APPENDIX F. Port of Long Beach Pier S Labor Market Study. AECOM July 25, 2011

Transcription

1 APPENDIX F Port of Long Beach Pier S Labor Market Study AECOM July 25, 2011

2 PORT OF LONG BEACH PIER S LABOR MARKET STUDY AECOM Economics Sustainable Economics Group July 26, 2011 DRAFT

3 Table of Contents Executive Summary... 3 Study Purpose... 3 Background... 3 The Four-Step Process... 3 Key Findings... 4 Introduction... 6 Purpose and Need... 6 Methodology... 6 Employment Growth Impacts... 9 Port of Long Beach Employment Impacts... 9 SIC to NAICS Conversion... 9 Historic Data & Projections Employment Impact Analysis Population Impacts Average Persons per Household Average Workers per Household: The Population Factor Example: Calculating Population Impacts Regional Commuting Patterns Population Impacts by Geography: 2015 through Model Instructions Converting POLB Job Impact Estimates from SIC to NAICS Model Inputs Column Inserts Updates to employed persons to population Appendix A Appendix B Please see the disc accompanying this report for the full Excel model. Photos used in the document were obtained by Flickr and are licensed for commercial use. Draft POLB Pier S Labor Market Study Page 2

4 Executive Summary Study Purpose The purpose of this labor market study is to estimate the number of workers and people who will in-migrate to the Gateway Cities 1 resulting from the operations of a proposed Port of Long Beach (POLB) container terminal. The study summarizes AECOM s methodology for estimating future population gains to Los Angeles from additional employment. It then estimates the share of these gains captured by the Gateway Cities, a subarea of Los Angeles that contains a concentration of port industry uses, based on existing commute behavior. In the development of the study, AECOM created a population impact model which can be applied to future Port of Long Beach expansion efforts. This study provides a guide for applying the model in the future as additional demographic and employment data become available. Background The Port of Long Beach s planned expansion of Pier S (hereinafter Project) will not only provide needed capacity for the anticipated increase in cargo shipping but is also expected to add numerous jobs in the region. According to most recent estimates for the proposed Project, project operations will add 5,239 Port Industry jobs to Los Angeles by The expectation is that many of these jobs will be filled by the existing available labor force in Los Angeles, which is estimated at 373,800 unemployed persons as of However, it is important to note that Port Industry jobs traditionally require specific skills and knowledge not readily available in the local labor force. Accordingly, skilled workers from outside the local labor market may be necessary to meet the demand. In general, new port industry jobs are filled by those who reside in the local labor force market area, defined as Los Angeles, and those who reside beyond the local area, either in the 5- region containing Los Angeles or beyond. For workers drawn from outside Los Angeles, some will choose to reside in Los Angeles while others will commute from their existing residence. New employees who move into the area may also come with additional household members. While the in-migration of this new population will affect local economies through increased demand for public services, these people will also infuse new capital in the economy through the increased demand for goods and services. The Four-Step Process 1 The Gateway Cities include twenty-seven independent contiguous municipalities located in southeastern Los Angeles with a combined population of over two million people. The Gateway Cities is the home of the Port of Long Beach. Draft POLB Pier S Labor Market Study Page 3

5 AECOM developed a model to estimate and evaluate the potential population impacts of new marine terminal facilities at Pier S for the Port of Long Beach. The following diagram illustrates and describes the four-step process taken to estimate these impacts. A more detailed version illustrating the step-by-step process can be found in the Introduction. Evaluate labor market trends in Los Angeles and determine peak employment levels within the last ten years compared to Estimate the total direct, indirect, and induced port industry employment impacts for 2013, 2020 and 2030 for Los Angeles and the 5- region. Provide an estimate of the proportion of jobs hired locally versus number of jobs that will be drawn from outside Los Angeles. Determine the number of residents generated per employed resident. Next, calculate the total incoming population by applying this number to the estimated number of jobs imported from outside Los Angeles. Assess the regional population impact by distributing the imported households based on the historical commute patterns of Port of Long Beach employees (determined using U.S. Census data). Key Findings Following are the key findings of this study under the proposed Project: Draft POLB Pier S Labor Market Study Page 4

6 1. The demand for port industry workers, as a result of the Project, is anticipated to exceed the supply of available labor in the Gateway cities and Los Angeles within specific employment categories where projected port-related employment would exceed available supply. Notwithstanding migration needs within specific employment categories, AECOM s employment model estimates that, by 2030, the existing labor pool in Los Angeles can conservatively supply 83 percent of the necessary workers. 2. Sixty-nine percent of the workers originating from outside Los Angeles would most likely choose to migrate, and ultimately reside, within Los Angeles. Based on historical commute patterns, 44 percent would reside in the Gateway cities, and 25 percent throughout the remainder of Los Angeles. The remainder would reside in the larger Los Angeles metropolitan area. 3. It is expected that of the 5,239 new Port Industry jobs created in Los Angeles by the Project by the year 2030, 907 jobs will be filled by in-migrants. These in-migrants have a population equivalent of 1,977. The total population impact to the Gateway cities is 870 people by the year The balance of the new population will settle elsewhere in Los Angeles (430 people) and in the region outside Los Angeles (610 people). Draft POLB Pier S Labor Market Study Page 5

