California Department of Resources Recycling and Recovery (CalRecycle) 

Local Government Central

How Do Alternative Employment Measures Affect Diversion Rates?

Note: This page contains historical information from CalRecycle’s statewide goal measurement prior to 2007 that estimated a diversion percentage. For 2007 and subsequent years, CalRecycle compares reported disposal tons to population to calculate per capita disposal expressed in pounds/person/day. This new goal measurement system is described the Board's Goal Measurement: 2007 and Later web page.

Introduction

Alternative employment measures exist because employment is measured in different ways and by different organizations. Because California cities and counties are variable, different employment factors may better reflect the impact of employment growth on waste generation. Small jurisdictions, jurisdictions with a high proportion of non-residential waste, and jurisdictions with employment growth significantly greater than countywide growth have been interested in whether alternative employment factors are more accurate for estimating changes in waste generation.

Prior to the 2001 report year, the Board used only the California Employment Development Department's (EDD's) countywide Labor Force Employment (LFE) as its default factor for employment in the Adjustment Method formula. LFE is an estimate of the number of employed individuals residing within the boundaries of a county or metropolitan statistical area. LFE was used because it was readily available for all years and all counties.

One alternative to LFE is EDD's countywide Industry Employment (IE). IE is an estimate of the number of individuals employed at workplaces within the boundaries of a county or metropolitan area defined by the Bureau of the Census. Using LFE or IE as default factors in the adjustment method formula does not require statutory or regulatory change. It implements a Board-approved recommendation (reference # ACC 8) in the Board's November 13, 2001 Report to the Legislature: A Comprehensive Analysis of the Integrated Waste Management Act Diversion Measurement System (SB 2202 Report).

Beginning with the 2001 report year, the default employment factor used in the adjustment method is countywide LFE or countywide IE, whichever reflects a higher employment growth rate. However, jurisdictions may use either one.

This discussion paper compares the potential 2001 diversion rate impacts of employment factors other than LFE. It is not an accuracy test but is an observation of what happens to 2001 diversion rates when a different employment factor is substituted for LFE.

Background

State law required the Board to establish a standard methodology to annually estimate jurisdiction waste generation tonnage. The adjustment method was developed in the early 1990's under the guidance of a working group that examined many factors related to waste generation. After extensive statistical analysis, the adjustment factors selected were: population, employment, and Consumer Price Index (CPI)-adjusted taxable sales.

These factors have been used since 1995 to estimate report-year generation by adjusting base-year generation tonnage for population and economic growth since the base year. Estimated report-year generation is then compared to report-year disposal tonnage to determine a disposal rate, and then its opposite, a diversion rate. For example, 40,000 tons disposed compared to 100,000 tons generated equals 40% disposal and 60% diversion.

Population and taxable sales adjustment factors are available at jurisdiction and countywide measurement levels. LFE is available by county. IE is available by county except Inyo and Mono prior to 1992 and Fresno and Madera prior to 1993. CPI is available statewide and for three metropolitan areas: (1) San Francisco-Oakland-San Jose, (2) Los Angeles-Riverside-Orange County, and (3) San Diego.

Data sources and measurement levels for default adjustment method factors are:

Adjustment Method Factor Source Measurement Level
Population California Department of Finance Jurisdiction and countywide
Employment: Labor Force and Industry California Employment Development Department Countywide
Taxable Sales California State Board of Equalization Jurisdiction and countywide
Consumer Price Index U.S. Department of Labor Three metropolitan areas

California Department of Industrial Relations

Statewide

Alternative Employment Factor Diversion Rate Impact

This discussion paper compares the potential diversion rate impact of three alternatives to LFE:

  • Industry Employment (IE)
  • U.S. Department of Commerce, Bureau of Economic Analysis (BEA), Industry employment
  • a combination using Labor Force Employment (LFE) in the residential generation estimate, and IE in the non-residential generation estimate

The 2001 diversion rate impact of IE compared to BEA Industry employment is also examined. All comparisons use Board-approved base years and 2001 as the report year.

EDD Labor Force Employment vs. EDD Industry Employment

LFE reflects employment of individuals by "place of residence," whereas IE reflects jobs by "place of work." According to EDD's web page, Employment--Why Two Different Numbers? :

"...the number of jobs we report for Civilian Employment [LFE] differs from the number of jobs reported for Total Industry Employment [IE]."

For example, in Ventura County, where a large portion of the residence population commutes to Los Angeles County to work, LFE can be almost 100,000 people higher than IE.

The 2001 diversion rate impact of substituting IE for LFE is:

Diversion Rate Number of Jurisdictions Percent of 428 Jurisdictions
no change 129 30.1
+ 1 % 134 31.3
- 1 % 42 9.8
+ 2 % 69 16.1
- 2 % 24 5.6
+ 3 or more % 29 6.8
- 3 or more % 1 0.2
Total 428 99.9*
*Does not equal 100.0 due to rounding

The above and three following tables display the diversion rate estimate difference in terms of maximum diversion rate change. Of 428 jurisdictions [1] compared, about 54 percent would benefit by at least 1 percentage point using IE.

