A Satellite Account to Measure the Retail Transformation Organizational, Conceptual, and Data Foundations (2021) / Chapter Skim
Currently Skimming:
3 Measuring Retail Employment and Labor Productivity
3 Measuring Retail Employment and Labor Productivity
Pages 29-72
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 29... ...
The sixth session discussed improvements in the mea surement of retail trade productivity that might be gained using microdata from the statistical agencies. Beyond those three sessions, the workshop's 29
|
From page 30... ...
, sectoral output1 (gross output minus all inputs originating from firms within the industry being measured) , or value added (gross output minus the value of all inputs originating as the output of other firms)
|
From page 31... ...
economic surveys at time t plus revenue from the Census Bureau's Nonemployer Statistics at time t. DOt = Ot/Dt where Dt is a deflator (or price index)
|
From page 32... ...
The statement of task for the project asks about the creation of a satellite account that could address a "retail-related" sector that would go beyond the businesses included in retail alone. This section first considers how the definition of industries in economic data affects the ability to identify a retail-related sector.
|
From page 33... ...
Each statisti cal agency implements the classification of business establishments based on its own available data.c The major NAICS designations of interest to this project are these three sec tors: retail trade (NAICS 44-45) , wholesale trade (NAICS 42)
|
From page 34... ...
The 1992 Economic Census, the last such census that relied solely on SIC classifications, showed more than 840,000 auxiliary employees assigned to retail trade out of a total of 18 million retail trade employees. Also in 1992, BLS payroll data showed 13 million retail trade employees.
|
From page 35... ...
Each statistical agency independently uses NAICS guidelines to classify establishments into industries on the basis of their primary activity, as measured in that agency's data, and updates that classification on its own agency schedule. Generally, for an establishment engaging in more than one activity, the entire employment of the establishment is included under the industry indicated by the primary activity.5 Because business registers rely on different underlying source data, the Census Bureau and BLS may assign the same establishment to different industries or record the establishment with a different employment level.
|
From page 36... ...
. Data used for classification and designation are maintained in the Census Bureau's Business Register.
|
From page 37... ...
context, due to laws that restrict the sharing of individually identifiable information, even across federal statistical agencies. As a result, the two agencies that provide data related to business output and employment, the Census Bureau and BLS, each develop their own address lists and classifications of business establishments, with limited ability to share and compare them.7 6 See https://www.census.gov/programs-surveys/susb/technical-documentation/methodology.
|
From page 38... ...
[The] Census Bureau uses those data to create the Census Business Register; however, BLS does not currently have access to those data and so has to base its frame on a different source.
|
From page 39... ...
EIN applications filed with the IRS and processed by the Social Security Administration are shared with the Census Bureau on a monthly basis and provide NAICS codes for new businesses.10 The Business Register is updated with information from the IRS, the Economic Censuses, the Company Organization Survey (see Box 3-8) , the Census Bureau's Business and Professional Classification Survey, and the Annual Survey of Manufacturers (but no other annual economic surveys)
|
From page 40... ...
One of the challenges encountered in making comparisons at the sectoral level was that in 2001, BLS data were classified based on 2002 NAICS codes, while Census data were classified based on 1997 NAICS codes. The sectors impacted most by this difference were retail trade (NAICS 44-45)
|
From page 41... ...
Impact of Differences Even when the concepts being measured are the same, some differences will emerge in the estimates by the two agencies due to their separate sources of data, separate processes for maintaining business registers, and the fact that different classifications may be assigned to the same enterprise by the two agencies. See Tables 3-1a and 3-1b for a comparison of the number of establishments and the number of employees estimated to fall under different NAICS codes as measured by three programs: the Economic C ensus (under the Census Bureau)
|
From page 42... ...
/ EC EC) / EC 42 Wholesale trade 408,333 409,656 612,359 0.3% 33.3% 44-45 Retail trade 1,064,087 1,064,449 1,042,096 0.0% –2.1% 48-49 Transportation 237,095 237,308 242,932 0.1% 2.4% and warehousing 481 Air 4,450 4,441 5,784 –0.2% 23.1% transportation 483 Water 1,643 1,668 2,063 1.5% 20.4% transportation 484 Truck 126,803 126,986 127,366 0.1% 0.4% transportation 492 Couriers and 14,467 14,359 17,407 –0.7% 16.9% messengers 493 Warehousing 16,956 16,901 17,389 –0.3% 2.5% and storage TABLE 3-1b Comparison of the Estimated Number of Employees by NAICS Codes, as Measured by Three Programs Statistics Quarterly Percent Percent Economic of US Census of Difference Difference NAICS Census Businesses Employers (SUSB – (QCEW – Description (EC)
|
From page 43... ...
It would be beneficial to be able to quantify all of the activity under firm IDs that have some establishments classified as retail and for which linking BLS and Census firm and establishment data might help in iden tifying retail-related auxiliaries in BLS data, for example, something that is not currently possible. This has the potential for helping in the development of a satellite account on activities supporting retail trade.
|
From page 44... ...
