Recent Industry Reclassifications Have Major Impact on Analysis in Health Care, Finance Sectors

In the first quarter of 2013, many establishments that provide home care for the elderly were reclassified from NAICS 814110 (private households) to 624120 (services for the elderly). This reclassification, while appropriate according to the BLS, may cause problems for anyone analyzing the health care industry, especially in the regions that were most affected.

Supply Chain Mapping Can Highlight Opportunities to Grow an Economy

Chmura’s economists have been working with local communities for nearly a decade to understand the sources of their local competitiveness and strengths of their key industrial clusters. Several techniques exist for this type of analysis and one commonly utilized component is to examine an area’s key clusters for missing links in the supply chain. Many times this helps for marketing campaigns or economic gardening efforts in order to attract firms or spur entrepreneurial activity to address these gaps and augment and strengthen an existing industry cluster. In many cases, the search for supply chain gaps utilizes national models of what an industry and its many sub-industries have in common. Where additional data are available or can be collected, an alternative methodology can be used for much greater specificity, particularly when the local industry cluster has very specific suppliers or itself is part of a very complex value-chain from start to finish. Always looking to innovate, Chmura has produced a unique way to map the actual supply chain of industry clusters utilizing cutting edge network analysis. The results speak for themselves in an unprecedented, granular look at economic leakages, supply chain gaps, and cluster synergies. 

Supply Chain Mapping

Wage Pressure Index Spotlights Hot Job Markets

More and more over the past year, as companies have begun researching expansion initiatives or re-shoring opportunities, Chmura has been asked to provide guidance as to the availability and cost effectiveness of workers in a given area. Many times these industry executives or their site selection consultants have asked Chmura not only to assess the current supply and cost of qualified workers—a task readily accomplished via several analytics in JobsEQ®—but also to compare regions across the country in terms of potential wage pressure by industry or occupation. Companies want to know that they are expanding or relocating into an area with ample supply of qualified workers, but are wary of markets where they could face rapidly increasing labor costs.

Chmura’s economists responded to these requests by utilizing several proprietary features of JobsEQ® to create a wage pressure index that can provide an indicator between two cities or regions, indicating which is likely to experience faster wage growth in a given occupation over the next 2-4 years. Chmura’s wage pressure index combines actual 5-year (historic) wage growth in an occupation or industry with an imputation of the unemployment rate for an occupation (or group of occupations if we are estimating the wage pressure for an industry). These two factors are combined with long-term projections regarding the expected surplus or deficit of a given occupation (or a group of occupations for an industry analysis) and the 10-year employment growth forecast for the city or region. Chmura’s economists then compared these four factors to a national level norm to provide a composite index that is a valid predictor of latent wage pressure in a given city or region for a specific occupation or industry.

Currently, Chmura’s economists are computing the index on an ad-hoc basis for our clients while preparing the method for implementation into JobsEQ® by the end of 2012. To help illustrate the value of this analytic, we have calculated the wage pressure index for software application developers (SOC 15-1132) across the 50 largest US metropolitan statistical areas. The results are quite interesting. Several midwestern and southern MSAs score as having very low wage pressure while many western and southwestern metros, despite having relatively low wages for this position, are likely to see continued high wage appreciation over the next several years. Interestingly, most of the traditional IT hotspots in California and Boston score in the middle of the pack in terms of wage pressure. Texas metros run the gamut with Dallas being one of the MSAs with the lowest wage pressure and San Antonio being one of the highest, with Austin and Houston ranking in the middle. This is analysis is simply an example of the analytic and Chmura strongly feels that this tool is best used at the industry level or for a group of key occupations analyzed together—such as all IT jobs—in order to inform an actual expansion or relocation decision.

Chmura Wage Pressure Index


MSAWage ChangeGapGrowthUnempl
Phoenix-Mesa-Glendale, AZ MSA Up Up Up Up
Oklahoma City, OK MSA Up Up Up Up
Salt Lake City, UT MSA Up Up Up Up
Orlando-Kissimmee-Sanford, FL MSA Up Up Up Up
San Antonio-New Braunfels, TX MSA Up Up Up Up
Washington-Arlington-Alexandria, DC-VA-MD-WV MSA Up Up Up Up
Los Angeles-Long Beach-Santa Ana, CA MSA Up Up Up Up
Cleveland-Elyria-Mentor, OH MSA Up Up Up Up
Memphis, TN-MS-AR MSA Up Up Up Up
Chicago-Joliet-Naperville, IL-IN-WI MSA Up Up Up Up
St. Louis, MO-IL MSA Up Up Up Up
Milwaukee-Waukesha-West Allis, WI MSA Up Up Up Up
Detroit-Warren-Livonia, MI MSA Up Up Up Up

Using Forecasts to Further Policy Insight

Chmura's models and analytics, which form the backbone of our flagship product, JobsEQ, were recently utilized by a leading public policy think-tank, America's Edge, to highlight the skills gap that exists in California and Illinois. In part, through the use of forecasts of occupational supply and demand contained in JobsEQ, America's Edge was able to empirically demonstrate the skills-gap that exists in these states, particularly at the mezzanine level (jobs requiring some post-secondary training but less than a full bachelor's degree) of education. There was also a pronounced shortage of workers with Science, Technology, Engineering, and Math (STEM) skill-sets, which will increasingly be important to these economies as STEM-related jobs are growing faster than overall job growth.

For instance, utilizing Chmura's JobsEQ America's Edge found that in Los Angeles high-skilled jobs are projected to grow at roughly twice the rate of low-skilled jobs between 2010 and 2020, and that roughly 60 percent of the fastest growing occupations over the next 10 years will be jobs that require an education foundation in STEM. Based on this, they found that LA County has an undersupply of at least 81,000 high and middle-skilled workers. Similarly Illinois' job growth is highly skewed toward jobs that are either highly skilled (bachelor's degree or above) or middle-skilled (associate's degree, vocational degree or professional accreditation.) In Illinois the highest-skilled jobs are expected to grow at more than four times the rate of the lowest-skilled jobs. The Chicago Metropolitan Area has a projected deficit of over 90,000 middle-skilled workers alone.

The full reports for California (June) and Illinois (May) can be found at America's Edge website:

America's Edges research conforms to independent research that Chmura conducted with National Association of Manufacturers, which found a pronounced skill bias in the manufacturing sector. Changes in technology relating to automation of processes and utilizing advance composite materials over the past decade have greatly increased the need for high skilled technicians and tradesmen while simultaneously reducing the need for low-skilled assembly and material moving positions. In almost every sector of the economy jobs requiring more skills, particularly STEM skills, command the higher wages and provide greater job security.

Even though this last recession has hit all workers, regardless of education, very hard, education is still the best avenue to securing higher wages. STEM-related occupations also command a premium across the country as well as in the states of Illinois and California.

Average Annual Wage by Education Level (2011)