Minnesota economists, researchers fear politicization of jobs data

Minnesota economists and researchers say the Bureau of Labor Statistics remains a gold standard for economic data, but some worry President Donald Trump’s recent firing of the agency’s commissioner could erode trust in future data, even if it remains an accurate source of information for businesses and economic decision makers.

The Bureau of Labor Statistics is one of a constellation of government agencies that collect, analyze, interpret and publish economic data. Its publications include key reports on inflation, unemployment, wages and job creation, based on tens of thousands of monthly survey responses from households and employers.

Those statistics are then used by federal and state agencies, foreign investors, financial markets, businesses of all sizes and individuals to understand the U.S. economy in the moment and over time. 

“Our economic data is something to be proud of,” said Kristine West, a professor of economics at St. Catherine University in St. Paul. “The U.S. government has really good data and has been the gold standard around the world for our data practices.”

Advertisement

The agency employs more than 2,000 economists, survey experts, statisticians and other professional, apolitical civil servants. The only political appointee, who is selected by the president and confirmed by the Senate, is the commissioner, who has little to do with the collection and publication of data. In fact, for most reports, the commissioner only sees the numbers several days before they are made public. Commissioners typically serve four-year terms and, like the heads of other independent agencies like the Federal Reserve, are meant to be protected from termination without cause. 

That’s why the firing of BLS Commissioner Erika McEntarfer last month alarmed some who depend on the bureau’s data. Trump removed McEntarfer after the agency published a report showing that hiring slowed in July and was weaker in May and June than previously reported. 

West, who researches the economics of education, said there is no reason right now to distrust the data, and that academics and analysts have other sources of private data to cross-check and confirm the trends. But real damage may already have been done to its credibility with the public.

Related: What Minnesota’s new data law means for how your personal information is used

“The firing has a sense of a preemptive attempt to sow distrust in the numbers. If you think people will critique policy, the best thing to do is to move the argument to where you and your opponents can’t agree on a common set of facts to argue over,” West said.

Advertisement

The data remains sound, though, and politically manipulating it would be “a near impossibility,” said Tyler Schipper, an associate professor of economics and data analytics at the University of St. Thomas in St. Paul. 

“At every level, an individual is working closely with lots of other statisticians. It would take a sprawling conspiracy, where you try and convince a couple hundred highly educated people that instead of getting the right answer, they should agree on a different answer and tell the outside world that’s the truth. I think that is far-fetched at best,” he said.

BLS data used by businesses, governments, researchers

That’s good, because businesses and individuals rely on BLS data in a host of ways, from deciding when to buy a car to whether to open a business. And how we feel about the economy is influenced by the data that we hear or read from the government and media.

“This is used by elected officials. It’s used by governments at all levels, federal, state and local. It’s used by researchers like me,” said Ryan Allen, associate dean for research at the University of Minnesota’s Humphrey School of Public Affairs. “It’s used by business owners of large corporations and small businesses. It’s incredibly important for understanding the pulse of the economy and where we’re headed.”

States have a large role in collecting, analyzing and interpreting BLS data, explained Angelina Nguyễn, director of labor market information at the Minnesota Department of Employment and Economic Development (DEED), which has an ongoing contract with the federal agency.

DEED also relies on the data for planning and decision making. “BLS data is the main data source that we use” for many projects, she said. This includes producing reports on regional economies, advising policymakers on workforce development and suggesting programs for education institutions to invest in.

The state uses BLS employment and inflation data for its forecasts of future budgets, Schipper said. Cities and counties use the wage and inflation data to know if they need to increase or decrease anything tethered to cost-of-living.

A bigger threat to BLS data than manipulation, economists said, is a shortage of funding and staffing to maintain quality standards. For 30 years, BLS has seen its funding largely remain flat while its operating costs have grown due to wages, technology investments and inflation, West said. 

That long-term trend has been exacerbated since the beginning of the second Trump administration. In real terms, funding is down 15% since 2011, said economist Aaron Sojourner, who served as a senior economist for labor at the White House Council of Economic Advisers during the Obama and first Trump administrations. A further 8% budget cut is expected this year, and many BLS employees have been dismissed or chosen early retirement this year.

Related: Why the federal government is making climate data disappear

The funding shortfalls force BLS to try to produce the same reports with fewer resources. One way to do that is to decrease survey sample sizes. As sample sizes decrease, there is more variation between the preliminary numbers and the revised ones that are updated once more data comes in. That is part of what leads to large revisions, such as those publicized last month.

“Whether you fire multiple people at the top or not, the procedure is the same. So you will keep getting preliminary estimates, and then you will keep getting revisions. And the only way to get more accurate preliminary estimates is to invest more so that we have more data,” said Nguyễn at DEED.

Sojourner, who is now a senior economist at the Upjohn Institute for Employment Research, said he is watching, in particular, if courts allow a rule to be changed that would let the president treat all civil servants like political appointees. That would make them easier to fire and would change the independent nature of many agencies.

“And it’s beyond the Bureau of Labor Statistics,” Sojourner said. “If you look at the entire federal statistical system – Census, Bureau of Economic Analysis, other statistical agencies – nothing like this has ever been done where they fire someone in the middle of their term. The president has the power to remove someone for cause. There’s no cause here.”

The broad hope is that the outcry among economists around the commissioner’s firing may keep the Trump administration from trying to do this again or installing a politicized commissioner who does end up involved in the data analysis process. But ultimately, the only thing to do is wait and see what comes next from BLS and the administration.

Other economic data exists from state and private sources, as well as other federal agencies, but economists said it would be hard to replicate the breadth of what BLS provides and likely would not answer all of the questions BLS currently answers.

“I still believe that the BLS methodology is sound, and this is the best source of data that we can get about the economy,” said West, of St. Catherine. “I can’t think of any other source that is more complete.”

Correction: Aaron Sojourner, a senior economist at the Upjohn Institute for Employment Research, said BLS funding in real terms has declined 15% since 2011. An earlier version of this story misstated the time period, and the institute’s name.

Editor’s note: This article originally appeared on MinnPost and was written by Shadi Bushra, MinnPost’s data journalist. It is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

MinnPost is a nonprofit, nonpartisan media organization whose mission is to provide high-quality journalism for people who care about Minnesota.