Chapter 13.
Employment Projections
Assumptions BLS makes many underlying assumptions to carry
out the projection process. The projections themselves
should be considered as likely outcomes in light of the
assumptions. First, assumptions are made concerning
general economic or social conditions. Recent
projections, for instance, have included the following
assumptions:
- Work patterns will not change significantly over
the projection period; for example, the average
workweek will not change markedly;
- broad social and educational trends will
continue;
- there will be no major war;
- there will not be a significant change in the
size of the Armed Forces; and
- fluctuations in economic activity due to the
business cycle will continue to occur.
The assumptions that fall into this first major
category have both an overall and a particular effect.
For example, the assumption that social trends will
continue implies that our society will continue to
provide for the education of the young in a way which is
broadly similar to current practices. This would be
considered the overall effect. The particular effect of
this assumption would be to influence the projected level
of local government expenditures for education and,
consequently, the demand for teachers.
Second, BLS analysts try to identify factors which in
the past have exerted a strong influence on the structure
of employment. Once such factors have been identified, a
judgment is made as to whether those factors will
continue to have a similar influence in the future.
Conversely, analysts try to identify new or emerging
forces which may prove important in future years. Every
attempt is made to document these types of assumptions
and to indicate how they might influence future
employment growth.
During the 1970s and early 1980s, for example,
employment of cashiers in retail stores grew at the
expense of other sales occupations as these stores
centralized their cashier services. This factor, in the
judgment of BLS economists, will no longer cause changes
in the types of workers retail stores hire because the
shift to centralized cashier operations in the stores has
been completed.
Finally, BLS economists set ranges of acceptability
for variables normally considered as results of the
various projection methods, such as the level and rate of
growth of real gross national product (GDP), the
unemployment rate, the rate of growth of labor
productivity, and other key results of the various stages
of the projection process. The purpose is to ensure
consistent results rather than to impose absolute levels
on the various items involved. With these three classes
of assumptions in mind, BLS economists then specify three
alternative projection scenarios, a low, moderate, and
high level of projected economic activity. By offering
three scenarios, BLS allows the user of the projections
to select that combination of assumptions which best
represents the user's own notions of future economic
potential.
Next: Presentation
|