Tag Archives: International

New Data on Employment and Wages in U.S. Establishments with Foreign Ownership

Did you know that U.S. establishments at least partially owned by foreign companies employed 5.5 million U.S. workers in 2012? That was 5.0 percent of U.S. private-sector employment. The U.S. Bureau of Labor Statistics recently partnered with the Bureau of Economic Analysis to produce new data on foreign direct investment in the United States. These two agencies created a new, richer dataset on employment, wages, and occupations in U.S. establishments that have at least one foreign owner.

So how do we define foreign direct investment anyway? In the simplest sense, it is when a U.S. establishment has an owner from another country with at least a 10-percent stake. We consider any establishment that does not meet this threshold as domestically owned. The new data are more detailed than any data previously available on foreign direct investment in the United States. This first set of data is for 2012, but the agencies plan to work together to produce more recent data soon.

Nearly two-thirds of jobs in establishments with foreign ownership had European ownership (3.5 million jobs). The United Kingdom accounted for 874,000 of these jobs. Asia accounted for 17 percent (936,000 jobs) of jobs in U.S. establishments with foreign ownership. Canada accounted for 12 percent (671,000 jobs). The remaining world regions together accounted for less than 8 percent.

Now let’s look at how employment in establishments with foreign ownership breaks down within the United States. The map below shows the percent of private employment in establishments with foreign ownership in each state. South Carolina had the largest share of private employment in establishments with foreign ownership, 8.0 percent. Other states with large shares include New Hampshire, Michigan, Connecticut, New Jersey, and Indiana.

Map showing  each state's percent of private employment in establishments with foreign ownership, 2012

Editor’s note: Data for this map are available in the table below.

Each state’s percent of employment in establishments with foreign ownership depends in part on the industry mix in the state. The chart below shows the percent of each industry’s employment in establishments with foreign ownership. In mining, quarrying, and oil and gas extraction, 14.7 percent of employment is in establishments with foreign ownership. A large share of employment in Alaska is in this industry. Alaska’s share of employment in establishments with foreign ownership, 5.7 percent, is above the national average. Alaska’s vast energy resources may play a role in its share of employment in establishments with foreign ownership.

About 13.2 percent of all employees in manufacturing work in establishments with foreign ownership. Michigan has a large share of employment in manufacturing, and also a large share of employment in establishments with foreign ownership.

Chart showing percent of private employment in establishments with foreign ownership, by industry, 2012

Editor’s note: Data for this chart are available in the table below.

Now let’s turn from employment to wages. The map below shows how wages in establishments with foreign ownership compare with wages in domestically owned establishments across the country. We make this comparison by calculating the ratio of what workers make in average wages in establishments with foreign ownership compared to the average wage in domestically owned establishments. Wage ratios greater than one mean the average for establishments with foreign ownership is higher than for domestically owned establishments. The U.S. wage ratio in 2012 was 1.57, and every state had a wage ratio greater than one. The highest wage ratio was in New York, at 1.98. At the other end of the spectrum, Vermont had a wage ratio of 1.05.

Map showing each state's ratio of average wages in establishments with foreign ownership to domestically owned establishments, 2012

Editor’s note: Data for this map are available in the table below.

Does this mean every establishment with foreign ownership pays higher wages than domestically owned establishments? Let’s analyze wage ratios by industry. We see that the health care and social assistance industry had a wage ratio of 0.86 in 2012. All other major industry groups had wage ratios of 1.00 or higher. The finance and insurance industry had a wage ratio of 1.82.

Want to know more about these data? See our Spotlight on Statistics, “A look at employment and wages in U.S. establishments with foreign ownership.”

Chart showing ratio of average wages in establishments with foreign ownership to domestically owned establishments, by industry, 2012

Editor’s note: Data for this chart are available in the table below.

BLS and the Bureau of Economic Analysis hope to continue this interagency collaboration. Our goal is to merge and analyze more recent data from both agencies. When agencies work together to produce new datasets with little increase in cost to the public, all data users benefit. Producing accurate, objective, relevant, timely, and accessible products is the BLS mission. This collaboration to produce new relevant data allows us to improve our service to the American people.

