Data with destiny
In the early 1990s, the U.S. Bureau of Labor Statistics conducted two surveys to understand better the role that private-sector employers play in developing the skills of their employees. It was the last time the government systematically collected data on the incidence and intensity of employer investment in training.
Training Americans, particularly young Americans, for jobs in the 21st century is one of the most important social and economic challenges the country faces. Yet, even through a recession and severe unemployment, there is still a lack of real-time government data to help grasp the employment challenges and the solutions needed to tackle them.
As policymakers strive to arrest the troubling trends in economic disparity – the widening income gap and struggle of so many households to prosper – analytics can be a powerful tool. While businesses increasingly rely on so-called Big Data to enhance their bottom lines and large philanthropies use it guide their strategies for social and economic progress, critical government databases are being shortchanged.
Resources for three agencies – the Bureau of Labor Statistics, the nation’s principal fact-finding agency in the fields of employment and productivity; the U.S. Census Bureau; and the Bureau of Economic Analysis – have been in troubling decline. BLS funding, for example, has fallen by $70 million in real terms since 2010 and stands at about the same level it was in 2000, even as the economy has become larger and more complex.
Witness the regular revisions the government makes to economic data months after they have been released. For example, GDP for the second quarter was revised upward to 3.9 percent in September from an initial estimate of 2.3 percent in July. This sort of variance has real consequences for the economy and the American people.
The BLS Surveys of Employer-Provided Training are severely outdated. Employers are by a huge margin the biggest funder of training. The federal government spends about $3.5 billion, while conservative estimates on the private sector exceed $100 billion. Without more timely and accurate data, understanding about these kinds of programs is severely limited and dated, making it extremely difficult to invest in them wisely.
The power of data to drive economic progress simply cannot be overstated. Some organizations are responding.
Earlier this year, the Bloomberg Foundation announced a $42 million initiative to help 100 cities over the next three years by strengthening their use of data to improve services, inform local decision making and engage citizens. Cities like Jackson, Mississippi, and Mesa, Arizona, will work together to implement open data practices for the first time. New Orleans and Louisville will develop the capacity to conduct low-cost, real-time program evaluations.
The Bill and Melinda Gates Foundation also has invested heavily in the development of data to support their health and development programs, including a new $776 million initiative in nutrition, with an emphasis on expanding research into innovative approaches to tackling child mortality. In keeping with their commitment to evidence-based action, the foundation has adopted the Open Access policy, which provides unrestricted access and reuse of all peer-reviewed published research funded by the foundation, including any underlying data sets.
At JPMorgan Chase, we are increasingly turning to data to drive our programs to support economic growth.
While the government tends to rely on subjective and limited surveys to understand consumer behavior, the JPMorgan Chase Institute is drawing on current and detailed transaction information for 50 million U.S. households. This is providing insights into the vulnerability of low-income and middle-income American families to disruptive or catastrophic events, like losing a job or suffering a debilitating injury. We are sharing this data with policymakers and using it ourselves to invest in ideas that promote financial stability for average Americans.
There is an important competitive aspect to all this data gathering and analysis. In Seattle, local economic development leaders discovered, using data from our Global Cities Initiative joint venture with the Brookings Institution, that foreign direct investment in the region is predominantly from Canadian and European trading partners, and it was failing to leverage regional strength exporting goods and services to the Pacific Rim. The area is now implementing new strategies to convert these Pacific Rim partners into investors in local advanced industries, which happen to be high-wage job creators.
Finally, recent data should help identify where jobs are being created and the training needed to fill them. JPMorgan Chase’s analysis of nine metropolitan economies, through our New Skills at Work initiative, found that about one in four jobs in these cities pays more than a living wage and requires less than a bachelor’s degree. We are now using this data to develop career maps to help individuals, educators, employers and public officials better target workforce training and development funds for the right sectors and jobs.
Data has become a modern currency that can help solve some of society’s greatest problems. At a time when the global economy has become even more complex, however, public and private investment is necessary to make the most of it.