Although it is not as well-known as the unemployment rate or the changes in nonfarm payroll jobs, Idaho’s Quarterly Census of Employment and Wages (QCEW) plays a key role in developing those reports.
The Idaho Department of Labor’s QCEW program is part of a nationwide operation funded by the U.S. Bureau of Labor Statistics. Its mission is to review the records Idaho employers provide with payment of their quarterly unemployment insurance taxes to ensure employers are coded into the right industry error-free. Once review and cleaning of the record is complete, it is uploaded into a database that contains the vast majority of Idaho’s employment which provides a detailed snapshot of Idaho’s labor market and economy.
In statistical terms, the QCEW program nearly captures the entire universe of employment. In Idaho, 94 percent of all employment and wages in the state is compiled into a database. Nationally, the data captured is around 96 percent of the total that is known to exist.
The small percentage of data that is not captured by QCEW is the result of employers who are exempted through federal or state law from paying unemployment insurance taxes. Examples of exempted employment include railroad workers, university and hospital internships and workers for religious organizations.
The Bureau of Labor Statistic’s samples for the Establishment Survey (where nonfarm estimates are derived by the Current Employment Statistics program) and the Occupational and Employment Survey (which provides information on the national and state landscape of occupations and their wages) are both derived from QCEW data. In addition, nonfarm estimates are corrected at the end of each year based on information from QCEW data through a process known as benchmarking. While the survey unemployment rate estimates are developed and operated by the Census Bureau, it also corrects these estimates at the end of each year based on information derived from QCEW.
While the strength of QCEW is the breadth of detail it provides for researching Idaho’s economy, its weakness is the time it takes to publish new data. Collection and processing of data is a long process that results in new information being published six-to-nine months after the fact. Another weakness is QCEW data can contain historical and classification shifts that cause the underlying industry and wage data to fluctuate in ways that do not necessarily represent an economic change.
Using QCEW information to benchmark the nonfarm payroll employment and unemployment rate requires that any invalid shifts that may exist in the data be resolved before being used to correct estimates. This benchmarking process is why there is an extended period between the release of December’s unemployment rate and January’s unemployment data. The data is typically not released until March when the results of the benchmark for the unemployment rate and nonfarm estimates are made public.
While QCEW sifts through sensitive and personal data, the confidentiality of the information is protected by law. Stakeholders can rest assured that we take the protection of confidential data seriously. The Bureau of Labor Statistics requires each analyst and technician to take annual training on handling confidential information. They are also required to sign agreements that state they understand infractions and breeches of the strict federal laws and rules which protect employer and employee data are subject to a $250,000 fine and six months in jail. The Idaho Department of Labor extends this arrangement further by requiring everyone in the agency’s Communications & Research Division to take confidentiality training and sign a confidentiality agreement.
“We take the privilege of serving as the administrator of Idaho’s cooperative agreement with the Bureau of Labor Statistics very seriously,” explains Deputy Director Georgia Smith. “Part of that agreement means we safeguard the data from misuse and unauthorized disclosure.”