LEMA’s analytical methodology is based on FAPRI’s internationally recognized baseline process.  FAPRI is recognized as a world leader in agricultural economic modeling.  The United States Congress has relied on FAPRI’s agricultural models and baseline process for more than twenty years in developing and assessing national and international agricultural policy.

The baseline process creates reliable economic models by subjecting the model’s underlying economic theory to practical criticism.  This occurs when FAPRI invites comment and criticism from a sample of experts in the target market. The feedback obtained is an essential element of the baseline process as it provides a “real-world” guidepost in developing industry outlooks while refining the underlying analytical system.  This ongoing collaboration between the market and the analyst is the focus of LEMA’s econometric process and the annual baseline conference.

 LEMA’s Board of advisors provides invaluable expertise and support for the modeling and baseline process.  The advisory board is comprised of a variety of members representing the public and private sectors.  Public sector members consist of federal, state, and local elected officials, policy makers, and community leaders. Private sector members represent businesses and labor unions of small, medium and large sizes with various levels of technological-based characteristics.  This diverse mix of contributors assures that businesses and unions representing varied skill requirements are represented.

LEMA’s Board of Advisors identifies specific goals and objectives for research and modeling.  Once these targets are chosen, the Board members nominate staff from their respective entities to serve on LEMA’s Econometric Committees. The Econometric Committees correspond to specific industry sectors, pairing operational executives with labor markets that are within their field of aptitude and command. These committees assist LEMA in its modeling initiatives by identifying key labor market variables that drive employment and wages in their specific industries. LEMA assesses the information provided by the committees, and based on this input, further refines the model estimations and prepares them for final review at LEMA’s baseline conference.

---

The LEMA Baseline Conference

The LEMA modeling process culminates in its annual baseline outlook of selected regional labor markets.  These baseline outlooks incorporate and reflect both the criticism and feedback from the private and public sector participants who are invited to the annual baseline conferences.  This assistance is essential to the successful estimation and refinement of the models.  As a result of this process, relevant market factors that might have been overlooked are identified by experienced market participants and then selectively incorporated into the model by LEMA’s econometric team. 

As part of this process, LEMA invites leaders from the business, labor, education, academic, economic development, and social services communities.  At the conference, LEMA asks each participant to respond to the model and its outlooks in order to offer constructive criticism of aspects of the modeling process that may concern the participant.  LEMA will then analyze all comments received, after which time suggested improvements are selectively adopted by LEMA’s econometric staff.  Each baseline conference affords workforce leaders the opportunity to: 

• Review LEMA’s baseline outlooks and projections
     

• Receive comments and criticism regarding the economic assumptions incorporated into the model, and examine suggestions for specific improvements
   

• Discuss local, state, national, and international trends and events that may influence a regional economy

LEMA hosted its first Baseline Review Conference at UM-St. Louis on November 6, 2001; more than 100 representatives from business, labor, academe, and government attended the conference. The conference participants actively engaged the LEMA staff by critiquing the models and employment projections, while offering numerous suggestions for their improvement. While many attendees expressed concern regarding the September 11 terrorist attacks and their effect on overall regional employment and economic growth, most if not all brought industry-specific knowledge to the table, thus providing LEMA’s staff with a wealth of ideas for improving the models and employment projections.

As a result, LEMA has once again re-specified and re-estimated its industry models. Updated GNP/GDP forecasts have been incorporated into the models following September 11, as well as selected suggestions from our conference participants. In particular, LEMA staff tempered many of the employment projections that were identified as overly optimistic by the conference’s participants. This interplay between analyst and conference participant demonstrates a core benefit of the annual baseline review methodology: the marriage of economic theory to practical experience. This ongoing dialogue increases the validity of the models and the reliability of their employment projections. Then in June of 2002 LEMA published the entire set of baselines in its LEMA’s 2002 Annual Baseline Report. The first annual report was distributed to 600 community leaders in the St. Louis region.
 

---

Current Progress

LEMA established its main office at The University of Missouri-St. Louis’ Regional Center for Education and Work (RCEW). The RCEW is affiliated with the College of Education. The RCEW creates and encourages partnerships among the workforce development community in the St. Louis region.  For example, the RCEW houses the School to Work Network for the St. Louis region and Pathfinders, an information system linking employers with educators.

The RCEW is a founding partner of the Work Keys Alliance of Business, Labor and Education known as WorkABLE. WorkABLE is a consortium among the RCGA, St. Louis Labor Council, the University of Missouri Extension Service, and other business, government, and community organizations.  The consortium uses a national assessment system to profile, access, and to teach critical workplace skills. Furthermore, the RCEW partners with the UM-St. Louis Continuing Education Programs, including the multidisciplinary labor studies program and the Division of Educational Leadership and Policy Studies at UM-St. Louis’ College of Education.

LEMA also established its Board of Advisors and Econometric Committees. These Boards and Committees represent a broad spectrum of the regional workforce community. 

LEMA established a partnership with the Council for Educational Advancement (CEA), a not-for-profit organization that comprises certain superintendents of St. Louis area public, private and parochial schools.  The CEA’s mission, in part, is to develop a common curriculum for its members’ schools.  The CEA has and will continue to make substantial contributions to the development of LEMA’s labor supply model. CEA econometric committee members met monthly to discuss and explore issues important to K-12 education.  These members first identified then agreed to a set of education related variables that determine educational success in K-12 schools.  The next step was development of a basic econometric model for K-12 education.  This model represents the first step in adapting our baseline process to the education and supply component of the LEMA labor market model.