August 2005  

The EconData.Net Monthly Newsletter

SITE OF THE MONTH:  Grading Places

A Critical Review of Business Climate Rankings 
Sometimes it seems like it's everyone's favorite data game: sift through available data, pick some likely looking indicators, construct an index and rank the nation's states or metropolitan areas according to how receptive they are to business. "Business climate" rankings now come from a variety of sources, and they generate a fair amount of press attention, but for the most part, their methodologies lead unexamined lives, until now. The Economic Policy Institute has undertaken a critical examination of five prominent business climate rankings.
Written by the University of Iowa's Peter Fisher, the report questions whether businesses or public leaders should put any stock in these data.

The report focuses on five major indices:  the Small Business Survival Index, the Beacon Hill Institute's Competitiveness Index, the Tax Foundation's State Business Tax Climate Index, Cato Institute’s Fiscal Policy Report Card and the Economic Freedom Index.    Fisher finds reasons to question the methodology of each of these indices, and concludes that they are generally narrowly drawn and reveal more about the ideology of their authors than they do about state economic performance.  There is huge variation among indices; remarkably, 34 of the 50 states can claim that they are in the top ten of one of the five indices examined most closely in this report.

Too often, rankings are given credence simply because their use of copious amounts of data gives them an air of scientific precision.  Anyone who uses these indexes should have a good understanding of their strengths and their limitations.  A healthy debate over what matters, and how best to measure it, is in the public interest, and thanks to Peter Fisher and EPI for their contribution.  The full 106-page report is available for download at:
http://www.epinet.org/books/grading_places/grading_places_(full_text).pdf

Reconciling Different Wage Data

Making Sense of 3 Different Sets of Wage Data
One of the most perplexing challenges facing the analyst of local or regional economies is reconciling the three different sets of wage data published by the three principal federal agencies producing economic statistics.  The Bureau of Economic Analysis (BEA), the Bureau of Labor Statistics (BLS) and the Census Bureau, each have their own estimates of wages.  Often, its difficult to keep track of which series covers (or doesn't cover) which kinds of workers and earnings.  A helpful summary of key differences was recently published by the Bureau of Economic Analysis.

The differences are substantial:  Census tallies $3.9 trillion in wages for 2002, while BLS totals to $4.7 trillion and BEA includes a total of nearly $5 trillion.  This article neatly explains the key differences.  Census data exclude most government workers, and BLS data include only workers covered by the state and federal unemployment insurance systems.  BEA's measure, the broadest, includes workers not covered by BLS, and also estimates the value of unreported tips and other wage income.  As they say at the ballpark, you can't tell the players without a program; to better see who's in the line-up in each of these key data series, take a quick look at this straight-forward, one-page explanation.

You'll find it on page 5 of this article, which appeared in the May issue of Survey of Current Business.
http://www.bea.gov/bea/ARTICLES/2005/05May/0505lapimain.pdf

Census Budget Update

Proposed Cuts to Census Bureau Budget Still Pending
The Senate has delayed its vote on the Census Bureau appropriations bill until after Labor Day. As we reported last month, the bill provides for fiscal year 2006 funding for the Census Bureau at $727 million, $85 million less than the House-approved budget of $812 million. The Census Bureau announced that if the agency were funded at the $727 million Senate Appropriations budget mark, it would result in:

Elimination of the American Community Survey (ACS), County Business Patterns, the annual survey of state and local government employment, and Current Industrial Reports;  Halt development of the innovative Longitudinal Employer-Household Dynamics (LEHD) program;  Cutbacks in Census 2010 and the Annual Social and Economic Supplement of the Current Population Survey (CPS).

Due to the hospitalization of the subcommittee's ranking Democrat, Sen. Barbara Mikulski, as well as the press of other Senate business, the Senate did not consider the Census Bureau's fiscal year 2006 appropriations bill before it adjourned for August recess. This delay provides you with more time to act on behalf of the Census budget. If you have not already done so, please consider writing your Senators.
They need to know how Census budget cuts can have a negative impact on the ability of researchers, analysts, and policymakers to do their work. A few letters can make a substantial difference. If you write, please
copy us at comments@econdata.net. 

When Congress reconvenes after Labor Day, it will have only a few weeks to complete action on the bill before the start of the new fiscal year on October 1. If the Senate does not restore Census funding, a House-Senate conference committee must iron out differences between their respective versions of the funding measure. We will keep you updated on the situation.