Percent of private employment in establishments with foreign ownership, 2012
StateEmployment share

National

5.0%

Alabama

5.4

Alaska

5.7

Arizona

3.9

Arkansas

4.5

California

4.2

Colorado

4.6

Connecticut

6.5

Delaware

6.0

District of Columbia

3.4

Florida

3.6

Georgia

5.5

Hawaii

6.0

Idaho

2.9

Illinois

5.1

Indiana

6.4

Iowa

4.0

Kansas

5.7

Kentucky

6.2

Louisiana

3.9

Maine

6.1

Maryland

4.7

Massachusetts

6.3

Michigan

6.6

Minnesota

4.0

Mississippi

3.4

Missouri

4.0

Montana

1.8

Nebraska

3.6

Nevada

3.8

New Hampshire

6.9

New Jersey

6.5

New Mexico

3.0

New York

5.8

North Carolina

6.2

North Dakota

3.8

Ohio

5.3

Oklahoma

3.6

Oregon

3.4

Pennsylvania

5.5

Rhode Island

6.1

South Carolina

8.0

South Dakota

2.1

Tennessee

5.5

Texas

5.3

Utah

4.0

Vermont

3.7

Virginia

5.1

Washington

4.0

West Virginia

4.8

Wisconsin

3.5

Wyoming

3.8
Percent of private employment in establishments with foreign ownership, by industry, 2012
IndustryEmployment share

Mining, quarrying, and oil and gas extraction

14.7%

Manufacturing

13.2

Management of companies and enterprises

9.6

Wholesale trade

9.0

Information

7.8

Finance and insurance

7.5

Utilities

7.3

Transportation and warehousing

6.3

Administrative and waste services

6.0

Professional, scientific, and technical services

5.5

Total private

5.0

Retail trade

4.7

Real estate and rental and leasing

2.2

Construction

1.8

Accommodation and food services

1.6

Other services (except public administration)

1.3

Agriculture, forestry, fishing, and hunting

1.0

Health care and social assistance

0.9

Arts, entertainment, and recreation

0.7

Educational services

0.6
Ratio of average wages in establishments with foreign ownership to domestically owned establishments, 2012
StateWage ratio

National

1.57

Alabama

1.44

Alaska

1.63

Arizona

1.28

Arkansas

1.43

California

1.49

Colorado

1.53

Connecticut

1.53

Delaware

1.78

District of Columbia

1.08

Florida

1.52

Georgia

1.36

Hawaii

1.06

Idaho

1.30

Illinois

1.61

Indiana

1.56

Iowa

1.48

Kansas

1.56

Kentucky

1.36

Louisiana

1.67

Maine

1.26

Maryland

1.28

Massachusetts

1.46

Michigan

1.84

Minnesota

1.50

Mississippi

1.63

Missouri

1.55

Montana

1.63

Nebraska

1.35

Nevada

1.47

New Hampshire

1.39

New Jersey

1.64

New Mexico

1.22

New York

1.98

North Carolina

1.47

North Dakota

1.55

Ohio

1.49

Oklahoma

1.40

Oregon

1.41

Pennsylvania

1.43

Rhode Island

1.31

South Carolina

1.43

South Dakota

1.45

Tennessee

1.42

Texas

1.80

Utah

1.45

Vermont

1.05

Virginia

1.23

Washington

1.40

West Virginia

1.33

Wisconsin

1.38

Wyoming

1.72
Ratio of average wages in establishments with foreign ownership to domestically owned establishments, by industry, 2012
IndustryWage ratio

Finance and insurance

1.82

Construction

1.62

Total private

1.57

Accommodation and food services

1.51

Real estate and rental and leasing

1.50

Arts, entertainment, and recreation

1.45

Other services (except public administration)

1.44

Agriculture, forestry, fishing, and hunting

1.40

Wholesale trade

1.39

Professional, scientific, and technical services

1.39

Mining, quarrying, and oil and gas extraction

1.28

Management of companies and enterprises

1.23

Retail trade

1.20

Educational services

1.19

Manufacturing

1.18

Utilities

1.15

Administrative and waste services

1.13

Information

1.05

Transportation and warehousing

1.00

Health care and social assistance

0.86

Let’s Celebrate the Productive U.S. Workforce

Earlier this month our nation celebrated Labor Day. We celebrate Labor Day for many good reasons, but one of the best is to appreciate, even for just one day, how amazingly productive our nation’s workforce is. As we shop online or in stores, we rarely stop to think about the skills and effort it takes to produce our goods and services. Let’s take a moment to celebrate that productivity and the progress we have seen in the last few years.

Indeed, productivity of labor is at the heart of the American economy. How much workers produce for each hour they labor and how efficiently they use resources determines the pace of economic growth and the volume of goods that supply everyone (workers included) with the products and services that shape our daily lives. Growing productivity means that our standard of living very likely is improving.

Our workers are very productive. On average, each U.S. worker produced goods and services worth $129,755 last year. That’s compared with the next largest world economies: Germany at $99,377; the United Kingdom at $93,226; Japan at $78,615; China at $32,553; and India at $19,555.

