Bruce Bartlett is an economist who has worked on Capitol Hill, the White House and the Treasury Department.
Among Donald Trump’s stump sound bites is that the national unemployment rate is far, far higher than the official rate of 4.9 percent. He is not alone in making such claims. Both former Texas Governor Rick Perry, who dropped out of the presidential race last year, and retired surgeon Ben Carson have repeated this claim during this election cycle. Its origin dates back to the 2012 election when many Republicans believed that Barack Obama had ordered the Bureau of Labor Statistics to report a much lower unemployment rate in October, just before the election, than seemed plausible. It also feeds into a growing distrust for government statistical data that parallels a denial of scientific facts such as climate change.
The first to make an explicit conspiracy charge was former GE CEO Jack Welch, who did so on Twitter on October 5, 2012. Said Welch, “Unbelievable jobs numbers…these Chicago guys will do anything…can’t debate so change numbers.”
The media quickly repeated the Welch charge that the unemployment rate had been manipulated by the BLS, or perhaps by the Census Bureau, which collects the raw data from which BLS calculates the unemployment rate. University of Chicago economist Austan Goolsbee, who had lately served on Obama’s Council of Economic Advisers, pushed back, saying, “Love ya Jack but here you’ve lost your mind.”
However, the Welch charge was soon echoed throughout the conservative media, especially Fox News. Although careful not to endorse the Welch charge, numerous Fox anchors said the charges were very serious and implied that it was indeed exactly the sort of thing Obama might do. Republican Rep. Allen West of Florida tied it in with other right-wing conspiracy theories. Said West in a Facebook post:
I agree with former GE CEO Jack Welch, Chicago style politics is at work here. Somehow by manipulation of data we are all of a sudden below 8 percent unemployment, a month from the Presidential election. This is Orwellian to say the least and representative of Saul Alinsky tactics from the book “Rules for Radicals”— a must read for all who want to know how the left strategize. Trust the Obama administration? Sure, and the spontaneous reaction to a video caused the death of our ambassador…and pigs fly.
A few days later, Welch wrote a more detailed version of his conspiracy theory in a Wall Street Journal op-ed. The Journal, like Fox News, is owned by staunch conservative Rupert Murdoch. His argument basically boiled down to his contention that the drop in the unemployment rate from 8.2 percent in July to 7.8 percent in September was unbelievable. That’s about it.
Despite the paucity of hard evidence of a conspiracy or intentional manipulation of the unemployment rate for political purposes, the idea that Obama had engaged in exactly that spread very rapidly throughout the electorate, overwhelmingly believed by Republicans, substantially believed by independents and even a considerable percentage of Democrats.
This fact was documented by Dartmouth political scientist Brendan Nyhan, who had the polling company YouGov ask several questions about the accuracy of the unemployment rate in a late October 2012 poll. When people were asked if the September unemployment rate had been manipulated for political reasons, 55 percent thought it had been manipulated, including 23 percent of Democrats, 61 percent of independents and a whopping 85 percent of Republicans.
The first person to present actual evidence of a conspiracy to fudge the unemployment report was John Crudele, a columnist for the New York Post, which, like Fox News and the Wall Street Journal, is owned by Rupert Murdoch. In a November 18, 2013 report, Crudele traced the conspiracy to a Census Bureau employee named Julius Buckmon. Ominously, Crudele said that “the deception went beyond one employee – that it escalated at the time President Obama was seeking reelection in 2012 and continues today.”
Crudele said Buckmon had told him “that he was told to make up information by higher-ups at Census.” It doesn’t appear, from Crudele’s reporting, however, that Buckmon was specifically told to create fictitious jobs for the purpose of helping Obama. Rather he was told to raise his success rate in reaching households by phone to determine their employment status. Buckmon, according to Crudele, was very ambitious and simply made up numbers to meet his interview target.
The total sample size of the survey used to calculate the monthly unemployment rate is 54,000 households and Buckmon was just one guy in Census’s Philadelphia regional office. So even if what he said is true, it’s hard to see how he could create enough phony jobs to materially impact the national unemployment rate.
In any case, subsequent data show that the unemployment rate continued on a downward trend long after the election, which suggests that any conspiracy must have also continued long after the election.
It’s worth noting that there is an important check on the accuracy of the unemployment rate. A completely separate survey of employers calculates the total number of jobs in the economy. This is not a percentage figure, just a raw number. It comes straight from business records and is not really susceptible to manipulation, although there are problems in collecting data from newly-formed businesses and such that require subsequent revisions, which the BLS incorporates periodically.
Another thing to know is that the payroll jobs number has been consistent with the story told by the unemployment rate. If there was manipulation, economists comparing the data would have noticed.