Make Your Voice Heard

Calls for Comments on Federal Data Collection Efforts

By law, before a federal statistical agency can collect data from households or organizations, it must submit an information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval. Every data collection effort by Census, BLS, BEA, and every other federal statistical agency has to have OMB approval. Once given, that approval is usually good for three years, after which the agency must go back to OMB with a new ICR.  Federal law also requires that the public be given two opportunities to comment on each ICR, once while in draft form and once after it’s been submitted to OMB.

The statistical agencies announce these opportunities in the Federal Register. (Comments on the draft go to the agency; comments on the submitted ICR go to OMB.)  As a service to our readers, StatScan is providing links to the Federal Register notices requesting comments on draft and submitted ICRs. Periodically, OMB and individual statistical agencies request comments on proposed changes in federal statistical policy, and we include those as well.

We encourage you to check out these notices. If you see a data series that you find valuable, you can request the ICR supporting documentation (a good way to learn about how the program works) and write a letter giving the reasons the data series is useful to your work and your opinions about any proposed changes. The agencies and OMB seriously consider your comments. Moreover, giving voice tells OMB and the agencies the importance that users place on the federal statistical system; the agencies find the letters very useful when it comes time for budget decisions. Even a brief letter can have an impact. If you do write OMB, we suggest you copy the statistical agency. We want to keep a tally of readers’ comments, so when you write, please copy us at comments@econdata.net.

American Community Survey Content Test (Census Bureau) – comments due August 10, 2005
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/05-13598.htm

Census of State and Federal Correctional Facilities (Department of Justice) – comments due August 15, 2005
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/05-11778.htm

Census Coverage Measurement Person Interview and Person Interview Reinterview Operations (Census Bureau) – comments due August 22nd, 2005
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/05-12260.htm

CPS Displaced Worker, Job Tenure, and Occupational Mobility Supplement (Census Bureau) – comments due August 23, 2005
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/05-12517.htm

Mass Layoff Statistics (MLS) program (Bureau of Labor Statistics) – comments due September 6, 2005
http://www.dol.gov/bls/regs/fedreg/notices/2005013415.htm

Common Core of Data Survey System (National Center for Education Statistics) – comments due September 27, 2005
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/05-14985.htm

Proposed Changes in Federal Statistical Policy
Proposed Revisions to OMB Statistical Policy Directive No. 1, Standards for Statistical Surveys, and OMB Statistical Policy Directive No. 2, Publication of Statistics (OMB) – comments due September 12, 2005
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/05-13837.htm

National Hospital Discharge Survey (Centers for Disease Control and Prevention) -- comments due August 26, 2005. 
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/05-14787.htm 

Newsletter of the Month:  Victoria Transport Policy Institute

An Urban Transportation Policy Gem
Although we generally focus on sites that deal solely with the United States, this month's newsletter comes from up North of the border in British Columbia.  The Victoria Transport Policy Institute is an independent research organization dedicated to developing innovative and practical solutions to transportation problems. Led by the prolific Todd Litman, VTPI provides a provide a variety of resources available free at its website to help improve transportation planning and policy analysis.   You can get their free and informative quarterly newsletter just by dropping them an email. 
mailto:  newsletter@vtpi.org

NEW LINKS

Small Businesses
August's new links provide some insight into business startups and small businesses around the country.

• Entrepreneur
  State Business Profiles
  Statistical overview of business characteristics, by state. Topics include number of businesses, women-and minority-owned businesses, and business turnover, income, and finance. Particular focus on small businesses.
  http://www.entrepreneur.com/stateguide
  

• Growthink Research
  Venture Funding Reports
  (Bay Area, Southern California, Boston). Executive summary free; full report for fee.
  http://www.growthinkresearch.com/Merchant2/merchant.mv?
  

• Small Business Administration
  SBA Business Loan Data
  Data on recent SBA loan activity, by SBA district.
  http://www.sba.gov/loans/business/
  

• Small Business Administration
  Bank Lending to Micro-Businesses
  Annual listing of banks with significant activity in loans under $100,000, with in-state rankings.
  http://www.sba.gov/advo/stats/Geo-Spatial Multi-Agency Coordination (GeoMAC)