

Macrodata Output:

Published data summed by location,
industry and ownership
 Number of establishments, monthly
employment, and quarterly wages

Summed by geographical area, industry
(NAICS) code and ownership

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QCEW Output:
Macrodata & Microdata

Microdata Output:

Confidential establishment level data;
generally for internal use only
 Sample frame for establishment surveys
 Geocode-able, providing a detailed
mapping reference

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Macrodata Output: Employment

 All workers covered by UI laws and on


the payroll as of the pay period
including the 12th of the month.
 Includes full and part time and those on
paid leave. Does not include those on
unpaid leave.
 Published 3 ways: Monthly per quarter,
quarterly averages, annual averages.
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Macrodata Output:
Total Quarterly Wages

 Total amount paid to covered workers


during the quarter, regardless of when
the services were performed.
 Bonuses, overtime, and severance pay
are included.
 Possible that wages are counted for
workers not included in employment
total (if they never worked in a pay
period including the 12th)
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QCEW Program Macrodata:
What’s it used for?

•Provides detailed industry employment and


wages data down to the county level*.
•As a benchmark for other BLS programs.
•Input to Bureau of Economic Analysis’
(BEA) Personal Income and Gross Domestic
Product statistics.
•Input to other BLS programs: LAUS, MLS.
*subject to confidentiality restrictions
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Uses of QCEW, Quarterly Census of
Employment and Wages Data
Local Economic Development
Current Employment
Indicators
• Clusters Analysis Statistics
• Shift Share Gross Domestic Product (BEA)
Occupational
• Industry Diversity Indexes
• Location Quotients Personal Income (BEA) Employment Statistics

Minimum Wage Studies State Revenue Projections Occupational Safety


and Health Statistics
Economic Forecasting
Quarterly Press Releases,
Annual Employment and Wages Jobs Openings & Labor
General Economic Uses Turnover Survey
Job Creation/Destruction
•Size Class Dynamics Benchmarking
•Business Survival Rates (Employment Base)

Geocoded Establishments Analytical QCEW


Uses Sampling
Interagency Data Uses Data
• Improve CPS After 2000 Census Industrial Price Program
• LEHD
• Industry Code Sharing
National Compensation Survey
Programmatic Uses
Local Government Services
Planning UI Tax Rate & Actuarial Current Employment
Analysis Statistics
Local Economic Impact
Response Planning UI-Covered Employment
Occupational Employment Statistics
Local Area Unemployment
Local Transportation Planning
Mass Layoff Statistics Occupational Safety and Health
Federal Funds Allocation Statistics
$175 Billion
(HUD, USDA, HCFA/CHIP) Job Openings & Labor Turnover
Survey 27
Pre- vs. Post-Program
Earnings’ Analysis

Bill Meehan
Principal Economist
Division of Research and Statistics,
New York State Department of Labor
(518) 457-1300
us0bpm@labor.state.ny.us

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How Pre-Program Earnings
Relate to Post-Program Earnings
 Pre-program earnings can be a predictor
of post-program earnings. In general:
 The higher the pre-program earnings of a
group of participants, the higher the post-
program earnings
 The lower the pre-program earnings of a
group of participants, the lower the post-
program earnings

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How Much Higher; How Much
Lower?
 In the Adult program in PY 2005 in New
York State:

A 1 dollar change in pre-program earnings
resulted in:
 a 50 cent change in post-program earnings
 In the Dislocated Worker program in PY
2005 in New York State:
 A 1 dollar change in pre-program earnings
resulted in:
 a 30 cent change in post-program earnings

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How Was the Relationship
Determined?
 Simple observation of an apparent
relationship between pre- and post-
program earnings
 Relationship was recognized under JTPA
 The 30 cent and 50 cent relationships
were determined using a regression
analysis with pre-program earnings as the
independent variable and post-program
earnings as the dependent variable

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How strong is the relationship between
pre- and post-program earnings?

 The magnitude of the relationship (50 cents for


Adults and 30 cents for DWs) was strongest in
the middle earnings range of pre-program
earnings
 Not as strong in the low end
 individuals with no pre-program earnings had much
higher post-program earnings
 Or in the high end
 an increase in earnings in the higher range of the pre-
program earnings ($15,000+) leads to an increase in
post-program earnings, but not as much of an
increase as in the lower pre-program earnings range

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Pre- and Post-program Earnings in
Recent Years in New York State --
Adults
AVERAGE PRE AND POST PROGRAM EARNINGS

PY2005 Qtr 31 PY 2004 PY 2003

Average Average Average Average


Pre-Program Average Average Pre Post Pre Post
Earnings Pre Program Post Program Program Program Program Program
Range Individuals Earnings Earnings Individuals Earnings Earnings Individuals Earnings Earnings

TOTAL 18,028 $ 6,905 $ 11,462 19,812 $ 7,125 $ 11,493 27,087 $ 6,367 $ 10,812

$0 4,841 $ - $ 9,428 5,183 $ - $ 9,885 7,738 $ - $ 9,057

$1-$2,500 2,710 $ 1,140 $ 8,343 2,786 $ 1,152 $ 7,975 4,128 $ 1,135 $ 7,766

$2,501-$5,000 2,151 $ 3,707 $ 8,594 2,261 $ 3,739 $ 8,713 3,361 $ 3,708 $ 8,294

$5,001-$7,500 1,761 $ 6,231 $ 9,891 2,087 $ 6,214 $ 9,658 2,747 $ 6,191 $ 9,343

$7,500-$10,000 1,561 $ 8,720 $ 10,975 1,856 $ 8,726 $ 10,912 2,327 $ 8,711 $ 10,626

$10,001-$15,000 2,296 $ 12,326 $ 13,320 2,615 $ 12,348 $ 12,969 3,238 $ 12,306 $ 13,023

> $15,000 2,708 $ 22,352 $ 20,226 3,024 $ 22,505 $ 19,919 3,548 $ 22,036 $ 19,810

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Source: PY 2005 Qtr 3 WIASRD. Includes exiters from 4/1/2004 to 3/31/2005

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General Performance Issues

QUESTIONS?
ETAPerforms@dol.gov

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