Between these two concepts, the gross margin measure removes the wholesale cost of the product, which reflects the value related to its design and manufacture, but includes the value added by other factors besides the retailer's own labor and capital, such as the value provided by leasing a store or paid to another vendor who handles customer service. Strictly speaking, the value-added measure of output is the one that is associated with the services provided by the retailer that derive from the 12 Email from Jenny Rudd, BLS October 21, 2020: "In most cases the sectoral output of a service industry nearly equals the gross output of the industry.
|
From page 45... ...
Gross margins, while useful, are not a pure measure of trade industry output or productivity, because like gross sales for other industries, they still contain double counting for other intermediate inputs, like energy and purchased services. The appropriate measure of the unduplicated output of any industry is value added, measured as gross sales less all intermediate inputs (or the sum of labor compen sation, profits, proprietor's income, and rents and other capital income)
|
From page 46... ...
Figure 2-1 also shows that sales revenue for the retail sector overall grew faster than gross margin, which in turn grew faster than value-added. Given the relationships between these measures, these inequalities imply that the cost of goods sold grew faster than the gross margin, and that the contribution of other purchased factors grew faster than the value added by retailers' own labor and capital.
|
From page 47... ...
The Census Bureau's Monthly, Quarterly, and Annual Economic Surveys The Monthly Retail Trade Survey and Advance Monthly Retail Trade Survey collect sales data from a sample of retail firms14 that report for their retail establishments. Data from the former are published within 50 days of the close of the reference month, while data from the latter are published 14 We use the term "firm" to distinguish a group of establishments within an enterprise, all of which are either classified in (say)
|
From page 48... ...
This implies that gross margins at the product-group level are never directly measured but only inferred by combining this disparate 15 To create the sampling frame for the Monthly Retail Trade Survey and ARTS (same approach used for the Monthly Wholesale Trade Survey and AWTS) all employer establishments located in the United States and classified in the retail trade and accommodation and foot-services sectors are sorted by EINs or firm identifiers.
|
From page 49... ...
When released: About 14 months after close of reference year. Variables: Sales, e-commerce sales, end-of-year inventories, purchases, gross margins, total operating expenses, and commissions.
|
From page 50... ...
If enterprises do not provide this detail, their allocation to an industry category is based on administrative data and the Economic Censuses. The Census Bureau's Economic Census and Related Surveys As illustrated in Box 3-6, the Economic Census provides measures of gross sales, payroll, first quarter payroll, and number of employees every 5 years.
|
From page 51... ...
available for these tabulations.17 In addition, while ARTS collects information on gross margins, the Census for Retail Trade does not, which makes combining information from that census and ARTS more complicated. A 17 This discussion is related to the construction of the input-output accounts by BEA.
|
From page 52... ...
Margin prices on different products and by outlet type vary, but the changing product mix and outlet type are not well captured in the annual, quarterly, and monthly surveys of retail trade activity. Auxiliaries The Economic Census collects information on auxiliaries, also called enterprise support establishments, for six industries in the services sector: NAICS 48-49 (Transportation and Warehousing)
|
From page 53... ...
CONCLUSION 3-7: Data available from the Economic Census and the Economic Surveys for the retail trade-related industries limit the ability to estimate output for retail-related industries in important ways: • Purchase data are needed to compute gross margins, but the only purchase data for retail are collected on the Annual Retail Trade Survey (ARTS) , not the Economic Census.
|
From page 54... ...
54 TABLE 3-2 Number of Auxiliary Establishments That Supported Retail Trade, 2012 Economic Census NAICS Code of Auxiliary 48 51 54 55 56 81 NAICS Served Title # Est # Est # Est # Est # Est # Est 44-45 Retail trade 3,296 53 224 10,222 238 316 441 Motor vehicle and parts dealers 197 0 8 492 6 16 442 Furniture and home furnishings stores 506 2 49 357 7 5 443 Electronics and appliance stores 92 17 10 407 41 19 444 Building material, garden equipment and supplies dealers 191 3 7 460 13 4 445 Food and beverage stores 710 4 10 950 6 4 446 Health and personal care stores 129 3 5 966 12 2 447 Gasoline stations 65 11 7 845 4 6 448 Clothing and clothing accessories stores 254 3 40 1,717 9 161 451 Sporting goods, hobby, book, and music stores 111 0 1 553 8 6 452 General merchandise stores 594 8 43 2,447 30 80 453 Miscellaneous store retailers 266 1 25 579 72 5 454 Nonstore retailers 181 1 19 449 30 8 Percentage of total 23.0 0.4 1.6 71.2 1.7 2.2 NOTES: Data on auxiliaries in 2017 Economic Census not available until September 2021.
|
From page 55... ...
Operating expenses for retail and wholesale trade establishments are collected as an aggregate of an enterprise's establishments on ARTS22 and Annual Wholesale Trade Survey once every 5 years during Economic Census years. Data on expenses are not col lected at the establishment level in the Economic Census.
|
From page 56... ...