7 Introduction Purpose and Need The volume of containerized cargo transported through the Port of Long Beach (POLB) is projected to nearly triple by To provide the needed capacity for the anticipated additional cargo associated with expanding export and import volumes and the requirements of larger, world-class vessels, the Port is proposing new marine terminal facilities at Pier S. Under the proposed Project, these new facilities are anticipated to result in nearly 5,239 new direct, indirect, and induced port-industry jobs in Los Angeles. Depending on the available labor supply, the jobs generated by the POLB s Pier S expansion plan could increase the population of the communities surrounding the port, as well as the larger region. The purpose of this labor market study is to estimate and evaluate these potential population impacts. Through an assessment of historic fluctuations and the projected change in employment by industry in Los Angeles, this analysis determined the potential gap between anticipated demand for labor and the available supply of labor within the, assuming that additional workers will need to come in from outside the immediate region. Next, the number of new residents generated per new worker was estimated, and the regional distribution of these households was projected based on historic commute patterns. The final result of this analysis includes the total population impacts of the POLB Pier S expansion by geography in 2013, 2020 and A secondary purpose of this analysis is to create a labor market and population impact model that can be updated by the POLB as new data becomes available. This model is included on the disc accompanying this report, and instructions for updating the model are included in the final section of this study. Methodology AECOM developed a two-tiered model to estimate and evaluate the potential population impacts of new marine terminal facilities at Pier S for the Port of Long Beach. This model is composed of an employment impact analysis module that feeds into a population impact analysis module. The combined results of the analyses produce the population impact estimates. Finally, by applying commuter behavior data, the population impacts are distributed proportionally across the region including the Gateway Cities. The following is a brief description of the methodological process for the employment impact analysis and the population impact analysis as they correspond to Figure 1. A more detailed description of the individual steps can be found in subsequent sections. Employment Impacts Analysis 1. Convert industrial sector employment projections from the Port of Long Beach s input-output model from the Standard Industrial Classification (SIC) system to the North American Industry Classification System (NAICS). 2. Analyze historical California Employment Development Department (EDD) employment data for estimating when direct, indirect, and induced jobs created from the Port expansion in 2013, 2020 and 2030 would impact the region by exceeding the number of jobs in a given sector above peak historic employment levels. Draft POLB Pier S Labor Market Study Page 6

8 Population Impacts Analysis 1. Estimate the number of new residents generated per new worker using the U.S. Bureau of Census Public Use Microdata Sample (PUMS) data. This provides an employed person to the population factor. 2. Apply the population factor to the employment impact analysis results to estimate total population impacts for the region. 3. Project the regional distribution of the population based on historic commute patterns obtained from the U.S. Bureau of Census Transportation Planning Package (CTPP). The final result of this analysis determined the total population impacts of the POLB Pier S expansion by geography in 2013, 2020 and Model Assumptions The following provides an overview of labor market study assumptions which have influenced the employment growth and population impact estimates. Employment Growth Impacts: 1. If an industry category exceeds its peak employment level between 1998 and 2007, it is assumed that any required labor would need to be imported from outside Los Angeles. This assumption leads to a conservative method in calculating in-migration job impacts by assuming that any employment growth exceeding the numerical historic high will result in in-migration from outside Los Angeles. Although this leads to an over-estimation of in-migration, it was deemed as the most appropriate method for the purposes of this study due its eventual inclusion within the Environmental Impact Report. Population Impacts: 1. The average household migrating into Los Angeles as a result of the port expansion jobs will be similar in size to Los Angeles households in The average worker migrating into Los Angeles as a result of the port expansion jobs will support the same number of household dependents as in Persons working in jobs created indirectly from the Port expansion will have the same commute behavior as those currently working directly for the Port. Draft POLB Pier S Labor Market Study Page 7