Despite our great reliance on rising productivity to attain the good things of life, academics and researchers still marvel at the mysteries that surround the subject. What drives productivity change? What are the key factors behind these international differences in output per worker?

For example, does the quality of labor alone determine the rate of productivity growth? It is certainly a component of what drives labor productivity, although some countries have high educational and training levels but low productivity per worker. Labor quality has been steadily rising in the United States, but we don’t know the impact on productivity as the baby boomers retire and are replaced.

What is the right mix of labor and technology needed for changing the productivity growth rate? How can we measure the value of the dignity of work, or the personal and social value that work yields? And, what is the role of technical knowledge and product design in determining the productivity of labor?

Then there’s the mysterious role of innovation. Economists think they know that invention and scientific breakthroughs can make massive changes to productivity. However, which innovations transform productivity, and have all the low-lying fruits of productivity enhancement already been harvested?

Despite our strong international showing, analysts who watch these data may be a tad bit concerned with the sluggishness in U.S. productivity growth over the past 10 years. Since 2011, the rate of growth in labor productivity has slowed to one-third of the pace shown between 2000 and 2008, despite acceleration in the past 2 years. Even when we broaden the concept of productivity to include the output attributable to the combination of labor and other productive factors (also known as multifactor productivity), the rate of growth is still one-third of the pace it was in the first decade of this century.

Even with a subsidence in the growth rate, it is worth noting that both labor input and output are on the rise. Since the start of the current business cycle expansion in 2009, the rate of growth in labor input has been five times what it was prior to the Great Recession during the previous expansion.

Output has also grown steadily, but at a slower rate than hours. Because labor productivity is the quotient of output divided by hours, productivity can slow even when both components are rising. The relationship between the relative growth of output and hours is one of the many features that makes productivity both challenging and fascinating to study.

The Bureau of Labor Statistics engages with an extensive network of researchers in and out of the academic community whose mission is, like ours, to better understand and measure the productivity of the U.S. labor force. Labor productivity is an amazing subject because it incorporates so many facets of the nation’s economy into one statistic. By peeling back layers and looking at the details behind the summary number, we can gain valuable insight on the hours and output of our nation’s workforce. We will continue to produce and provide context for these valuable statistics that help tell the story of America’s workers.

That said, we should never lose sight of the big picture. America’s workers lead the world in their capacity to create the goods and services that define our economy and improve our lives. And that, certainly, is something great to celebrate!

New Measures of Prices for Global Trade

Shipping containers sitting on a dock at a port.How do prices for U.S. manufacturing exports compare to prices for goods manufactured abroad? How has the balance of export and import prices between the United States and Mexico changed over time? BLS has new measures to answer these and other questions on the competitiveness of U.S. production. We have published data on import and export price indexes since 1973. Since then we have made many improvements to the data we provide. Our latest improvements are the locality of destination export price indexes and the U.S. terms of trade indexes.

What are the locality of destination indexes?

Each locality of destination index measures price changes in dollars for U.S. goods exported to another country, region, or group of countries. These include major U.S. trade partners like China and the European Union. The indexes are available for all goods and for manufacturing and nonmanufacturing goods industries for some localities. The locality of destination indexes are a counterpart to the locality of origin import price indexes, which we have published since 1990. The locality of origin indexes let us examine price trends for goods imported from other countries, regions, and groups of countries.

What do the locality of destination indexes tell us?

The locality of destination indexes show how export price movements can vary depending on where U.S. goods are sold. For instance, from August to September 2018, prices for manufacturing exports to Latin America increased 0.3 percent. During the same period, manufacturing export prices to the European Union did not change. Comparing the two price movements, we can conclude market prices for U.S. exports arriving in Latin America increased relative to exports bound for Europe. Identifying these trends allows data users to dig deeper to see how currency exchange rates or shifts in global supply and demand affect price movements across trade partners.

What are the terms of trade indexes?

Each terms of trade index measures the purchasing power of U.S. exports, in terms of imports, for a specific country, region, or group of countries. In other words, the terms of trade index for China provides information on the price for exports to China, and how those export prices compare to prices for imports coming from China. Prices for exports and imports are measured in U.S. dollars, so exchange rates are already taken into account. We calculate the terms of trade index for China by dividing the China export index by the China import index, then multiplying by 100. An increase in the China terms of trade index means prices for exports to China are rising faster than prices for imports from China.

What does a terms of trade index price change mean?

