Job losses have been severe over the last several years throughout Colorado, a state that typically outperforms the rest of the US during economic downturns. Even the Denver-Aurora metropolitan area—with its strong mix of industries and well-educated workforce—has felt the impact of the recession.
Leaders at Arapahoe/Douglas Works!—a regional workforce board in suburban Denver—began wondering during the heart of the recession if there was a better way to measure the state of the labor market than the standard unemployment rate. Their research led to the development of an “occupational saturation rate,” a metric recognized by the Colorado Department of Labor and Employment and the Rocky Mountain Workforce Development Association as a 2010 Best Practice.
Workforce Economist Pat Holwell and Joe Barela, ADW’s Division Manager, used internal state data and EMSI’s complete employment dataset—which includes contract and self-employed workers, or those not covered in the Bureau of Labor Statistics’ standard employment data—to come up with the “shadow employment” measure. The goal, Holwell says, is to glean more informed, real-time insight into local employment patterns.
“Specifically we wanted to know which occupations were glutted and which were not so we could get better return on public investment from our WIA Individual Training Accounts.”
Here’s how the simple measurement works: Holwell and Barela pull the latest data by occupation from EMSI for the Denver-Aurora MSA and the number of unemployed people registered in the statewide Wagner-Peyser and WIA database, also sorted by occupation code (SOCs). The unemployed people in each occupation are then divided by the total employed in that occupation (again, using EMSI data), which creates the occupation saturation rate (OSR).
As of March, the Denver-Aurora MSA had a saturation rate of 13.95%, compared to an official 8.4% unemployment rate.
Holwell says the saturation rate is useful in several ways to Arapahoe/Douglas Works!, primarily in that it “can give us a snapshot of how the local labor market’s really doing.” It also helps ADW “determine ‘unlikely to return’ eligibility status for dislocated workers entering WIA, and helps us do better ITA (Individual Training Account) staffings.”
The saturation metric is just one example of why ADW values EMSI’s complete employment data. Currently Holwell is conducting a study on the trend away from “traditional W-2 (form) type jobs to contract type jobs” across various industries in the workforce board’s region.
Because EMSI incorporates contractors and the self-employed (proprietors) into its data, Holwell knows he’s getting a fuller picture of what’s taking place in Arapahoe and Douglas Counties and the surrounding area. Regarding the yet-to-be-completed W-2/contract worker study, Holwell says, “I’m getting some pretty enlightening results and have already alerted our senior leaders and WIB members who interact with policy makers, because any rewrite of WIA definitely needs to take this into account.”