9 Figure 1: Labor Market and Population Impact Model EDD Historical Data ( ) Draft POLB Pier S Labor Market Study Page 8

10 Employment Growth Impacts Port of Long Beach Employment Impacts For this labor market study, the Port of Long Beach provided estimates of projected employment growth by industry for the Pier S expansion in 2013, 2020 and 2030 for Los Angeles. 2 The estimates were obtained through an input-output computer model first developed for the Port in 1988 and subsequently updated in 2002 in collaboration with Rutgers University. The tables below outline the expected employment growth for each 2-digit NAICS industry category for Los Angeles for the Two-Berth Alternative, the Multi-Use Storage Alternative, and the Three-Berth Alternative (proposed Project). Please refer to Appendix A for a table of estimates impacts by 3-digit NAICS code for the proposed Project. As expected, given the types of industry activities associated with a port, over half of the projected employment growth anticipated for Los Angeles falls within Transportation & Warehousing in all three scenarios. Under the Two-Berth Alternative, 3,871 jobs would be generated by Under the Multi-Use Storage Alternative, 5,361 jobs would be generated by Finally, under the proposed Project, 5,239 jobs would be generated by The peak year for employment under the proposed Project would be 2020, when there would be a job impact of 6,706. TABLE 1: POLB Employment Estimates by 2-digit NAICS Code to Los Angeles : Two-Berth Alternative NAICS Title POLB Job Impact 2013 POLB Job Impact 2020 POLB Job Impact Agriculture, Forestry, Fishing, Hunting Mining, Utilities, Construction Manufacturing Wholesale Trade Retail Trade Transportation & Warehousing 2,362 2,517 1, Information Finance, Insurance and Real Estate Professional, Scientific and Technical Services Education, Health and Social Services Arts, Entertainment, Accommodation & Food Services Other Services Government Total 4,650 4,955 3,871 2 These employment impacts include direct, indirect, and induced jobs. Workers directly employed by a sector account for direct jobs. Indirect jobs provide goods and services in support of that sector. Induced employment results from the spending impact of the employees supported by Port operations. Draft POLB Pier S Labor Market Study Page 9

11 TABLE 2: POLB Employment Estimates by 2-digit NAICS Code to Los Angeles : Multi-Use Storage Alternative NAICS Title POLB Job Impact 2013 POLB Job Impact 2020 POLB Job Impact Agriculture, Forestry, Fishing, Hunting Mining, Utilities, Construction Manufacturing Wholesale Trade Retail Trade Transportation & Warehousing 682 1,281 3, Information Finance, Insurance and Real Estate Professional, Scientific and Technical Services Education, Health and Social Services Arts, Entertainment, Accommodation & Food Services Other Services Government Total 733 1,378 5,361 TABLE 3: POLB Employment Estimates by 2-digit NAICS Code to Los Angeles : Proposed Project NAICS Title POLB Job Impact 2013 POLB Job Impact 2020 POLB Job Impact Agriculture, Forestry, Fishing, Hunting Mining, Utilities, Construction Manufacturing Wholesale Trade Retail Trade Transportation & Warehousing 2,362 3,407 2, Information Finance, Insurance and Real Estate Professional, Scientific and Technical Services 717 1, Education, Health and Social Services Arts, Entertainment, Accommodation & Food Services Other Services Government Total 4,650 6,706 5,239 SIC to NAICS Conversion The Port of Long Beach s model defines industries using the Standard Industrial Classification (SIC). However, in 2002, the North American Industry Classification System (NAICS) replaced the SIC system. Thus, the model converts projected employment impacts from SIC to more current NAICS employment categories. This reassignment converted 2-digit SIC codes to 2- and 3-digit NAICS codes according to the Bureau of Labor Statistics approved methodology. A more detailed explanation of the SIC to NAICS conversion can be found in Section 4: Model Updating Instructions. Draft POLB Pier S Labor Market Study Page 10

12 Historic Data & Projections Evaluating Economic Data Sources As part of the Port of Long Beach labor market study, AECOM compared and evaluated the economic data sources to determine the most appropriate and defensible data series that would inform the labor market assessment. The data sources assessed were the U.S. Bureau of Labor Statistics (BLS), the California Employment Development Department (EDD), and the Southern California Association of Governments (SCAG). AECOM reviewed published methodology reports, corresponded with representatives from each of the available data sources, and reviewed the modeling and forecasting techniques used by the various organizations, including the San Diego Association of Governments. Supplemental information on EDD and SCAG s methodologies are included in Appendix B. When evaluating the various data sources, a set of criteria was utilized to determine which source would be the most appropriate for the purposes of this labor market study. AECOM used the following criteria to determine the appropriate economic data: 1. The source had to provide historical employment data that included a recession year such that practical historical analysis could be applied to the data. 2. Employment estimates must originate from an official federal, state, or regional government providing at least two-digit NAICS level information. 3. The data needed to be provided by industry at an appropriate level of detail and at a county-wide level. It was determined that the BLS was not an applicable data source for the purposes of the study for geographical reasons, as it only provides employment projections at the national level. EDD supplies three-digit NAICS historic employment data by and provides projections to Thus, the primary source evaluated was the EDD. Analysis of Los Angeles Population, Labor Force, and Employment Before determining the population impacts of the POLB s expansion, it is essential to evaluate estimates of Los Angeles s historic and projected population, labor force, and employment in order to understand growth patterns in the area. In 2008, the population of Los Angeles was approximately 10.3 million, representing a compound annual growth rate (CAGR) of 1.2 percent since From the same period, the civilian labor force in Los Angeles increased from approximately 4.55 million to 4.97 million, representing a CAGR of 0.9 percent (Figure 2). As such, the labor force has been growing at a slower rate than the total population over the past decade. Draft POLB Pier S Labor Market Study Page 11