In the context of retail trade, "quality" refers specifically to the quality of the retail services themselves -- not the quality of the products sold by retailers -- and relates to the kinds of shifts the retail sector has experienced over the past few decades. As discussed in the previous chapter, the recent changes in retail have introduced different kinds of retail outlets -- including warehouse stores, e-commerce, and large retailers -- that provide greater product variety and different ways of obtaining and learning about products.
|
From page 57... ...
Unfortunately, the model did not show a meaningful relationship between these indicators of the quality of retail services and the change in the margin prices. Despite this failure to use hedonic price techniques to explain retail service quality changes within individual retail outlets, hedonic techniques have significantly improved the measures of important product 25 Hedonic price indices analyze price changes for changing consumer products by estimating prices associated with each product's different characteristics.
|
From page 58... ...
However, that shift raises the challenge of estimating price indices when there are shifts in consumption across retail outlets, which is addressed in the next section. Outlet Substitution Bias As noted above, the techniques for estimating price indices for both retail products and services -- CPI and PPI, respectively -- use samples of product or margin prices for individual outlets that are combined using fixed weights across outlets.
|
From page 59... ...
(See the discussion below about private sector data sources.) The available transaction data are incomplete, with data from aggregators such as Nielsen, IRI, NPD, Affinity, and Palantir including aggregations from both scanners and credit cards but often missing key types of outlets, such as the warehouse clubs, supercenters, and e-commerce outlets of particular interest.30 A new data collection effort by the PPI division of BLS is collecting more detailed margin price data directly from large wholesale trade companies that would provide transaction-level data on a monthly basis electronically.31 If this approach proves workable, it could provide a model for expanding data collection in the retail sector in a way that is easier for large 29 Another solution to the problem of outlet substitution bias would involve estimating the consumer utility related to the different services that retailers offer.
|
From page 60... ...
The lack of the necessary quantity of information in regular reporting raises the question of understanding the size of the bias caused by outlet substitution.32 This in turn raises the question of quality adjustment, which was discussed in the previous section. In constructing the CPI and PPI margin price indices, quality needs to be controlled or adjusted within an individual retail outlet for the products or services sampled in that outlet.
|
From page 61... ...
, for items within each group, and for special categories, such as services. The CPI-U-RS is the primary deflator source for retail trade industry sales used by the BLS industry program to obtain its labor productivity measures.
|
From page 62... ...
Alternatively, advanced technology, such as automation or the use of scanner technology, may substitute for more skilled workers in some components of retail trade, so that there is declining labor quality. Obtaining hours of labor requires making adjustments to convert information on employment into hours worked.
|
From page 63... ...
Key variables: Employment and hours worked for supervisors, nonsupervisors, the self-employed, and unpaid family workers. Level of detail: A Census-defined industry coding system with 270 categories that maps to NAICS codes or aggregates of NAICS codes.
|
From page 64... ...
One challenge in implementing a broader retail satellite account is likely to be in allocating employment (or hours worked) into retail-related and nonretail-related for some NAICS codes.
|
From page 65... ...
The main purpose is to maintain the Census Bureau's Business Register. When released: For use within the Census Bureau.
|
From page 66... ...
BLS-BEA Integrated Industry-Level Production Account (KLEMS) During the panel's workshop, Jon Samuels (BEA)
|
From page 67... ...
The integrated industry-level production account decomposes growth in industry gross output into contributions from growth in intermediate inputs, capital, labor, and multifactor productivity. Similarly, the account decomposes growth in aggregate economy value added into the separate contributions from industries' growth in capital, labor, and multifactor productivity.
|
From page 68... ...
Private-Sector and Nonfederal Data The Census Bureau's Economic Surveys and Economic Census and BLS's statistical collections, some of which were described earlier in this chapter, form the building blocks of the federal economic statistics program. Because of their limitations, however, particularly concerning timeliness and granularity, these surveys and collections are being augmented with private-sector and alternative data sources.
|
From page 69... ...
The most extensive use he reported was undertaken as comparative research between the CPI and the scanner and associated household panel data from Nielsen. There are two types of scanner data available: data that originate from retail establishments (retail scanner data, such as InfoScan, IRI Worldwide)
|
From page 70... ...
use Nielsen Homescan data to investigate changes in consumer shopping over the last 15 years. Scanner data and credit card transactions data have the potential to improve price indices by adjusting for the long lags between incorporation of the Economic Census data into the Census Bureau's data program.
|
From page 71... ...
In most of these studies, the source data were purchased or use of the data was granted through agreements. Collaborations between the government and the larger Internet-related companies in private industry, many of which have assembled massive data sets, might fruitfully expand the data available for the study of the retail trade transformation.
|
From page 72... ...
CONCLUSION 3-13: A collaboration between the government and larger Internet-related private companies has the potential to vastly expand the types of data available to study the transformation in retail trade and may support detailed analysis by population subgroup. 44 See http://maryannfeldman.web.unc.edu/data-sources/longitudinal-databases/national- establishment-time-series-nets.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.