A tipster tried to warn the Labor Department in 2011 that its unemployment statistics were being fabricated by the people at the Census Bureau who compile the data.
But the warning was either missed or ignored by Labor.
That allegedly allowed the data falsification to go on for years.
As I’ve been telling you, the falsification is now the subject of a number of investigations, including one by the House Oversight Committee and Congress’ Joint Economic Committee.
Also investigating is the Office of the Inspector General at the Commerce Department, which is in charge of Census. And I’m hearing that the US Attorney in the Philadelphia region is also poking around the matter, although a spokeswoman wouldn’t confirm that.
And, of course, I am also investigating. I’m waiting for the Commerce Department to comply with my Freedom of Information Act request for e-mails and text messages between people in the Philadelphia Census office.
So far, all I’ve heard is that the FOIA request is being worked on.
At the core of all these investigations is solid evidence that at least one surveyor — a guy named Julius Buckmon, working out of the Philadelphia Census office but polling in Washington, DC — submitted fake household surveys that were used in compiling the Labor Department’s unemployment rate.
Because of the scientific nature of the Labor Department survey, Buckmon’s actions alone would have affected the responses of some 500,000 households.
But as I’ve been reporting, the scam was allegedly much larger than that and included other surveyors (or enumerators as they are called) over many years. And supervisors at least two levels up are said to have known about — and covered up — the scandal.
So far Congress has mainly been asking questions about the Buckmon incident and his supervisors’ actions. But the inquiry is likely to get broader, especially if correspondences between people in the Philadelphia office show a conspiracy to make the unemployment rate look better than it really was.
The brass ring for the Republicans who control the Oversight Committee, of course, would be if they find evidence that the national unemployment rate was rigged right before the 2012 presidential election.
I previously reported that there were whispers inside the Philadelphia office that people high up wanted the jobless rate to come down before President Obama was up for re-election. And, in fact, it did drop sharply two months before the vote.
Up until now, the focus has mainly been on the Census Bureau, which, besides the unemployment rate, conducts surveys for a lot of government agencies and private concerns.
The Labor Department and its Bureau of Labor Statistics division have been largely left out of this controversy and viewed simply as the victims of the Census Bureau’s deceit.
My next few paragraphs may change that.
In late August 2011, a manila envelope containing evidence of falsified data was sent to Keith Hall, who was then in charge of the BLS. “The Philadelphia Regional office [of Census] … engaged in a cover-up after it was reported that members of its staff falsified data in an effort to meet goals,” said the anonymous letter, a copy of which I have in front of me.
The letter identified the two supervisors who arranged the cover-up.
“In an effort to satisfy the sponsor [the BLS] … the numbers were literally made up,” said the tipster.
The BLS never acted on the letter. And that’s ironic because Hall, who was pushed out of the Labor Department in 2012, had been skeptical of the truthfulness of the BLS’s jobless numbers.
I interviewed Hall last July for this column, and he said at the time that the unemployment rate was “misleadingly low.” However, back then Hall — who is now at George Mason University — was attributing the misrepresentation to statistical anomalies in the way the unemployment rate is calculated and not outright fraud.
I asked Hall Monday if he remembers receiving an envelope containing evidence that data was being falsified. He didn’t. “I would have remembered that,” he said.
Did the envelope get lost in the mail? The tipster had a tracer on it through the Postal Service. Did someone else read the note, which, admittedly, was a little confusing, and choose to ignore it?
Hall said he would have investigated had he known. “We couldn’t not take that seriously and look into it,” he said.
So what does this all mean?
My readers already know that the nation’s jobless rate is a screwed-up and worthless indicator. By definition, it declines — as it now is doing — when workers get discouraged and stop looking for jobs.
And it will rise if the day ever comes when jobs are plentiful and people start looking again.
On top of that, we now know that the unemployment rate can be rigged by a very few cheats — aided by the inability of bureaucrats to root out fraud even when it’s laid in front of them in a letter.
I find the fact that the Federal Reserve says it still makes policy based on the unemployment rate mind-boggling.
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