Key classification systems being changed include:

• Industrial classification: Our well-known, well-worn Standard Industrial Classification (SIC) is in a multi-year process of being replaced by the North American Industrial Classification System (NAICS).
• Metropolitan area standards: Last fall, the Office of Management and Budget (OMB) published recommendations that would substantially the method by which metropolitan areas are defined. After reviewing comments on the recommendations, OMB will determine the final standards for metro area definitions this spring.
• Race: Through directive and guidance, OMB has instructed federal statistical agencies on new methods for collecting and tabulating data on race and ethnicity. As a result, the 2000 Census, for the first time, will allow respondents to indicate that they are members of more than one race. This change is controversial.
• Occupational classification: OMB is in the process of overseeing a major to the Standard Occupational Classification (SOC), the first in nearly 20 years. Of particular interest in these days of labor shortage, the SOC provides the framework through which the Bureau of the Census and the Bureau of Labor Statistics report occupational employment data.

For more information on any of these classification changes, see the fuller story below.

Industrial Classification

NAICS, prepared in cooperation with Canada and Mexico, aims to reflect the realities of the service economy and the information age, in contrast to the manufacturing orientation of the SIC, originally developed in the 1930s. Key aspects of the change from SIC to NAICS include (per the Census Bureau's NAICS Web page):

• Coding: NAICS industries are identified by a 6-digit code, in contrast to the 4-digit SIC code. The longer code accommodates the larger number of sectors and allows more flexibility in designating subsectors.
• Sectors: NAICS groups the economy into 20 broad sectors, up from the 10 divisions of the SIC system. Many of the new sectors reflect recognizable parts of SIC divisions, such as the Utilities and Transportation sectors, broken out from the SIC division Transportation, Communications, and Utilities. Other sectors represent combinations of pieces from more than one SIC division. For example, the new Information sector includes major components from Transportation, Communications, and Utilities (broadcasting and telecommunications), Manufacturing (publishing), and Services Industries (software publishing, data processing, information services, motion picture and sound recording).
• Time Series Breaks: We are told that data for more than two-thirds of all 4-digit SICs will be derivable from the NAICS system, either because the industry is not being changed (other than in code), or because new industries are being defined as subdivisions of old ones. For example, SIC 4953, Refuse Systems, is being subdivided cleanly into eight new industries, differentiating collection and disposal, and separating hazardous waste, materials recovery, landfills, and incinerators. An April 9, 1997 Federal Register notice lists 351 new industries in NAICS not previously recognized separately under SIC (i.e., creating SIC-) NAICS times series will be problematic). Of the remaining industries, 475 are substantially unchanged and 338 represent revisions to the scope of existing industries (such as SIC 4953 noted above).

The implementation of NAICS is being managed by each statistical agency independently, and over a period of years. What we know so far:

• The Census Bureau began implementing NAICS in the 1997 Economic Census. Both County Business Patterns and the Annual Survey of Manufactures (ASM) will be converted to NAICS for data year 1998. Detailed geographic data will be available for the ASM in late June 2000 and for the CBP in July 2000.
• The Bureau of Economic Analysis (BEA) began implementing NAICS in its Foreign Direct Investment (FDI) program, starting with the 1997 benchmark survey, which was published in the summer 1999. In 2002, BEA plans to publish its benchmark Input-Output accounts on a NAICS basis - the usual five-year lag from an Economic Census year. Following that, BEA plans to incorporate NAICS into its current GDP and related accounts programs in 2003 and 2004. NAICS-based industry estimates, benchmarked to the 1997 national Input-Output accounts, for state personal income, gross product originating by industry, and gross state product by industry will follow during 2003-2004.
• The Bureau of Labor Statistics (BLS) tentatively indicates that the NAICS format will be used for Covered Employment and Wages (ES-202) and Mass Layoff Statistics for data year 2001, Occupational Employment Statistics for data year 2002, Current Employment Statistics for data year 2003, and the National Compensation Survey for data year 2004.

Resources:

To find out more about NAICS, go to http://www.census.gov/epcd/www/naics.html, maintained by the Census Bureau, or http://www.naics.com/, maintained by the Utah-based NAICS Association.

Metropolitan Area Definitions

Federally determined metropolitan area (MA) standards are reviewed and, if necessary, revised in the years before each Decennial Census. The current review is the sixth such effort, the first being for the 1950 Census. OMB is about to conclude a multi-year effort to prepare a new set of MA standards, and expects to publish final standards by April 1 of this year. In October, 1999, OMB published the recommendations of its Metropolitan Area Standards Review Committee (MASRC); comments on the recommendations were accepted through December 1999.

