Skip to content

How the Obama Campaign (or Any Other Interested Party) Could Have Rigged the Employment Numbers

There has been much debate about whether the September 2012 unemployment numbers are accurate. Were the numbers falsified or manipulated by the Bureau of Labor Statistics? Unlikely. There would have to have been far too many co-conspirators involved for the plan to remain a secret. Could the process have been gamed by someone to make the economy seem like it’s improving just in time for the Presidential election? Quite possibly.

To see how rigging the results is theoretically possible, let’s look at how the 7.8% rate of unemployment was derived. It comes from the “Household Survey Data.” The collection method is described in http://www.bls.gov/cps/eetech_methods.pdf

Statistics on the employment status of the population and related data are compiled by BLS using data from the Current Population Survey (CPS). This monthly survey of households is conducted for BLS by the U.S. Census Bureau through a scientifically selected sample designed to represent the civilian noninstitutional population. Respondents are interviewed to obtain information about the employment status of each member of the household 16 years of age and older. The inquiry relates to activity or status during the calendar week, Sunday through Saturday, that includes the 12th day of the month. This is known as the “reference week.” Actual field interviewing is conducted in the following week, referred to as the “survey week.”

 

 Each month, about 60,000 occupied units are eligible for interview. Some 4,500 of these households are contacted but interviews are not obtained because the occupants are not at home after repeated calls or are unavailable for other reasons. This represents a noninterview rate for the survey that ranges between 7 and 8 percent. In addition to the 60,000 occupied units, there are about 12,000 sample units in an average month that are visited but found to be vacant or otherwise not eligible for enumeration. Part of the sample is changed each month. The rotation plan, as will be explained later, provides for three-fourths of the sample to be common from one month to the next, and one-half to be common with the same month a year earlier.

The sampling method is pretty much beyond reproach from a statistical standpoint. The households come from 824 sampling areas, and the individual households selected appear to accurately represent the country as a whole. The bottom line is that the survey covers about 55,500 households each month. This sample size provides a margin of error that is generally viewed as acceptable and there are numerous checks an balances to assure that the system runs as it is supposed to.

 

To maintain continuity from one month to the next, households are rotated in and out of the survey over time. A survey household will be interviewed monthly four consecutive months, taken out of the survey for eight months, and then returned for an additional four months. Each month’s survey consists of eight “rotation groups,” only one of which is entirely new each month. In the case of the September 2012 survey, there were seven groups that had been previously used included in the survey. These rotation groups were first used in June 2011, July 2011, August 2011, September 2011, June 2012, July 2012, August 2012. The eighth rotation group was first used for the September 2012 survey. Before next month’s new rotation group is selected, the BLS already knows who the other 87.5% of the households that will be used. They also know 50% of the households that will be used for the September 2013 survey. This is where the fatal weakness in the system is found.

Suppose someone with access to the list of households used passed it along to an Obama supporter. The person with access could be ideologically, financially or politically motivated. The Wikileaks affair demonstrated what an ideologically motivated person can do. Anyone even remotely aware of stock market dynamics knows the powerful effect of unexpected changes in the unemployment rate. The Obama campaign has been able to raise over a billion dollars in campaign funds because there are many people and groups with a vested interest in the election’s outcome. All it takes is one corrupt government employee or a competent criminal hacker to get this information. 50% of the list has been sitting on a government computer somewhere for a year. Given the Obama Administration’s predilection for leaking information when it serves their purposes, I have no doubt that such an information release is within the realm of possibility.

What would it take to change the unemployment rate from 8.1% to 7.8%? It would take a 0.3% change in the number of survey households with residents status changing  from “unemployed” to “employed.” How many households would that be? 0.003 x 55,000 =  166.5 households. If we assume 2 people per household who are categorized as members of the labor force, then the decrease in the unemployment rate represents 333 people in the sample group finding jobs.

This seems daunting until you consider what it takes to be classified as “employed.” Employment status is measured as of the week containing the 12th of each month. From the link above:

Employed persons. All persons who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees, worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. 

 

Each employed person is counted only once, even if he or she holds more than one job. For purposes of occupation and industry classification, multiple jobholders are counted in the job at which they worked the greatest number of hours during the reference week.

 

Included in the total are employed citizens of foreign countries who are temporarily in the United States but not living on the premises of an embassy. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.

So, all it would have taken to lower the unemployment rate by 0.3% is to identify 333 unemployed people in the 55,500 survey households and hire them for an hour during the week of the month containing the 12th day. Pay these people $100 and you’re out of pocket $33,300. A small price to pay to have your candidate win the election.

I have no way of knowing if this happened, but given the stakes involved are you willing to bet that it didn’t?

 

Useful Links

Employment Situation Summary

http://bls.gov/news.release/empsit.nr0.htm

Current Population Survey, design and methodology (Technical paper 66)

http://www.census.gov/prod/2006pubs/tp-66.pdf

Employment Situation Technical Note

http://www.bls.gov/news.release/empsit.tn.htm

Current Population Survey

http://www.census.gov/cps/methodology/questions.html

Labor Force Statistics from the Current Population Survey

http://www.bls.gov/cps/

Advertisements

Hello world!

Welcome to WordPress.com! This is your very first post. Click the Edit link to modify or delete it, or start a new post. If you like, use this post to tell readers why you started this blog and what you plan to do with it.

Happy blogging!