13 Figure 2: Los Angeles Labor Force, ,000, % 10,000,000 8,000,000 6,000,000 4,000,000 2,000, % 50.0% 45.0% Population Civilian Labor Force Labor Force as a % of Population Source: EDD, % Figure 3 contrasts the Civilian Labor Force (defined as members of the population aged 16 or over who are not in the military or institutions such as prisons or mental hospitals and who are either employed or are unemployed and actively seeking and available for work) with Total Employment from 1998 to While the labor force has steadily grown over the past decade, total employment has experienced waves of increases and decreases and is currently digressing away from the trend seen for the total labor force due to the recent downturn in the economy. The most recent information from the EDD indicate there is a growing proportion of available labor, estimated at approximately 637,900 in 2008, and accounting for 13% of the total civilian labor force. In other words, only 87% of the labor force was estimated to be employed in This labor surplus has grown significantly from peak employment years in 1999 and 2000, when approximately 93% of the labor force was employed. Draft POLB Pier S Labor Market Study Page 12

14 Figure 3: Los Angeles Labor Force and Total Employment, ,200,000 5,000,000 4,800,000 4,600,000 4,400,000 4,200,000 4,000,000 3,800, Source: EDD, % 98.0% 96.0% 94.0% 92.0% 90.0% 88.0% 86.0% 84.0% 82.0% 80.0% Civilian Labor Force Total Employment Employment as a % of Labor Force Although there is an increasing gap between employment and labor force, indicating a surplus of labor in the, the conservative analysis performed for this study indicates that a proportion of the necessary labor required as a result of the Pier S expansion will need to be imported from outside the : EDD Historical Data Table 2 outlines the historical employment counts for industry categories at the NAICS 2-digit level in Los Angeles for the period Industries with the highest growth during this period were Education, Health & Social Sciences following national employment growth trends, with a CAGR of 2.4 percent, and Arts, Entertainment, Accommodation & Food Services, with a CAGR of 1.9 percent. Industries with the most significant declines during the time period examined were Manufacturing, declining 3.9 percent a year, and Farm & Agriculture, declining at a rate of 1.1 percent per year. Draft POLB Pier S Labor Market Study Page 13

15 TABLE 4: Los Angeles Employment by Industry Category ( ) EDD Historical Data CAGR NAICS Title ('98 - '08) Farm 7,700 6, % 92 Government 541, , % Mining, Utilies & Construction 136, , % Manufacturing 643, , % 42 Wholesale Trade 216, , % Retail Trade 374, , % Transportation & Warehousing 154, , % 51 Information 215, , % Finance, Insurance and Real Estate 224, , % Professional, Scientific & Technical Services 839, , % Education, Health & Social Services 395, , % Arts, Entertainment, Accommodation & Food Services 331, , % 81 Other Services 135, , % Total 4,214,100 4,334, % Employment Impact Analysis In determining the best method to assess the s labor market and the margin of locally available labor in each of the industry categories, a number of quantitative methods were considered. The primary methods considered were a threshold method, which evaluates the absolute values of employment numbers to determine the margin of potential employment growth, and a proportional method, which evaluates the proportion of employment numbers to the overall civilian labor force to determine the margin of potential employment growth. It was determined that the most appropriate method would be the threshold method, as it is the more direct and conservative method of the two, which are all considered important attributes for the use in an Environmental Impact Report. The underlying premise of the threshold method is population grows as soon as a given industry sector exceeds historic peak employment levels, drawing from labor outside the. It conservatively assumes that available labor from other industry sectors cannot fill positions within another growth sector (i.e. farmers cannot become crane operators and food processing workers cannot fill available software programming positions). The threshold method is also simpler and can be easily applied for future population impact analyses. The historical employment levels in Los Angeles from 1998 to 2007 are used in the threshold method. Whichever 3-digit industry categories that in future projections are expected to exceed the maximum level during the preceding decade is assumed to have to draw on labor from outside the. The summary of these findings at the 2-digit level is shown in the tables below. Outlined in the tables are the estimated POLB job impacts in 2013, 2020 and 2030, as well as the number of those jobs that are expected to be filled by labor from outside Los Angeles for the Two-Berth Alternative, Multi-Use Storage Alternative, and the proposed Project. Draft POLB Pier S Labor Market Study Page 14

16 TABLE 5: Jobs Impacts: Two-Berth Alternative (Cumulative) LA Job Impact 2013 Non-LA labor requirements 2013 LA Job Impact 2020 Non-LA labor requirements 2020 LA Job Impact 2030 Non- LA labor require -ments 2030 NAICS Title 11 Agriculture, Forestry, Fishing, Hunting Mining, Utilities, Construction Manufacturing Wholesale Trade Retail Trade Transportation & Warehousing 2, , , Information Finance, Insurance and Real Estate Professional, Scientific and Technical Services Education, Health and Social Services Arts, Entertainment, Accommodation & Food Services Other Services Government Total 4, , , TABLE 6: Job Impacts: Multi-Use Storage Alternative (Cumulative) NAICS Title LA Job Impact 2013 Non-LA labor requirements 2013 LA Job Impact 2020 Non-LA labor requirements 2020 LA Job Impact 2030 Non-LA labor requirements Agriculture, Forestry, Fishing, Hunting Mining, Utilities, Construction Manufacturing Wholesale Trade Retail Trade Transportation & Warehousing , , Information Finance, Insurance and Real Estate Professional, Scientific and Technical Services Education, Health and Social Services Arts, Entertainment, Accommodation & Food Services Other Services Government Total , , Draft POLB Pier S Labor Market Study Page 15

