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November 1982, Vol. 105, No. 11
Better measures of service employment
goal of Bureau survey redesign
Thomas J. Plewes
The problem of measuring economic activity in the growing service-producing sector of the economy has posed an acute and continuing challenge to those agencies responsible for providing economic data. The service sector is characterized by diverse activities loosely aggregated under the service-producing classification; by a large number of preponderantly small companies that enter and exit the market with some frequency; and, consequently, by a unique set of problems associated with identification, classification, collection, and estimation of economic information.
This article focuses on the challenges in measuring employment, hours, and earnings in this large and dynamic sector of the economy. First, historical trends in the composition of the industrial employment base are discussed to illustrate both the strong growth of this sector and the reason for concern over the adequacy of measurements. A description of the Bureau of Labor Statistics' primary sources of current data on employment, hours, and earnings, and their importance in tracking economic developments, sets the stage for exploring, in more detail, the sources of measurement problems. Some problems stem from the nature of employment practices, from the conduct of the surveys, and from employer recordkeeping procedures; others relate to the relative instability of the small establishments that characterize the sector. The final section outlines initiatives which have been undertaken by the Bureau to redesign the Current Employment Statistics Survey, the major source of employment and earnings measures by industry, to ensure that firms in the service sector are appropriately represented by the survey, and that survey operations are tailored to the special needs of service-sector employers in order to gain their cooperation in the survey.
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