Tuesday, May 20, 2014

On how gutting national statistics bureaus harms countries, e.g. Canada 2014

One of the tags used here at Demography Matters is "census". I've made the most use of this tag, I think, in my ongoing coverage of the way that Statistics Canada--Canada's official national statistical service--has been gutted by the incumbent government. Most recently, in October 2012 I noted how the removal of the long-form census made statistics on language use in Canada problematic.

Worse, much worse, has come. As journalist wrote today in the Toronto Star, bad data has undergirded much national policy in the past few years, and a good reason that bad data was allowed to persist is that critical Statistics Canada programs have been defunded or simply never launched.

For the past year, Canadians have laboured under the misapprehension that thousands of jobs go begging because no one in this country has the skills to fill them. It turned out the government was using faulty online data.

For two years, people struggled to figure out how Ottawa could close prisons while ordering judges to impose more jail sentences. The auditor general solved that riddle last week: it couldn’t. Canada’s prisons are dangerously overcrowded. “There is no link between the rate of violence and double-bunking,” Public Safety Minister Steven Blaney now says.

For eight years, the government has been cracking down on lawlessness, despite a steady drop in the crime rate. Former cabinet minister Stockwell Day insisted “unreported crime” was rising.

Through three federal elections, Stephen Harper has campaigned as the prime minister who brought fiscal discipline to the nation’s capital. In fact, federal spending ballooned on his watch. He burned his way through the $13-billion surplus left by the previous government, leaving no rainy-day fund when the 2008 recession hit. That meant he had to run the largest deficit in Canadian history. Only since 2012 have the Tories practised government-wide restraint.

Two things are noteworthy about this pattern of disinformation.

One is that it has lasted so long. Until recently there was no systematic questioning of the “facts” dispensed by Harper and his associates.

The other is that it is locked in. The Tories have downsized Statistics Canada, the country’s chief information gathering agency, so severely that future governments will have to rely on blunt — and sometimes unreliable — tools to monitor socio-economic developments.

Half of the agency’s workforce is gone. Hundreds of its programs have been dropped. The mandatory long-form census has given way to a voluntary household survey. It would cost tens of millions of dollars to reverse these changes — and any government that tried would face resistance from taxpayers conditioned to regard number-crunchers as a needless public expense.

Goar's Toronto Star column of the 13th of May takes a special look at claims that the Canadian labour market was characterized by a skills shortage, with many jobs going wanting for skilled Canadians to take them up. This data, it turns out, was based on information provided by Kijiji, an eBay affiliate.

One journalist in particular, Bill Curry of the Globe and Mail, was determined to find out where the government was getting its information. The only hint he had was a cryptic reference to “Wanted Analytics” in former finance minister Jim Flaherty’s 2013 budget.

The Quebec-based company describes itself as the leading source of real-time business intelligence for the talent marketplace. It offers clients data pulled together from online job postings, government statistics, reports of hiring intentions by individual businesses and trade associations, and its own soundings. The government said the firm’s methodology was protected by commercial confidentiality. Curry was temporarily stymied.

But one of Wanted Analytics’ other clients – the Conference Board of Canada – had developed its own suspicions. It reported them to the Parliamentary Budget Officer, who launched an investigation.

Jean-Denis Fréchette and his staff examined each of the company’s inputs and pinpointed the culprit: Kijiji, an online classified ad service operated by eBay. It allowed employers to post the same vacancy under several headings – jobs, services, community – creating double and sometimes triple counting.There was no immediate response from the government, but in the days that followed Kenney ratcheted down his rhetoric, referring to isolated shortages in specific regions. This month, the skill shortage that the Tories had been trumpeting for more than a year quietly disappeared from the government’s job vacancy survey.

The aforementioned Bill Curry, meanwhile, observed that on account of budget cuts, Statistics Canada is incapable of producing fine-grained data sets, looking at employment in specific metropolitan areas within a province, for instance. This, in a physically vast country where many provinces have the populations of mid-sized European countries, is a major failing.

Auditor-General Michael Ferguson reported this week that the existing data from Statscan leave many users wanting more detailed information. While Statscan reports national monthly job vacancy numbers broken down by province, the information does not reveal which regions of a province are experiencing shortages or which specific skills are in demand.

What that missing data might show is central to the heated debate over the federal government’s reforms of the temporary foreign worker program and employment insurance, which have been changed in response to perceived labour shortages.

“I know a lot of people are talking about wanting very detailed occupation [data] for very small levels of geography,” said Ms. Hale. “From my experience, those are the expensive surveys.”

Because of that high cost, she said there are no current plans to produce that missing information.

“We recognize there’s a gap. People would be interested in having detailed job vacancy information, but currently, within the program that we have funding for, the information that we have out now is what we can produce,” she said.

Via MacLean's earlier this month, I came across Lucas Kawa's article in Business in Canada, "Yet Another Chapter Added To The Canadian Data Disaster Story". All this aggravated existing weaknesses in Statistics Canada's data collection methods.

While Statistics Canada is often the scapegoat for all of Canada’s data-related ills, Alex Usher, President of Higher Education Strategy Associates, reminds us not to blame everything on just one agency.

“Part of the issue here is that we defer to StatsCan for everything,” he told Business in Canada. “In other countries, much richer data sets are produced by line departments.” For instance, there isn’t a StatsCan equivalent in the United States – a number of government agencies (like the Bureau of Labour Statistics and the Department of Education) produce data in a less centralized, more narrowly focused manner. Compared to other nations, “We expect less from our government agencies in terms of data collection,” Mr. Usher said. In addition, he noted that Statistics Canada is not without its strong suits, pointing out that its agricultural statistics are top-notch.

With regards to the availability of data pertaining to higher education, Mr. Usher indicated that “policymakers have less of a gap than policy analysts do.” By this, he means that independent policy analysts tend to focus on national data, and there isn’t a plethora of that. On the provincial level, Mr. Usher said policymakers have access to the information they need to make prudent decisions, singling out British Columbia for its strength in data collection. Mr. Usher did, however, also acknowledge that the data aren’t as extensive as they could be. “We don’t have stable funding for a suite of information products that makes sense,” he said, adding that this is not Statistics Canada’s fault.

I've written in the past about how hindering national statistical agencies by preventing them from collecting data harms countries. If it protects individual freedoms, I've seen no evidence of this. (The hundreds of complainants raised by one parliamentarian remain unheard.) If anything, making it difficult to collect data on national trends and to provide accurate information causes significant harm, by allowing poorly-thought policies to be enacted, whether based on bad data or based on no data at all. Weakening statistics bureaus ultimately causes great harm, diminishing the ability of governments and individuals to respond to trends. The skills shortage debate mentioned by Goar is a good example. It's one thing if there are no takers for certain jobs in a country, and quite another thing if there are takers who can't take these jobs for whatever reasons (the costs of relocation, the wages offered, et cetera).

We need good statistics. It's as simple as that.