17 TABLE 7: Jobs Impacts: Proposed Project (Cumulative) LA Job Impact 2013 Non-LA labor requirements 2013 LA Job Impact 2020 Non-LA labor requirements 2020 LA Job Impact 2030 Non- LA labor require -ments 2030 NAICS Title 11 Agriculture, Forestry, Fishing, Hunting Mining, Utilities, Construction Manufacturing Wholesale Trade Retail Trade Transportation & Warehousing 2, , , Information Finance, Insurance and Real Estate Professional, Scientific and Technical Services , Education, Health and Social Services Arts, Entertainment, Accommodation & Food Services Other Services Government Total 4, ,706 1,189 5, Results from the Port s I/O model, translated into NAICS categories by the population impact model described above, show that under the Two-Berth Alternative, the Project will generate 3,871 new direct, indirect, and induced Port Industry jobs in Los Angeles by Of those, the population impact model predicts that 644 positions (17%) will need to be filled by workers outside Los Angeles. Under the Multi-Use Storage Alternative, the Project will generate 5,361 jobs in Los Angeles by 2030, of which, 610 positions (11%) will need to be filled by non-los Angeles residents. Under the proposed Project, the Project will generate 5,239 jobs in Los Angeles by 2030, of which 907 positions (17%) will need to be filled by workers outside Los Angeles. The peak year, 2020, would see a job impact of 6,706 positions, of which, 1,189 positions (18%) would need to be filled by workers outside the. Draft POLB Pier S Labor Market Study Page 16

18 The employment impact analysis revealed that the population impacts on Los Angeles and the Gateway Cities. As stated in the previous section, the three scenarios would generate from 3,871 to 5,361 Port Industry jobs in Los Angeles by The analysis also indicated that the local economy would be unlikely to supply 100% of the labor to meet all of projected increase in employment. Consequently, the estimated excess demand must be met by workers outside Los Angeles. The Labor Market Study projects the number of people who may move to the Gateway cities or Los Angeles as the result of the proposed port expansion. The population impact analysis takes into account that many workers have dependents but also that many households have more than one worker. Average Persons per Household Population Impacts To assess the migration impacts of new workers, AECOM first estimated the average population per employed resident. The U.S. Census Bureau s Percent Public Use Microdata Sample (PUMS) was used to determine the number of residents per employed resident. The 5 Percent PUMS files are the individual records of the long sample census form, Sample Form 3 (SF3), which contain records for a sample of households with information on the characteristics of each unit, including household size and employment status of each person in the household. By using PUMS, the average number of persons per household was estimated for only those households with at least one employed, documented resident. For Los Angeles, the average number of persons per household with at least one employed, documented resident was 3.03 in For the model, the assumption is that the average household migrating into Los Angeles as a result of the port expansion jobs will be similar in size to existing households. Average Workers per Household: The Population Factor Households may have multiple employed residents. Thus, applying the 3.03 persons per household can lead to an overestimation of the number dependents per employed resident. AECOM adjusted for the potential overestimation by weighting the average number of persons per household by the average number of workers per household, In other words, Los Angeles averages 1.39 employed persons per household, where the household has at least one employed person. 3 Thus, the model assumes that the average household migrating into Los Angeles to fill port-related expansion jobs will have a similar distribution of workers per household as existing Los Angeles working households. 3 This should not be confused with an average number of employed persons per household calculation, which includes households that do not have anyone working. Draft POLB Pier S Labor Market Study Page 17

19 Example: Calculating Population Impacts To compute the population impact per new job, the following function is performed: Figure 4: Calculating Population Impacts For example, assuming 1,000 newly created jobs: Step 1. Divide new jobs by population factor: 1,000 jobs / 1.39 = 720 households (adjusted) Step 2. Multiply the number of households (adjusted) in Step 1 by the average number of residents per household: 3.03 persons 720 households (adjusted) X 3.03 persons = 2,180 people 4 In this example, an increase in 1,000 jobs as a result of the proposed Port expansion would lead to a potential population impact of approximately 2,180 people spread over 720 households. Regional Commuting Patterns Historically, the majority of workers employed at the Port of Long Beach have resided in Los Angeles, including the Gateway cities. An evaluation of the commuting patterns of workers in the Census tract containing the Port of Long Beach revealed 69 percent reside in Los Angeles and 44 percent 4 Totals are rounded to the nearest integer. Draft POLB Pier S Labor Market Study Page 18