A change in a terms of trade index provides information on the competitiveness of U.S. goods in the global market. Take the previous example, an increase in the China terms of trade index. U.S. producers are receiving higher prices for exported goods, meaning U.S. companies can now afford to purchase more imports. The U.S. terms of trade—or competitiveness—with China have improved. When looking at the trends, remember that the types of goods U.S. businesses export to and import from China are different, and underlying price changes may have different causes.

How broad is the coverage of the terms of trade indexes?

We have terms of trade indexes for each country, region, or group of countries where we publish both a locality of destination export index and a locality of origin import index. These countries include major trading partners:

  • Canada
  • Mexico
  • Germany
  • China
  • Japan

They also include regions or groups of countries:

  • Industrialized Countries (Western Europe, Canada, Japan, Australia, New Zealand, and South Africa)
  • European Union
  • Latin America (Mexico, Central America, South America, and the Caribbean)
  • Pacific Rim (China, Japan, Australia, Brunei, Indonesia, Macao, Malaysia, New Zealand, Papua New Guinea, Philippines, and the Asian Newly Industrialized Countries)

We publish the terms of trade indexes and the locality of destination indexes monthly. Data are available beginning with December 2017.

Why did we develop these new indexes?

The locality of destination and terms of trade indexes come from an ongoing effort to better measure the competitiveness of U.S. goods. We began expanding our measures of competitiveness in 2010 by extending the locality of origin import indexes to more detailed industries. Next we began work on the locality of destination and terms of trade indexes, eventually introducing them in September 2018.

Want to learn more?

Data Privacy Day is Every Day at BLS

There are many commemorative days, weeks, and months, but Data Privacy Day on January 28 is one that we here at BLS live every day of the year.

If this is the first time you’re hearing about it, Data Privacy Day is an international effort to “create awareness about the importance of:

  • respecting privacy,
  • safeguarding data and
  • enabling trust.”

These three phrases are central to everything we do at BLS—but don’t take my word for it! Instead, let’s hear from some of our staff members about what data privacy means in their day-to-day work lives.

I chatted with staff members from three key areas at the Bureau:

  • Collection — our field economists collect data from respondents.
  • Systems — our computer specialists protect the IT infrastructure where we keep the data.
  • Analysis — our economists analyze the data, prepare products, and explain the data to our customers.

Now, let’s meet the staff.

Richard Regotti

Richard Regotti

My name is Richard Regotti, Field Economist in the BLS Chicago Regional Office, Cleveland Area Office. I have proudly served the public in this position for 12 years. As a Field Economist I am responsible for collecting data and developing positive relationships and securing cooperation from survey respondents for the Producer Price Index and the International Price Indexes.

 

 

 

 

 

 

Jess Mitchell

Jess Mitchell

My name is Jess Mitchell and I have been an Information Security Specialist in the Bureau’s national office since 2013. I started with BLS in 1999. Currently, I am the Computer Security Incident Response Team Lead, so I, along with my team members, investigate, analyze and report on computer security incidents as well as the impact or potential impact of cyber threats and vulnerabilities to BLS systems and data.

 

 

 

 

 

Karen Kosanovich

Karen Kosanovich

My name is Karen Kosanovich, Economist, and I have spent the past 19 years working with unemployment data from the Current Population Survey, and 25 years total at BLS. I develop analyses, such as The Employment Situation, and talk to our customers about the data.

 

 

 

 

 

 

Question 1. One of our core BLS values is the confidentiality of data: All respondent data are completely confidential and used for statistical purposes only. How does this impact you in your daily work?

Richard: On a daily basis I am asking producers and service providers to voluntarily provide very sensitive company information. Even after identifying myself as a representative of our Federal Government, some respondents are not comfortable with agreeing to provide us their confidential information for use in our statistical output. By focusing on the mission of the BLS and the legal protections that are in place to safeguard survey data, I am able to function on the front line as a data collector.

Jess: This core value of data confidentiality helps me to focus on the importance of protecting the confidentiality of BLS data when my team members and I are investigating threats. The importance of BLS data underscores the importance of our daily work to keep BLS data and data respondent information confidential.

Karen: I don’t have access to information about specific people who respond to our survey. All personally identifying information is stripped away before the statistical information is given to an economist like me to analyze. For my colleagues and me, confidentiality means protecting our estimates from being distributed in advance of the official release of the unemployment rate at 8:30 a.m. on the day we publish our data.

Question 2. Does adherence to this core value create any challenges for you in your work? How have you overcome those challenges?

Richard: Adherence to complete confidentiality, supported by the fact that the data are used for statistical purposes only, presents no challenge to me; this core value is a selling point and something I make sure all potential survey participants are aware of prior to providing any data to the BLS.

