About 0.20 percent of the federal budget is used collecting statistics by government agencies. We’re not talking about surveillance or data mining, but the actual work of determining numbers on labor participation rates and other information valuable to business, policymakers, and families.
This information, government collected, is extremely valuable to business. Companies like food store Kroger, chain store Target, and investment house like Charles Schwab use information from research by the American Community Survey or the International Energy Agency to determine prices, where to put their stores and what to fill them with, or how much to anticipate oil prices will rise or fall.
Government data are used in a variety of ways — for instance local cost of living determinations or expected future demand, even demographic data on where to put schools or whether distribution centers like Amazon belong in Dallas or Baltimore.
Yet, data, both the government’s collection of it and private industry research, are getting a bad rap. The surveillance culture has made people wary of data collection. People are sick of being followed on every website they turn by digital advertisements. And government data are recently seen as suspect or twisted to serve a particular political leaning.
But data are vital. Even the Founding Fathers thought so, says economist Michael R. Strain.
America’s desire to collect data for the common good dates back to the founding fathers, when James Madison argued that reliable data on agricultural, commercial and manufacturing interests would allow Congress to represent the interests of its citizens more effectively. Hard numbers would be useful to Congressional debaters “in order that they might rest their arguments on facts, instead of assertions and conjectures.” Indeed, collecting data is a specifically enumerated requirement of government in Article 1 of the U.S. Constitution. …
We’ve come a long way since the 19th century. Today, the modern economy is especially reliant on data, and in this era of “big data,” businesses collect and analyze vast quantities of their own internal data to forecast sales, predict staffing and inventory needs, and weigh all sorts of decisions. The big data revolution is rightly celebrated as a great social and economic achievement. But a firm’s own data are not adequate to serve society’s larger purposes. Instead, private-sector data should be thought of as a fantastic complement to official statistics.
So what’s the big deal? Why should government be responsible for collecting data?
One reason: Consistency. It’s the same information being run year after year and decade after decade. Another: It’s free to everyone to access and use. A third reason: Credibility. The statistical methods and practices are designed to return high quality and impartial data — and to be shielded from political influence.
For example, the Bureau of Labor Statistics, which produces statistics on employment and unemployment, has only one political appointee. The rest are dedicated career civil servants. Helping to maintain that credibility is that many data elements are carefully scrutinized by outsiders, whether the market — which reacts to certain regular data releases as important measures of economic health — or researchers.
Still a fourth reason: Confidentiality. Unauthorized use by government workers is punishable with prison terms while at the same time it can’t be used to prosecute providers of the information. Lastly, the ability to get it done. The public is more willing to respond to “direct requests for information from the government, with its strict confidentiality standards for data, than to a private firm.”
Finally, if government policymakers and lawmakers are going to decide on issues like how taxes are to be spent, it’s good to have data that are accurate.
Of course, when it comes to government, it’s not all rosy. Federal data collection is subject to shortcomings and limitations like the failure to capture information on new trends. Another problem is the refusal of people to participate in the data collection.
But failing to collect the data will never get us to learn where there’s room to make improvements, something we should always expect our government.