20 of total workers were drawn specifically from the Gateway cities. 5 For the Port of Long Beach, 31 percent of employees reside outside of Los Angeles. This regional distribution of employment and commute behavior are applied to the population migrating into Los Angeles as a result of the port expansion jobs. The assumption is that future commute patterns for new workers in Port Industry jobs will be similar to existing patterns. This is a conservative estimate as it assumes that persons working in jobs created indirectly from the Port expansion will have the same commute behavior as those working in the immediate port vicinity. Population Impacts by Geography: 2013, 2020 and 2030 The population impacts created by drawing labor from outside Los Angeles have been estimated for the three alternatives using the formula described in the previous section. The proposed Project, would create 907 jobs in all industry categories that would require drawing labor from outside Los Angeles by of these jobs would be created in 2013 and another 395 in the next seven years for a total of 1,189 jobs through 2020 that will draw labor from outside Los Angeles. Pier S achieves full operation and container volumes reach their full capacity in 2020 and remain the same through Port industry jobs, however, fall in 2030 as labor becomes more productive. Subsequently, 282 fewer jobs will be filled by labor from outside Los Angeles in 2030 compared to By applying the population factor, the total population impact is derived, resulting in 1,730 people in 2013, a peak impact of 2,592 people in 2020, and finally 1,977 people in Impacts from the Two- Berth Alternative result in 794 jobs in all industry categories requiring labor from outside Los Angeles in The number of jobs increases to 852 by 2020 and then decreases to 644 jobs by The population impacts of these jobs are estimated to be 1,730 in 2013, growing to 1,858 people in 2020 and settling at 1,404 people in Impacts from the Multi-Use Storage Alternative will create no jobs or population impacts through From 2020 through 2030, the Multi-Use Storage Alternative will result in 610 jobs that will require labor from outside Los Angeles, which translates to a population impact of 1,331 people. 5 AECOM utilized the Census Transportation Planning Package (CTPP) to evaluate the commuting behavior of POLB employees. The commuting patterns were evaluated by calculating the estimated number of workers traveling to and from the POLB Census Tract ( ) in relationship to the worker s residence (identified by Census Tract). CTPP data, based on 2000 Census data, serve as the foundation for transportation planning and policy analyses performed by state Department of Transportation and metropolitan planning organizations. There data serve as the basis for understanding changes in travel patterns as well as changes in socioeconomic trends affecting travel. Draft POLB Pier S Labor Market Study Page 19

21 TABLE 8: Population Impacts POLB Population Impact 2013 Three- Berth (Proposed Project) Alternatives Two-Berth Multi-Use Storage Demand for workers outside Los Angeles Average Workers per HH Average HH size Total Potential Population Impact ,730 1,730 0 POLB Population Impact 2020 Demand for workers outside Los Angeles 1, Average Workers per HH Average HH size Total Potential Population Impact ,592 1,858 0 POLB Population Impact 2030 Demand for workers outside Los Angeles Average Workers per HH Average HH size Total Potential Population Impact ,977 1,404 1,331 Historically, most people choose to live close to where they work. This study assumes that new employment at the port drawn from outside Los Angeles will not diverge from that behavior. Therefore, the estimated population impacts were distributed according to historic commute patterns (as derived from the U.S. Bureau of Census Transportation Planning Package). The results for the proposed Project show that by 2030, 870 people may choose to reside in the Gateway cities, 494 would choose to reside elsewhere in Los Angeles (non-gateway cities), and that 613 people may reside outside of Los Angeles as a result of the proposed project (See Table 9). Distribution of population impacts that result from the Two-Berth Alternative show that by 2030, 618 people may choose to live in the Gateway cities, 351 would reside elsewhere in Los Angeles, and 435 would reside outside the. The Multi-Use Storage Alternative would result in no population impacts through 2020, however in the following decade, 585 people would choose to reside in the Gateway cities, 333 would reside elsewhere in Los Angeles and 412 would reside outside the. Draft POLB Pier S Labor Market Study Page 20

