THE Bureau of Statistics has got the official employment figures wrong, and although it is happy to acknowledge the errors, it won’t correct them in the official record because it will cost too much money.
Officially, employment grew not at all in 2011 after surging 363,500 in 2010. Yesterday in an invitation-only seminar attended by The Age, assistant statistician Paul Mahoney said employment probably climbed 30,000 to 35,000 more than officially acknowledged in the first nine months of 2011 and climbed 60,000 to 70,000 less than acknowledged in 2010.
This means official figures overstated the weakness in the labour market that led the Reserve Bank to cut rates at the end of 2011 and overstated the strength that led it to push up rates at the end of 2010.
“We acknowledge we have problems with the way we are benchmarking the labour force at the moment,” Mr Mahoney said. “We are not hiding behind this, we are being very open about it. This is a public seminar, this is going to be repeated a few times.”
The problem arises because, in order to convert the results of its survey into figures for the whole nation, the ABS has to estimate the size of the Australian population.
Usually it gets the estimate right. But at times when the rate of population growth is changing rapidly it can get it wrong. Instead of revising the official employment figures when more correct population information comes to hand, it instead revises its estimate of future population growth. This means incorrect employment figures remain on the public record and future employment growth figures are adjusted in the opposite direction to compensate.
This meant that in 2011 the ABS biased down what it believed to be the true rate of population growth, biasing down the official employment growth figures reported by The Age and other media.
Mr Mahoney said yesterday the changes were not “statistically significant”, but acknowledged they were significant in terms of presentation, making it look as if jobs growth had stopped in 2011 when it almost certainly had not.
“Yes, it does change the story,” he told The Age.
To improve the bureau’s processes might cost $1.5 million. It would take more than a year and be defined as capital expenditure. The bureau had its capital budget cut 25 per cent.
“We are certainly considering changing our processes and looking at how we might fund it,” Mr Mahoney said.
“But we are far more capital constrained than we were. This is just one system within the organisation. There are competing demands.”
The ABS will try to save money by moving its monthly employment survey online, posting passwords and login codes to the 29,000 households that take part rather than visiting them and following up with phone calls.
It will also abolish or make less frequent a number of less-important labour force surveys.
The unemployment rate – 5.1 per cent – is unaffected by the Bureau’s problems with its measure of employment.
This story Administrator ready to work first appeared on Nanjing Night Net.