Sometimes we post articles on topics few people are interested in.
This is such an article.
But you should be interested because the economic and labor data collected by government agencies no longer provide the information we need to properly understand and manage the U.S. economy.
Over the past week several sources explained the problems with government data collection efforts and made suggestions on how to improve them.
Before we go into them, it's important to note both sources state the biggest problem is we've been cutting the budgets of our statistical agencies for years.
This has hamstrung their efforts to develop new and better approaches to collecting and disseminating data.
Infrastructure: Upgrading the US labor statistics system is a podcast by Harvard's Future of Work program. It features former U.S. Bureau of Labor Statistics Erica Groshen, who explains how and why we should improve our economic data gathering capabilities.
Federal Statistical Needs for a National Advanced Industry and Technology Strategy is a report from the D.C. innovation think tank ITIF. The key takeaways from this report are:
- The federal government has never felt the need to develop strategic economic intelligence to fully understand the competitive position of its traded sectors or to help support overall economic productivity.
- Years of budget constraints have left U.S. statistical agencies with insufficient resources to effectively measure key elements of the economy.
- There are three key areas with major statistical gaps: subnational data, international data, and data to better understand firm behavior at the enterprise and establishment level.
- As part of a national infrastructure package, Congress should make a one-time appropriation to fully modernize and expand federal statistical agency IT systems. It should then increase annual funding on an ongoing basis.
The lack of timely and complete data on the economy has become a problem for the U.S.
We regularly see this in our work. For example, there's still no solid government data on independent workers and most government data on small businesses are too old by the time it's released to be of use.
The economy moves too quickly and changes too often for our old data collection methods. It's time for the U.S. to make the investment required to collect timely and relevant economic data.