22 TABLE 9: Distribution of Population Impacts Three- Berth (Proposed Project) Alternatives Two-Berth Multi-Use Storage Distribution of Population Impacts: 2013 Total Los Angeles (69%) 1,194 1,194 0 Gateway cities (44%) Los Angeles, non-gateway cities (25%) Total outside Los Angeles (31%) Distribution of Population Impacts: 2020 Total Los Angeles (69%) 1,788 1,282 0 Gateway cities (44%) 1, Los Angeles, non-gateway cities (25%) Total outside Los Angeles (31%) Distribution of Population Impacts: 2030 Total Los Angeles (69%) 1, Gateway cities (44%) Los Angeles, non-gateway cities (25%) Total outside Los Angeles (31%) Totals may not sum to total population impacts due to percent rounding. The Proposed project is expected to add 5,239 new port industry jobs to Los Angeles by 2030, of which 907 would be filled by workers outside the. A majority of these workers are expected to relocate to Los Angeles with the largest share migrating to the Gateway Cities, which is expected to add 870 more residents as a result of the Port expansion, or approximately 44 percent of the total new population. An additional 494, or 25 percent, of the new workers are expected to relocate to non-gateway cities in Los Angeles. The Two-Berth Alternative is expected to add 3,871 new port industry jobs to Los Angeles by 2030, of which 644 would be filled by workers outside the. Of the workers that are expected to relocate to Los Angeles, 618 are expected to move to the Gateway Cities and 351 are expected to move to non-gateway cities in Los Angeles. The Multi-Use Storage Alternative is expected to add 5,361 new port industry jobs to Los Angeles by Of these jobs, an estimated 610 will be filled by workers outside the, many of which will choose to relocate to Los Angeles. 585 residents are expected to relocate to the Gateway Cities and another 333 are expected to relocate elsewhere in Los Angeles (non-gateway cities). Draft POLB Pier S Labor Market Study Page 21

23 Model Instructions The overall objective of the model is to determine the population impact on the Gateway Cities as a result of the Pier S expansion. Within the model, this is calculated through three clear steps. The first step converts industry category employment counts from SIC categorization to NAICS categorization (Tables A C). Next, the model utilizes historical employment data to determine what proportion of the Pier s projected jobs can be filled by Los Angeles residents, and what proportion would need to be filled by those outside the (Table D). Finally, using demographic data and commuting pattern trends, the model determines the projected population impact on the Gateway Cities (Table E). For the purposes of clarity, the model includes a legend which outlines the color-coding system utilized within the various worksheets. The color coded system is shown in Table 8. There are two types of data that are categorized by color. The first distinguishes the data that is fixed, and should not be altered in the future, and data that can be changed in any future updates of the model. The other categorization is by source of data, with a classification that indicates given assumptions (from an external source), internal calculations, and calculations or projections done by an external source. TABLE 10: Model Color-Coding System Code Fixed Inputs Changeable Inputs Given Assumptions (from external source) Internal Calculations External Calculations Color Converting POLB Job Impact Estimates from SIC to NAICS The Port of Long Beach s economic impact analysis for the Pier S expansion produces employment estimates categorized according to the Standard Industrial Classification (SIC) system. In 2002, the North American Industry Classification System (NAICS) replaced the SIC system. NAICS is used exclusively by the U.S. Census Bureau, California Economic Development Department, and the Bureau of Labor Statistics. Therefore, the employment categories need to be converted from SIC to NAICS for the purposes of collecting current and historical employment data from the Federal, State, and regional sources and for projecting future employment growth. The steps for converting the POLB job impacts from SIC code to NAICS are relatively simple and depend on Tables A through C in the model. The primary step is to populate Table A, SIC to NAICS Input, with the impact estimate (column B) associated with each SIC code (column A). This will automatically populate Tables B and C. Table B, NAICS Conversion, converts the impact estimate from SIC to NAICS using the methodology described in the paragraphs below. As 2-digit SIC series correspond with multiple 3-digit NAICS codes, some 3-digit NAICS codes appear multiple times in Table B. Therefore, Table C sums employment estimates falling under the same NAICS code. The end result in Table C is the total employment impact estimates (column E) by 3-digit NAICS code (column A). The values in column E will need to be inserted into Table D, Employment, as described in the step 2 of Column Inserts. Draft POLB Pier S Labor Market Study Page 22

