Congress Urged to Boost Funding for US Labor Survey

Molly Smith
4-min read

(Bloomberg) -- A group led by former Bureau of Labor Statistics officials is urging Congress to provide an additional $20 million for the agency to bolster a critical labor-market survey they say is “on budgetary life support.”

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More than 100 businesses and organizations — including Harvard University, Brookings Institution and Haver Analytics — signed a letter Tuesday to the House and Senate Appropriations committees asking for funds to maintain the sample size of the BLS’s Current Population Survey — which is at risk of being cut — and to support steps to modernize data collection techniques.

“Since collecting labor market information from fewer people will endanger the reliability of metrics such as national unemployment and labor force participation, this step is a last resort that has been delayed for as long as possible by exhausting all other available means,” wrote Erica Groshen and William Beach, two former BLS commissioners who run Friends of BLS, an independent group that organized the letter.

Current BLS Commissioner Erika McEntarfer said in June that the sample size of the CPS — which provides information for the household survey of the government’s monthly jobs report — would be cut next year due to budget constraints. She noted at the time there’s a “real risk” of a decline in quality, especially as response rates have declined substantially in recent years.

“We were made aware of the letter and read it with interest,” said a spokesman for the Department of Labor, which is the parent agency of the BLS.

The letter says that cutting the sample size will make the survey’s statistics less reliable and risks the BLS’s ability to publish data on smaller racial and ethnic groups. More importantly, it says the money is needed to help the BLS and Census Bureau — which team up to produce the CPS — introduce an Internet-based response mode, which can be done in just three years contingent on funding.

The US has failed to allocate those resources “for several decades,” according to the letter. When adjusted for inflation, overall BLS funding has fallen by over 20% from a high in 2010.

A similar letter is being circulated by former staff of the White House’s Council of Economic Advisors. It has already obtained signatures from Ben Bernanke, Jason Furman, Glenn Hubbard, Joseph Stiglitz and Michael Boskin, according to Aaron Sojourner, who served as a senior CEA economist during the Obama and Trump administrations.

“That whole year was a huge education for me about the importance of the federal statistical system,” Sojouner said in an interview. “I used the data for research and read the news but didn’t really understand what a huge public good those agencies produce every month.”

What Bloomberg Economics Says...

“A major guidepost for economic policy making could be jeopardized if robust solutions aren’t developed quickly. Modernizing the survey to ensure its long-term viability will require resources that would need funding from Congress.”

— David Wilcox. To read the full note, click here

House leaders unveiled a stop-gap spending bill Sunday that includes a short-term $6 million boost for the CPS, which Congress is expected to pass by the end of the week. The bill keeps most federal programs flat-funded until late December to give negotiators more time to reach a full-year deal, and the BLS’s extra funding suggests lawmakers see a more urgent need at the agency.

Earlier, House Republicans had proposed a flat full-year budget for the BLS of $698 million budget, while President Joe Biden has sought a $15 million boost.

The BLS and Census have tried every other cost-cutting measure, such as reducing in-person interviewing and limiting follow-up with those who don’t respond, but it won’t be enough to keep the sample at 60,000 households. BLS would cut that by 5,000 starting early next year absent additional funding.

The CPS is the primary source of data on the US labor market, which informs employment and wage figures broken down by geography, race, gender, age, educational attainment and more. The survey also tracks several other trends over time, like how old women are when they have their first child and how many people in the country have health insurance.

For nonprofits like Zero to Three, which lobbies for economic policies that impact young children and signed the letter, the CPS is a crucial resource that can tell the kind of household infants and toddlers are living in — like if they have at least one working parent but are still in poverty, or if they qualify for support such as the Child Tax Credit.

“For anybody who works with Congress, the first thing they want to know when you walk in the door is if you have data broken down by state,” as well as other demographics like race, gender and income, said Patricia Cole, the organization’s senior director of federal policy. “Having these reliable databases like the CPS is really critical to do that.”

--With assistance from Steven T. Dennis and Megan Scully.

(Updates with additional background info in eighth paragraph)

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