There are other checks as well. For example, ADP is a company that handles payroll for many large companies. On a monthly basis, it publishes reports on the number of workers it handles payroll for. Its data correlate very closely with that of the BLS.
The Inspector General of the Department of Commerce was forced to investigate the charge of manipulation and issued an extensive report on May 1, 2014. It concluded that it was literally impossible for one person to have falsified enough data to have any effect on the national unemployment rate. It would have taken at least 78 people, working in tandem, to have accomplished this, the IG found. That many people working together for a common purpose would have triggered the quality assurance checks that Census has in place to protect against manipulation and error.
It also turned out that Crudele’s major source for his charge that the unemployment rate was faked by the Census Bureau, Mr. Buckmon, had in fact left the bureau in 2011 and couldn’t possibly have been involved in any effort to falsify any data in 2012.
As far as I can determine, Crudele has never mentioned the fact that his principal source has zero credibility. But he continued to hammer the Census Bureau for making up data, which is quite a different thing from systematic bias, which would be necessary to materially affect a number such as the unemployment rate. Like any bureaucracy, Census undoubtedly has some bad apples who fudge data out of laziness, overwork or pressure to meet work quotas. But as all statisticians know, such errors are, statistically speaking, random and, more than likely cancel out in the aggregate.
The New York Times asked the BLS commissioner who served under George W. Bush, Keith Hall, who is now director of the Congressional Budget Office, to comment on Crudele’s allegations. “I’m skeptical,” he said. “It sounds like a workplace performance issue. This is somebody being lazy, or a supervisor really cutting corners. It’s certainly not evidence of an attempt to move the numbers.” The Times report went on to say:
So if a few employees in one office fudged the numbers one month, it would certainly be troubling and cause for a top-to-bottom investigation, but it would not be enough to alter the nationwide figure by much. In addition, in each 15-month period, the Census Bureau goes back two or three times and re-interviews a handful of the original subjects to make sure the results were gathered correctly.
“Making up entire caseloads would be caught,” said a veteran Census Bureau field manager on condition of anonymity, because she wasn’t authorized to speak publicly. In terms of the former employee, she said, “No matter how hard he tried, he couldn’t move the number.”
Nevertheless, in January 2015, Rick Perry revived the unemployment conspiracy line, telling reporters in Iowa that the rate had been “massaged” and “doctored.” The fact-checking site Politifact could find no evidence to support his charge. But a few months later in May, Ben Carson also said that the official unemployment rate was politically manipulated, saying, “You can make the unemployment rate anything you want it to be.”
Donald Trump has said on numerous occasions that the “real” unemployment rate in the 20 percent range. In his campaign announcement in June 2015, he said, “Our real unemployment is anywhere from 18 to 20 percent. Don’t believe the 5.6. Don’t believe it.” In an August interview with Time magazine, he bumped the unemployment rate up to 42 percent in order to explain why the U.S. doesn’t need illegal alien labor. The Wall Street Journal explained that to get an unemployment rate that high would require the inclusion of retirees, teenagers in school and other groups that are not considered to be unemployed because they are not looking for work. Looking at alternative unemployment rates published by BLS, Politifact found that the highest rate was a fraction of Trump’s claimed rate.
In January, Trump repeated his claim that as many as 80 million people are actually unemployed—10 times the official number, in an interview with “Meet the Press.” And in his Liberty University speech on January 18 he called the official unemployment rate a “phony number” and said it was actually 22 percent or 23 percent. Fact checker Glenn Kessler of the Washington Post rated this claim as a whopper deserving 4 Pinocchios for being so wrong.
The reason people like Trump can get away with making up numbers and making baseless charges is because many Americans are receptive to his message. An August 2014 survey found that on average people thought the unemployment rate was 32 percent rather than the official rate of 6 percent.
But even numbers people who should know better have made absurd claims about the unemployment rate and other government data. The CEO of Gallup, Jim Clifton, called the official rate “misleading” and implied that the White House has engaged in manipulation. Former Reagan Office of Management and Budget Director Dave Stockman, who now peddles conspiracy theories for almost everything, also claimed that the true unemployment rate was 43 percent in June 2015. Billionaire investor Paul Singer, a big Republican Party contributor, has said that virtually all government data, including the inflation rate, are faked and unreliable.
Why Republicans seem so willing to believe statistical nonsense as well as conspiracies about Obama’s birthplace and global warming is unclear. But there is no doubt that it is extensive and seemingly immune from refutation.
Bruce Bartlett is an economist who has worked on Capitol Hill, the White House and the Treasury Department.