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Friday, February 28, 2014

'Death of a Statistic'

Tim Taylor:

Death of a Statistic, by Tim Taylor: OK, I know that only a very small group of people actually care about government statistics. I know I'm a weirdo.  I accept it. But data is not the plural of anecdote, as the saying goes. If you care about deciphering real-world economic patterns, you need statistical evidence. Thus, it's unpleasant news to see the press release from the US Bureau of Labor Statistics reporting that, because its budget has been cut by $21 million down to $592 million, it will cut back on the International Price Program and on the Quarterly Census of Employment and Wages.

I know, serious MEGO, right? (MEGO--My Eyes Glaze Over.)

But as Susan Houseman and Carol Corrado explain, the change means the end of the export price program, which calculates price levels for U.S. exports, and thus allows economists "to understand trends in real trade balances, the competitiveness of U.S. industries, and the impact of exchange rate movements. It is highly unusual for a statistical agency to cut a so-called principal federal economic indicator." As BLS notes: "The Quarterly Census of Employment and Wages (QCEW) program publishes a quarterly count of employment and wages reported by employers covering 98 percent of U.S. jobs, available at the county, MSA [Metropolitan Statistical Area], state and national levels by industry." The survey is being reduced in scope and frequency, not eliminated. If you don't think that a deeper and detailed understanding of employment and wages is all that important, maybe cutting back funding for this survey seems like a good idea.

These changes seem part of series of sneaky little unpleasant cuts. Last year, the Bureau of Labor Statistics saved a whopping $2 million by cutting the International Labor Comparisons program, which produced a wide array of labor market and economic data produced with a common conceptual framework, so that one could meaningfully compare, say, "unemployment" across different countries. And of course, some of us are still mourning the decision of the U.S. Census Bureau in 2012 to save $3 million per year by ending the U.S. Statistical Abstract, which for since 1878  had provided a useful summary and reference work for locating a wide array of government statistics.

The amounts of money saved with these kinds of cuts is tiny by federal government standards, and the costs of not having high-quality statistics can be severe. ...

I wish I had some way to dramatize the foolishness and loss of these decisions to trim back on government statistics. ...

It won't do to blame these kinds of cutbacks in the statistics program on the big budget battles, because in the context of the $3.8 trillion federal budget this year, a few tens of millions are pocket change. These cuts could easily be reversed by trimming back on the outside conference budgets of larger agencies. But all statistics do is offer facts that might get in the way of what you already know is true. Who needs the aggravation?

Yes, no sense letting actual facts get in the way of what people just know is true...

    Posted by on Friday, February 28, 2014 at 07:22 AM in Economics | Permalink  Comments (26)

          


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