Jess: Adherence to the core BLS value of data confidentiality does create a challenge when we need to engage our office in an incident or threat investigation; we must be very diligent not to share Confidential Information Protection and Statistical Efficiency Act (CIPSEA) information.

Karen: Our procedures for working with embargoed (prerelease) information are so ingrained in my work routine that I don’t notice any challenges from them. The people I work with all have the same responsibility and a strong commitment to public service, so it is easy for us to keep vigilant.

Question 3. If you could make a statement to the American people about why they should trust BLS with their information, what would that be?

Richard: BLS is not a compliance or regulatory agency in any way. We are only concerned with providing accurate, timely, relevant, and unbiased data that reports on the health and well-being of our economy. Your information contributes to the validity of BLS data.

Jess: The confidentiality of BLS data is always at the root of my office’s work, and I see the same focus on data privacy and confidentiality and diligence toward the safeguarding of CIPSEA data throughout the entire culture of BLS.

Karen: Although I don’t have names and personal details of specific unemployed people who respond to our survey, my colleagues and I are very mindful of the importance of representing the experience of all Americans when we produce our estimates. The data we publish are not just numbers, but tell the story of real people. It can be very stressful to be unemployed, and those who have been looking for work for a very long time face significant challenges in the labor market. We take our jobs, and our mission, very seriously.

And now the rules:

Of course, we don’t work in a vacuum. Like any other organization, we have rules that we live under.

BLS makes a pledge of confidentiality to its respondents that data collected are used for statistical purposes only. The pledge is covered by CIPSEA, which makes it a felony to disclose or release the information for either nonstatistical purposes (for example, regulatory or law-enforcement purposes) or to unauthorized persons. In addition, the Office of Management and Budget has Statistical Policy Directives (3 and 4) that govern BLS news releases to ensure they meet specific accuracy, timeliness, and accountability standards.

On January 28, and every day, we hope you will take steps to protect your own privacy and the privacy of others. Here at BLS we will continue to educate and raise awareness about respecting privacy and safeguarding data. It is core to our mission and central to our staff values. Without the trust these actions produce among the American people, we could not do our work in providing gold-standard data for and about America’s workers.

Thank you for your trust and happy Data Privacy Day!

Worth a Thousand Words? Announcing Ready-to-Go Interactive Graphics with BLS News Releases

Last spring I wrote about how we’ve been using more and better charts and maps to help you understand our statistics. Today I’m excited to tell you about a new set of graphical tools to make our news releases more illuminating at the moment of their posting.

We want everyone to be able to “see” quickly what’s in the hundreds of news releases we publish every year—on price trends, pay and benefits, productivity, employment and unemployment, job openings and labor turnover, and other topics. The format of these news releases still typically includes a few pages of text to explain the latest information about a topic. Most releases also include tables with lots and lots of numbers. These news releases have served our customers well for decades, but we’re always looking for ways to improve our products and services. Many of you have told us that adding charts and maps to our news releases would make them more useful and easier to understand. In recent years we’ve added charts and maps to many news releases, but most releases only include a couple of these visualizations. We are committed to do more.

We’re adding a cool new feature to many of our releases. Starting last fall, we began posting sets of interactive graphics to complement some of our most widely read economic reports. We’ll update these graphics with each new release of data. Our monthly news release on import and export price indexes was the first to have a set of interactive graphics. The quarterly Employment Cost Index news release was the next to include interactive graphics. Most recently, when we published the Employment Situation—often our most watched news release—on January 8, we presented a lengthy new set of charts from our monthly surveys of households and nonfarm establishments. Over the coming months, we will add chart sets for more releases.

I’ve used the word “interactive” to describe these charts. Let me explain what that means. Interactive features let you choose what you want to see. For example, our chart showing nonfarm employment levels over the last 20 years starts out with two lines, one for total nonfarm employment and the other for total private employment. The legend above the chart lets you turn categories on or off, simply by clicking on the industry titles in the legend. If you want to look at, say, the last 10 years instead of the last 20, you can change the time period by clicking and dragging within the chart. If you hover your pointer over the lines in the chart, you can see the exact values for individual months.

industry-employment

In the coming months we will continue to develop interactive graphics for the rest of our most watched monthly and quarterly news releases. Our goal over the next few years is to have interactive graphics to accompany all or nearly all of our news releases. I am thrilled to have this great set of tools to serve our customers better.

Take a look. I know you’ll agree with me that the BLS staff have done a fine job crafting these ready-to-go visualizations. Whatever BLS statistics you follow, I hope you find many uses for them and send us a lot of comments and suggestions!