24 Table B, NAICS Conversion, shows ratios of employment from the 2-digit SIC series to the corresponding NAICS 3-digit series. The table was prepared using ratios from the first quarter 2001 data of the Quarterly Census of Employment and Wages Program (CES) and was used to evaluate the correspondence between SIC and NAICS. For example, for CES SIC Series 4200 Trucking and Warehousing, approximately 74.6 percent of the employment will go to NAICS series 484 Truck Transportation, 10.2 percent to 493 Warehousing and Storage, 6.7 percent to 492 Couriers and Messengers, 5.3 percent to 562 Waste Management and Remediation Services, and 1.6 percent to 531 Real Estate. Ratios may not add up to 100 percent for an SIC series because ratios less than one percent were excluded; as a small percentage of jobs are lost in the conversion, the POLB s job impact estimates by SIC code are greater than the estimate by NAICS code. 6 Not all NAICS industries were published by the CES, specifically government and the majority of agricultural industries. Therefore, the 2-digit SIC series (91 97) related to government employment is converted to the NAICS 2-digit series (92). Also, as the EDD does not provide an associated NAICS code for farm employment in their 2016 projections, most SIC series related to agriculture (01 06 and 08 09) are grouped under the category farming and are not associated with a 2- or 3-digit NAICS code. 7 Finally, EDD s historic employment estimates and 2016 projections combine the 2-digit NAICS code, 21, with the 4-digit NAICS code, 1133, for Natural Resources and Mining. Therefore, though the SIC to NAICS conversion is available at the 3-digit NAICS code for related industries through the CES, 3-digit NAICS industries beginning with 21, as well as industry 113 are combined under Natural Resources and Mining. The POLB employment impact projections also group certain SIC series together, namely Museums/botanical and zoological gardens (84) and Membership organizations (86). The CES provides SIC to NAICS employment ratios for both SIC 84 and SIC 86. However, the employment distribution between SIC 84 and SIC 86 is unknown. As 99.4 percent of SIC 84 employment is equivalent to NAICS 712 and 95.7 percent of SIC 86 employment is equivalent to NAICS 813, the 2008 employment distributions for NAICS 712 and NAICS 813 provided by the EDD are used to approximate the split of SIC into NAICS 712 and 813 (93 percent in 813 and 7 percent in 712). Model Inputs Tables A through C of the model are necessary to convert the POLB employment impact estimates from SIC to NAICS code, but the model s main inputs are contained in Table D, Employment. The first inputs to Table D were the EDD historical employment data by 3-digit NAICS category, which for the purposes of this study go back to 1998, providing a ten-year perspective and at least one recession and economic boom year, 2000 and 2001 respectively. This can be seen in columns EDD Historical Data of Table D. Also included are relevant demographic indicators, including the rows Population, Population for those aged 20 64, and the Civilian Labor Force. Table E, Employment Thresholds, is used to determine which categories in the Table D will pass its maximum threshold (as indicated by the maximum level reported for the years between ). The column Max indicates the maximum level for each category for that period. The subsequent yearly labeled columns indicate if the maximum is expected to be surpassed in future years. Those cells highlighted in green and containing the digit 1 are years in which the industry category exceeds the maximum threshold. Thus, those categories with this indication would show population impacts for the Los Angeles, as the labor force levels are expected to reach a point where there is no room in the local labor market to fill the Pier s labor requirements. 6 A total of 83 jobs were lost through the SIC to NAICS conversion. 7 The exception is SIC series 07, Agricultural Services. The CES does provide ratios for SIC series 07, and employment estimates for all NAICS industries associated with SIC series 07 are provided by the EDD. Draft POLB Pier S Labor Market Study Page 23

25 Using the results of Table E, column Jobs filled by non-la residents in Table D indicates which categories require an import of labor and tabulates the amount of new labor required. These estimates are developed for each horizon year, 2013, 2020, and Column Inserts It is anticipated that POLB staff will update the model with new or updated data EDD information 8. The following will outline the procedure to update the model: 1. Once the employment data for a year is released in the future, it can directly replace the EDD estimates within the spreadsheet. Thus, once latest year s employment data is released by the EDD it should be added as an additional column to the right of last year s employment data. At the same time, the modeler should delete the earliest year as the model assumes labor availability within a given NAICS category only remains available for up to 10 years. 2. Any future updates to the economic impact model that would yield new Pier S job impact estimates can replace current estimates in columns titled POLB Job Impact. Firstly, any new job impact estimates need to be converted from SIC to NAICS using the Table A, SIC to NAICS input. After the results are given in the Table C, Summary Conversion, this can replace the current job impact estimates in columns POLB Job Impact in Table D, Employment. In the screenshot below, these replaceable cells are highlighted. 3. It is expected that with the release of the 2010 U.S. Census, the current demographic assumptions regarding average household size per worker and commute behavior will change. Updates to Average Workers per Household and Average Household Size for Los Angeles can be inserted into the respective cells in Table E, Population Impacts, which are the highlighted cells in the screenshot below. 8 EDD data available online at SCAG data available upon request to internal economists. Draft POLB Pier S Labor Market Study Page 24

26 Population and Housing Impacts: Preferred Alternative Jobs filled by non-la county residents (cumulative) 794 1, Average Workers per HH Average HH size Population Impact (cumulative) 1,730 2,592 1,977 Housing Demand Impact (cumulative) Updates to employed persons to population To assess the migration impacts of new workers for each alternative, AECOM estimated the average population per employed resident. The number of residents per household generated per employed resident was determined by using the U.S. Census Bureau s Percent Public Use Microdata Sample (PUMS). In previous censuses, most households received a short-form questionnaire, while one household in 20 received a long form that contained additional questions and provided more detailed socioeconomic information about the population. PUMS is data that was collected from the long form. The 2010 Census differs from the 2000 Census because the long form will no longer exist. The 2010 Census will be a short-form only census. It will only count residents living in the United States, as well as ask for name, sex, age, date of birth, race, ethnicity, relationship and housing tenure. The more detailed socioeconomic information is now collected through the American Community Survey. The survey provides current data about community every year, rather than once every 10 years. It is sent to a small percentage of the population on a rotating basis throughout the decade. No household will receive the survey more often than once every five years. Updates to the model incorporating 2010 Census data will necessitate collecting and analyzing PUMS data from American Community Survey data, rather than the 2010 decennial census data, and replacing rows 7 and 8 in Table E, Population Impacts, with the updated values. Draft POLB Pier S Labor Market Study Page 25