Measuring industry employment, 1990–2018: a look at the auxiliary-unit concept

The North American Industry Classification System (NAICS) replaced the Standard Industrial Classification (SIC) system in 1997. Since the change, some analysts have expressed concerns about the elimination in NAICS of the concept of auxiliary units, which are now classified with other worksites that perform similar functions. This article examines how employment trends by broad industry groups would have differed over the past few decades if the auxiliary-unit concept had been used to estimate employment in those units as it was in the SIC system. In the United States, Canada, and Mexico, businesses (and hence business employment) are classified and reported in industries according to the North American Industry Classification System (NAICS).1 NAICS was implemented in the United States in 1997, replacing its predecessor, the Standard Industrial Classification (SIC) system. A major criticism of this change, over time, has involved the treatment of auxiliary units.