Cross State Employee Compensation Adjustments

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Brian Kennedy

• June 06, 2019 17:31

Hi IMPLAN Team,

I'm looking to do an analysis looking at costs associated with childcare across all sectors within the state. What I have is the associated employee compensation costs by IMPLAN sector for 2017 and I need to know how I can put that into IMPLAN to show the total value added, or GDP, associated with that amount of employee compensation. If I just enter those values in IMPLAN it would show additional impact that would exceed that of the current state's GDP and wouldn't take into account that those costs are already in GDP and circulating through the economy. I believe I would have to treat this as more of a contribution analysis in that regard but I'm not 100% how to go about finding the portion of GDP that is associated with these employee compensation costs by businesses. 

Thanks for the help and if you need me to clarify anything further let me know.

-Brian

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  Candi Clouse

  • June 10, 2019 15:29

  Brian -

  Thanks so much for your question!  We have a few follow up questions for you to more fully understand your study.  Are you trying to measure the impact of all spending on childcare or how the childcare sector contributes to the overall economy? When you mention that you have the total Employee Compensation, is that for the entirety of the childcare sector?

   

   

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  Brian Kennedy

  • June 10, 2019 16:13

  We have calculated the cost to businesses (in terms of employee compensation) to all sectors in IMPLAN. We are looking at what portion of the economy are a result of that cost. For example in the retail trade sector there maybe $100,000 in costs in employee compensation related to turnover caused by childcare issues with employees. In metal manufacturing there may be $50,000. I want to be able to plug these into IMPLAN to see across the entirety of the economy, changes in indirect and induced values. I can't enter these in as negative values because they are spending that occurred in the economy. Additionally I can't enter these in as impacts because that would end up pushing GDP higher than actual in 2017. So I assume I would have to do some kind of contribution analysis but I'm not 100%. Just looking for some insight to go about this correctly.

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  maria_lucas

  • June 10, 2019 21:24

  Thank you for this additional information, Brian.

  Can you tell me what you'd expect the change in production or spending to be as a result of these costs? Would you expect the $100,000 in costs in employee compensation to correspond to an overall loss in production since $100,000 worth of work is lost due to turnover? Or is it possible that turnover is requiring new hiring and training which costs the company money, but simply translates to less profit for the company?

  You mentioned not being able to model this as a negative value because they are spending in the economy. Can you tell me who you are referring to here? Would these be employees that are quitting or are being fired due childcare issues? Would they be going from spending money on childcare, to not spending on childcare once they are out of work, but also have less income to spend on other things? 

  I would agree this would likely classify as a contribution analysis, but I'd like to better understand this scenario and the assumptions you will be making to best assist you here.

  Thank you,

  Maria 

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