Discussion of Potential Occupational Analysis Methodologies 1

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1 Discussion of Potential Occupational Analysis Methodologies 1 Note: Occupational analysis is only one of the potential Demand-side methodologies. That being said, below are three potential methodologies for performing such analysis. 1. U.S. Department of Labor, Bureau of Labor Statistics (BLS) methodology (18% bachelor s degree or higher in Florida) The Bureau of Labor Statistics (BLS) provides information about education and training requirements for hundreds of occupations. BLS uses a system to assign categories for entry-level education, related work experience, and typical on-the-job training to each occupation for which BLS publishes projections data. The assignments allow occupations to be grouped to create estimates of the education and training needs for the labor force as a whole and estimates of the outlook for occupations with various types of education and training needs. In addition, educational attainment data for each occupation are presented to show the level of education achieved by workers who are employed in the occupations. Category system BLS assigns occupations to a designation within three categories: typical entry-level education, related work experience, and typical on-the-job training. The categories and assignments within each are as follows: Typical entry level education represents the typical education level needed to enter an occupation. The assignments for this category are the following: Doctoral or professional degree Master's degree Bachelor's degree Associate's degree Postsecondary non-degree award Some college, no degree High school diploma or equivalent Less than high school Work experience in a related occupation indicates if work experience in a related occupation is commonly considered necessary by employers for entry into the occupation, or is a commonly accepted substitute for formal types of training. The assignments for this category are the following: More than 5 years 1-5 years 1 This document draws directly and extensively from materials published by the U.S. Department of Labor, Bureau of Labor Statistics, and the Georgetown University Center on Education and the Workforce. The Florida Department of Economic Opportunity, Labor Market Information program has also provided comments for this document. Thus, this document is a work in process, is for background information purposes only, and should not be reproduced or cited. Page 1 of 6

2 Less than 1 year None Typical on-the-job training indicates the typical on-the-job training needed to attain competency in the occupation. The assignments for this category are the following: Internship/residency Apprenticeship Long-term on-the-job training: more than 1 year Moderate-term on the job training: 1-12 months Short-term on-the-job training: 1 month or less None In some cases, assigning education and training categories can be straightforward. Some occupations, such as physicians and lawyers, are governed by federal and state laws and regulations that give clear guidelines, regarding the education or training required for a given occupation. In other cases, the choice of categories is less clear. BLS economists determine the typical path to entry for an occupation and apply it across all three categories. Multiple paths to entry are not captured by the classification system. For occupations with multiple paths to entry, the classification system captures the typical path, and the occupational profile narrative in the edition of the Occupational Outlook Handbook will give a full description of alternate paths in the How to Become One section. For example, the typical entry path for registered nurses is an associate s degree, with no work experience and no on-the-job training requirements. However, the Handbook profile will note that registered nurses can also obtain a bachelor s degree in nursing or a diploma from an approved nursing program. BLS economists assigned occupations to categories on the basis of analyses of qualitative and quantitative information. Sources of quantitative data include educational attainment data from the Census Bureau s American Community Survey (ACS) and data on education, work experience, and onthe-job training requirements from the Occupational Information Network (O*NET). In addition, economists evaluated qualitative information obtained from educators, employers, workers in the occupation, training experts, and representatives of professional and trade associations and unions. 2. American Community Survey (ACS) methodology (26% bachelor s degree or higher in Florida) The ACS collects demographic and employment information from about 3 million households annually and are based on the Census Bureau s microdata files. Education attainment data from the ACS present the percent distribution of workers currently employed in an occupation, broken down by their highest level of education attained, i.e., not necessarily the level of education required for the occupation. Proponents of such data assert that this methodology more accurately account for changes in requirements in existing occupational categories a phenomenon known as upskilling. Upskilling refers to situations in which the educational demands of an occupation increase over time. The argument is as follows: There has been an increase in educational demand in recent years, driven by a simple equation: more education leads to greater productivity. That, in turn, encourages employers to pay higher Page 2 of 6

