About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


124 Monthly Lab. Rev. 15 (2001)
Implementing the North American Industry Classification System at BLS

handle is hein.journals/month124 and id is 1283 raw text is: Implementing the North American Industry Classification System at BLS This new classification system is a more viable way of classifying industries and tracking new businesses and changes in economic activity; however, the transition period may be challenging to both data collectors and data users James A. Walker and John B. Murphy James A. Walker is an economist In the Office of Employment and Unemployment Statisics, Bureau of Labor Statistics. e-mail: Walker_J@bls.gov John B. Murphy Is Assistant Division Chief for Classifi- cation Activities, Bureau of the Census, and chair of the Economic Classification Policy Committee. e-mail: JohnBurns.Murphy@ census.gov ecent years have brought many changes in the U.S. economy. The rapid develop- ment of telecommunications and the Internet are only two examples of an incredible continuing evolution and progressively chang- ing business environment. Correspondingly, economists and statisticians are improving their tools for measuring the economy. One basic tool is the classification of businesses by industry. Since the 1930s, government statistical programs have published industry data based on the Stan- dard Industrial Classification (sic) system. Now, these government programs will provide industry statistics based on the North American Industry Classification System (NAICS).' The sic system, originally designed in the 1930s, has been revised and updated periodically to reflect changes in the U.S. economy. The last revision was in 1987 when a number of new indus- tries such as computer and software stores, video tape rental stores, and plastic bottle manufactur- ers were added.2 However, the sic system still fo- cuses on the manufacturing sector of the economy, and provides insufficient detail for the now dominant service sector. Newly developed industries in information services, health care de- livery, and even high-tech manufacturing cannot be adequately studied under the sic system be- cause they are not separately identified at the in- dustry level. Thus, a new system has been devel- oped that captures the dynamism of the 21st cen- tury economy and changes as industry activity develops. The Office of Management and Budget (OMB) announced adoption Of NAICS in 1997,1 and in 200 1, announced a revised NAICS for 2002.4 This ar- ticle discusses the changes to NAICS as reflected in the NAICS 2002 manual. It also profiles NAICS-dis- cussing its structure, issues confronting data users and collectors, and the implementation schedule for programs at the Bureau of Labor Statistics. A com- panion article on pages 22-31 provides a first look at employment and wage data based on NAICS.5 The NAICS advantage NAICS has many advantages over the sic system. First, it includes new and emerging industries that did not exist when the sic was developed. These new industries are reflective of the Internet and com- munications age and the businesses that support them, as well as the changing ways in how we work, shop, and play. New industries such as semicon- ductor and related device manufacturing, cellular and other wireless telecommunications, satellite telecommunications, and Internet publishing and broadcasting are important for understanding the effects of these industries on the future direction of our economy. Also, telemarketing bureaus and tem- porary help supply services reflect the changing way of organizing work. The effect of the aging popula- tion on the economy is shown in the new industry continuing care retirement communities. NAICS separates convenience stores and warehouse clubs into distinct industries, reflecting shifts in retailing strategies and the shopping habits of consumers. The addition of industries such as casinos, casino Monthly Labor Review December 2001 15