The Bureau of Labor Statistics has been so underfunded, for so long, that it has been forced to propose cuts to the vital Current Population Survey. Congress cannot allow that to happen, writes Priscilla Sims Brown, of Amalgamated Bank.
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In September, theFederal Reserve took the important step ofcutting interest rates for the first time in over four years. As the CEO of a financial institution, I recognize the impact of this move on the people I serve and the many Americans who have struggled with higher costs and inflation. These rate cuts will allow banks to empower organizations and individuals to advance positive social change by helping us get more affordable loans to changemakers.
To come tothis important decision, the Federal Reserve utilized many data points, including a key one we use to understand our nation's economy — the U.S. monthly unemployment rate. Today, that rate was released for the month of September, allowing businesses to make informed decisions about hiring, layoffs and borrowing. As a banker, I recognize that the market is highly sensitive to minor changes in this rate, which can make global financial markets fluctuate. However, the data we and the Federal Reserve use to make these important decisions is at risk.
Unfortunately, the survey this data is collected from, called the Current Population Survey, or CPS, has beenwoefully under-resourced. After more than a decade of decline, the Bureau of Labor Statistics, or BLS, has been forced to propose cuts to the CPS sample, which informs our monthly employment report, inflation numbers, wage gap statistics and more — starting as soon as January.
Whether you're applying for a job,buying a house or applying for asmall-business loan to open the mom-and-pop restaurant of your dreams, this cut will have very real effects. This further exacerbates declining survey response rates post-pandemic. Fewer respondents mean this data is less reliable, and less informative.
Federal Reserve chair Jerome Powell flagged a recent upward revision to income and savings data as a sign of economic strength. He said the information could factor into the central bank's monetary policy discourse during the Fed's next interest rate meeting in November.
We risk losing demographic and geographic detail that allows us to see how specific populations are doing, whether veterans,minority populations,women orpeople with disabilities. The smaller the community, the greater the risk. Whether it's a female veteran planning for her future or anIndigenous-owned business located in a geographic area hit hard byclimate change, our inability to see the employment data at the intersections of these demographics and geographic regions makes it more difficult to determine where our resources are most needed.
Thankfully, there is a clear solution: Congress can fund the BLS. Arecent letter penned by two former BLS commissioners, appointed by Republican and Democratic presidents, lays out how this issue could be fixed by just $20.6 million. That's less than 13 cents perworking adult.
The continuing resolutionrecently passed by Congress provided $6 million in funding, which is a start; but it expires in December, so I'm sounding the alarm, and I invite other businesses to join me.
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