3 wages to employees with more education, which provides incentive for students to get that education. From an employment demand perspective, the need for education is driven by two central trends: The mix of occupations in the economy has been shifting away from those that do not require substantial formal education. For instance, since 1900, Agriculture has gone from the single most important sector of the U.S. economy to one that today commands less than 3 percent of all employment. In the majority of occupations, skill requirements have increased over time and this is holding the specific occupation constant. For instance, the predominant image of the mechanic in 1960 was one of wrenches and greasy overalls. Today, the image has become one of a nearly sterile garage and car engines so complex that only computer technicians can tune them. The need for more formal skills for mechanics is reflected in the way the job title has evolved. In 1968, mechanics were officially designated as Mechanics and repairmen, Auto ; in 2007, mechanics were officially known as Auto service technicians and mechanics. In short, because the BLS assignment method focuses on the preferred or modal requirement for entering an occupation, it emphasizes where the occupation and the wages it pays are in the present, and downplays upskilling and wage trends that show where the occupation is headed. Limitations of ACS The ACS is a household survey and, thus, is dependent on self-reporting. (In contrast, when preparing its workforce estimates, Florida s Labor Market Information program uses a rigorous, controlled business survey process with rigorous data validation and employer follow-up -- that reaches 60,000 employers over a three-year period.) As a result of the ACS s survey process, errors in interpretation of the survey questions and coding errors may result in inaccurate responses. A likely example of response or coding errors can be seen in the physician and surgeon occupation. To practice medicine, physicians must attain a first professional degree among other requirements, as governed by state laws; however according to ACS data, 2 percent of physicians and surgeons had attained only a master s degree as their highest level of education. More egregious is the fact that ACS shows that nearly 5 percent of all Florida surgeons have a Bachelor s degree or less. This might well be within the 90 percent confidence interval of the point estimate, but relying on ACS for occupational data seems to produce less than perfect results. Occupational statistics in the ACS are coded under the Census Bureau s 2002 Census occupation classification system. Both the BLS category system and the BLS Occupational Employment Statistics (OES) data the source data for the National Employment Matrix, are coded based on the federal government s Standard Occupational Classification (SOC) system. Although the Census Bureau s system also is based on the SOC, it does not provide the same level of detail as the matrix. As a result, some detailed SOC occupations have the same educational attainment data, because they are combined in the Census Bureau s occupational classification system. Page 3 of 6

4 Regarding upskilling Here s the counter-argument While there is certainly some upskilling in the economy, ACS assumes that the presence of degree-holders in an occupation indicates the need for that degree -- this is questionable. For example, how might this assumption be thrown off by the college graduate who works as a waiter ( downskilling )? Or, consider that Enterprise Car Rental advertises that it hires more new college graduates than anybody else in U.S. Enterprise might do this to create a more professional environment for their clients, but, in terms of the skills required to do their job, any high school graduate would be qualified. (Hiring college graduates for their image, rather than their skills could be considered false upskilling. ) And with regards to the auto mechanic example -- To be sure, since 1971, it has become more important that an auto mechanic have strong reading skills, in order to read more complex manuals, to repair more complex vehicles. However, education beyond high school, except technical training, would not add much to the competency of an auto mechanic. Auto shops are not likely to turn away an otherwise well-trained mechanic because he/she did not go to college. 3. BLS-Florida Education Code (BLS-FEC) methodology (14% bachelor s degree or higher) Many, many years ago, a policy decision was made that, as part of the Workforce Estimating Conference process, Florida s Labor Market Information (LMI) program would use a modified BLS methodology using Florida-specific education codes instead of the national BLS taxonomy. (Due to the lost to history effect, the reasons for this are somewhat unclear but might be associated with a desire at the Department of Education to raise the profile of certain PSAV/AS training programs.) Regardless, the practical effect of using Florida-specific education codes is the suppression of the projected need for higher education within the state. More specifically, under the Florida system, workforce needs for employees with bachelor s and graduate degrees are projected to be significantly lower than if we use the national BLS taxonomy, and workforce needs for employees with associate and postsecondary vocational credentials are projected to be significantly higher than if we use the national BLS taxonomy. For example, regarding the category BLS Occupations Requiring a Bachelor's Degree with a Florida Education Code of Less than a Bachelor's, there are 47 occupations representing approximately 345,000 projected jobs in (See Appendix A.) Further, use of the BLS-FEC methodology is specific to Florida and would prevent benchmarking against other states or nations. Page 4 of 6

5 Why is This Important? For illustration purposes, consider the 2020 Workforce Estimating Conference forecast (although the numbers could be projected out to 2025) Given the current Florida economy, LMI projects that there will be 2,586,721 total job openings, cumulative for the period , with 1,563,802 openings due to replacement need (Baby Boomers retiring) and 1,022,919 openings due to industry growth. Based on the BLS-FEC methodology, 14% of those projected total job openings (362,000) will require a bachelor s degree or higher about 45,000 job openings annually. However, based on the ACS methodology, 26% of those projected total job openings (673,000) will be filled with workers with a bachelor s degree or higher about 84,000 job openings annually. And, based on the BLS methodology, 18% of those projected total job openings (466,000) will require a bachelor s degree or higher about 58,000 job openings annually. Those are big differences, especially if state policy makers are considering the official WEC estimate at 45,000 more degrees annually, it would appear that the historical trend line (128,000) might take care of necessary degrees. A second way these numbers could be used is as benchmarks against other states/nations. In other words, if Florida s degree attainment level is at X%, we might want to raise our level to match that of the nation or of a higher performing state(s). If so, the methodology used would affect that calculation. Page 5 of 6

6 Appendix A BLS Occupations Requiring a Bachelor's Degree with a Florida Education Code of Less than a Bachelor's Page 6 of 6

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