A summary of the recommendations of the MASRC (taken from the October 20, 1999 Federal Register) follows:

• MASRC recommends a Core-Based Statistical Area (CBSA) Classification to replace the current MA classification. The cores (i.e., the densely settled concentrations of population) for this classification would be Census Bureau-defined urbanized areas and smaller densely settled "settlement clusters" identified in Census 2000. CBSAs would be defined around these cores.
• This CBSA Classification has three types of areas based on the total population of all cores in the CBSA: (1) Megapolitan Areas defined around cores of at least 1,000,000 population; (2) Macropolitan Areas defined around cores of 50,000 to 999,999 population; and (3) Micropolitan Areas defined around cores of 10,000 to 49,999 population. The identification of Micropolitan Areas extends concepts underlying the core-based approach to smaller population centers previously included in a "nonmetropolitan residual."
• MASRC has recommended use of counties and equivalent entities as the building blocks for statistical areas throughout the United States and Puerto Rico, including the use of counties as the primary building blocks for statistical areas in New England. This recommendation does not preclude the potential adoption of a sub-county entity as the building block for statistical areas in the future. MASRC also has recommended that minor civil divisions be used as building blocks for an alternative set of statistical areas for the New England States only.
• MASRC has recommended adoption of a single commuting threshold of 25 percent to establish qualifying linkages between outlying counties and counties containing CBSA cores. In addition, MASRC recommends eliminating the use of measures of settlement structure, such as population density and percent of population that is urban, in conjunction with commuting when considering whether outlying counties qualify for inclusion. This change reduces the conceptual and operational complexity of the standards but may affect the geographic extent of some existing areas defined according to the current MA standards.

  Resources:

  The Metropolitan Area Standards Review Project Web site can be found at http://www.census.gov/population/www/estimates/masrp.html. Through this site, you can read the Federal Register notice providing the recommendations of the MASRC.

Race

In a few weeks, U.S. households will receive the 2000 Census questionnaire. For the first time, the questionnaire will allow respondents to check more than one racial category. This new approach is not without controversy, as these excepts from the February 12, 2000 New York Times ("Despite Options on Census, Many to Check 'Black' Only") suggest:

• The census forms that will be mailed to most Americans . . . will tell them to mark one or more of 14 boxes representing 6 races (and subcategories) -- white, black, American Indian or Alaska Native, Asian Indian, other Asian and Pacific Islander-or to check "some other race. . . . With the 6 racial categories offering 63 possible combinations of racial identity, which government demographers will tabulate as distinct groups, the census could provide a remarkably meticulous racial profile of American society.
• (However) (m)any people, indeed most, who could claim more than one race are not expected to do so, demographers and census officials say. Part of the reason, according to demographers, is habit: Americans are simply unaccustomed to the option. More profoundly, however, the change is fueling a weighty debate about the meaning of race, in which interpretations of history, politics and experience frequently overshadow the simpler matter of parentage.
• On one side of the debate stand those who see the revision as a tactic to divide blacks at a time when affirmative action and other remedies to discrimination are under attack. . . . The racial data the census provides is so crucial to developing civil rights policy and directing government aid that some groups like the National Association for the Advancement of Colored People are urging people of both black and white parentage to identify themselves as only black. The Asian American Legal Defense and Education Fund has made a similar request of people who are part white and part Asian.
• Opposing them are multiracial Americans who resent having to identify with just one part of their heritage. . . . (S)ome experts note that checking options like Asian and white, or American Indian and Pacific Islander, does not carry the same historical baggage that mixed-race blacks confront in deciding whether to say they are part white.
• (I)t is not known how many people will claim more than one race. In census dress rehearsals in a variety of locations around the country in 1998, only 2 percent of those surveyed checked more than one race . . . .

  Resources:

1. The Census 2000 questionnaires can be obtained from http://www.census.gov/dmd/www/infoquest.html.
2. OMB's Draft Provisional Guidance on the Implementation of the 1997 Standards for the Collection of Federal Data on Race and Ethnicity (February 17, 1999) can be downloaded from http://www.whitehouse.gov/OMB/inforeg/race.pdf.

Occupational Classification

In the September 30, 1999 Federal Register, OMB issued final decisions regarding the 1998 Standard Occupational Classification (SOC). The 1998 SOC was created for two primary reasons. First, the last SOC was prepared in 1980, and so was out of date. Second, and very importantly, despite the existence of the 1980 SOC, many federal agencies have used their own unique occupational classification systems, making cross-agency comparisons difficult.

Here is a summary of key aspects of the 1998 SOC, drawn from the Federal Register notice:

• Reflecting advances in factory and office automation and information technology, the shift to a services-oriented economy, and increasing concern for the environment, the new classification structure has more professional, technical, and service occupations. Production occupations, on the other hand, have undergone significant consolidation. Office and administrative support occupations - for example, office machine operators - also have been consolidated.
• All Federal agencies that collect occupational data will use the 1998 SOC. Similarly, all State and local government agencies, as well as private sector organizations, are strongly encouraged to use this national system that provides a common language for categorizing occupations in the world of work.
• The (BLS) annual Occupational Employment Statistics survey will first reflect the 1998 SOC in 1999; national, State, and Metropolitan Statistical Area data are expected to be available in early 2001. Occupational definitions and data completely based on the 1998 SOC will be incorporated for the first time in the 2004-05 edition of the (Occupational Outlook) Handbook, which is expected to be published in early 2004. Data collected by the 2000 Census of Population will be coded to the 1998 SOC and published in 2002. Data from the Current Population Survey will be based on the new classification for the first time in 2003.
• Publication of the 1998 Standard Occupational Classification Manual is planned for the first half of 2000. It is anticipated that the next major review and revision of the SOC will begin in 2005 in preparation for use in the 2010 Decennial Census.

  Resources:

  Information on the SOC, including the recent Federal Register notice, can be found at http://stats.bls.gov/soc/soc_home.htm.