Does IE help "small" [2] jurisdictions? Of 29 jurisdictions with a diversion rate difference of +3 percent or more, about 52 percent are "small" in terms of report-year disposal, and about 48 percent are "small" in terms of report-year population.

EDD Labor Force vs. BEA Industry

Industry employment reflects jobs by "place of work."

The 2001 diversion rate impact of substituting BEA Industry employment for LFE is: 

Diversion Rate Number of Jurisdictions Percent of 428 Jurisdictions
no change 166 38.8
+ 1 % 102 23.8
- 1 % 66 15.4
+ 2 % 33 7.7
- 2 % 24 5.6
+ 3 or more % 27 6.3
- 3 or more % 10 2.3
Total 428 99.9*
*Does not equal 100.0 due to rounding

Of 428 jurisdictions [1] compared, about 38 percent would benefit by at least 1 percentage point using BEA Industry employment.

Does the alternative BEA Industry employment factor help "small" [2] jurisdictions? Of 27 jurisdictions with a diversion rate difference of +3 percent or more, about 56 percent are "small" in terms of report-year disposal, and about 44 percent are "small" in terms of report-year population. 

EDD Industry Employment vs. BEA Industry Employment

This comparison is of two different measures of employment by "place of work." If the measures are identical, there should be no diversion rate differences. The 2001 diversion rate impact of substituting BEA Industry employment for IE is:

Diversion Rate Number of Jurisdictions Percent of 428 Jurisdictions
no change 238 55.6
+ 1 % 23 5.4
- 1 % 154 36.0
+ 2 % 0 0.0
- 2 % 10 2.3
+ 3 or more % 1 0.2
- 3 or more % 2 0.5
Total 428 99.9*
*Does not equal 100.0 due to rounding

While the results are very similar, the two employment measures are not identical. Of 428 jurisdictions [1] compared, about 6 percent would benefit by at least 1 percentage point using BEA instead of IE. 

EDD Labor Force Employment vs. EDD Labor Force Employment for Residential Estimate/EDD Industry Employment for Non-residential Estimate

If IE is a more accurate employment measure for the non-residential portion of a waste stream, then it may be appropriate to apply it only to the non-residential portion of the calculation. This enhancement to the adjustment method formula was adopted with adjustment method regulations revisions effective January 1, 2006. Using LFE as the default or baseline, we compare the 2001 diversion rate impact of applying LFE to the residential, and IE to the non-residential, portions of a waste stream in the following table:

Diversion Rate Number of Jurisdictions Percent of 428 Jurisdictions
no change 172 40.2
+ 1 % 138 30.2
- 1 % 47 11.0
+ 2 % 47 11.0
- 2 % 10 2.3
+ 3 or more % 14 3.2
- 3 or more % 0 0.0
Total 428 99.9*
*Does not equal 100.0 due to rounding

Of 428 jurisdictions [1] compared, about 46 percent would benefit by at least 1 percentage point using IE for the non-residential estimate and LFE for the residential estimate.

Summary

EDD Industry employment (IE) and BEA Industry employment are two alternatives to EDD Labor Force employment (LFE). Using these alternative 2001 countywide employment measures increases 2001 diversion rate estimates for many jurisdictions. The increase is one or two percentage points for about 30 percent to 47 percent of jurisdictions, and three or more percentage points for about 6 percent to 7 percent of jurisdictions. Although about one third of California's jurisdictions are considered "small," about half of the jurisdictions with a three or more percentage point increase were "small." While 2001 IE is similar to 2001 BEA Industry employment, they are not identical. Adjustment method regulations revisions to allow use of LFE with the residential and IE with the non-residential portion of the estimate would have increased 2001 diversion rate estimates one or two percentage points for about 40 percent of jurisdictions, and three or more percentage points for about 3 percent of jurisdictions.


Footnotes

[1] Data for 10 jurisdictions was excluded due to negative diversion rates, or because the jurisdiction is newly incorporated and does not have a Board-approved base year. A negative diversion rate is the result of an incorrect base-year generation amount, or an incorrect report-year disposal amount, or both. Both city level and county level factors were used in determining the highest estimated diversion rate for both default and alternative factor calculations.

[2] Based on Disposal Reporting System analyses in the SB 2202 report, a "small" jurisdiction has 2001 report-year disposal below 25,000 tons, and/or population below 25,000. Of 428 jurisdictions, 35 percent (155) meet the small disposal criterion, and 37 percent (161) meet the small population criterion.

Last updated: December 23, 2011
Local Government Central http://www.calrecycle.ca.gov/LGCentral/ 
Local Assistance & Market Development: LAMD@calrecycle.ca.gov (916) 341-6199