Key takeaways

• Years of government funding cuts are undermining the U.S.’s position as a global leader in providing the reliable statistical information that businesses and policymakers need for sound decision-making.
• The Trump administration has accelerated the funding cuts and worked to degrade the effectiveness and independence of data-collecting agencies.
• The Bureau of Labor Statistics (BLS) is a prime example of an agency whose data collection in areas like employment and wages is integral to our understanding of the economy’s health and whether it is heading into a recession.
• A decline in response rates to one of the BLS’s key surveys was already underway but, absent funding increases and survey modifications, it will be harder for economists and policymakers to make timely sense of changes in the labor market.

Historically, the U.S. has been a leader in providing reliable and timely statistical information to support business strategy and policymaking. The value of information provided publicly and free of charge to businesses, households, and governments is immense. Yet underinvestment over the past 15 years is a key reason why the U.S. lost its position on the cutting-edge of public statistical services worldwide.

Since the beginning of the second Trump administration, this underinvestment has accelerated, and the administration has made intentional efforts to degrade the effectiveness and independence of the federal statistical agencies (FSAs). This accumulation of threats to the effectiveness of the FSAs will rapidly degrade the value of the key public good they provide, unless policy changes course sharply.

This blog post provides just one example of how cumulative underinvestment has blocked the ability of a key FSA to respond to developments, making its data less reliable over time. The Bureau of Labor Statistics collects a range of necessary data tracking the performance of the U.S. labor market. This BLS data are a key input into high-stakes decisions across the U.S. economy—including for both public and private actors. For example, the Federal Reserve relies on BLS data about unemployment rates, payroll job growth, wage growth, and price indexes to set monetary policy. The more volatile the BLS data are from month to month, the worse the information that guides Federal Reserve decisions.

Private industry also relies heavily on these statistics. A 2018 survey conducted by the National Association for Business Economists found that 95% of businesses responded “yes” to the question: “Are government data important for analyses and forecasting that drive business decisions?” Employment and unemployment data produced by the BLS were rated as the most important data source for informing business decisions.

Yet over the past 15 years, the BLS has gradually lost personnel and funding, which has been undermining their mandate of producing timely, accurate statistics on wages, prices, and the labor market. More recently, the Trump administration’s choices to freeze BLS hiring has further strained Census field staff charged with collecting household survey data. Worst of all, the Trump administration took the unprecedented step of firing the commissioner of the BLS simply because the agency accurately reported data that the administration happened to find politically inconvenient.

Even without further blatant political pressure on the BLS’s independence, the agency will encounter growing difficulty in doing its job effectively in coming years. One of their most important efforts is the fielding of the Current Population Survey (CPS), a survey of thousands of households across the U.S. taken every month, which provides detailed employment and wage information. The CPS is the source data for the monthly estimate of the nation’s unemployment rate, for example. This is in turn a key criterion for assessing whether the economy is heading into recession. In recent years—after the COVID-19 pandemic—the response rates for the CPS have sharply declined. These declines, if not countered with greater investment in response rates, may make it harder for economists and policymakers to make timely sense of changes in labor market, particularly for populations that already have small sample sizes, such as rural areas or detailed demographic groups.

The rest of this blog post highlights the problem of falling response rates, demonstrates that they have made some labor market measures more volatile month to month, and shows that these falling response rates have occurred over the same period as the retrenchment in resources for the BLS.

Nonresponse reduces sample size in the Current Population Survey

The Current Population Survey asks questions about employment and other labor market characteristics to 60,0000 households or about 110,000 individuals every month. Between 2005–2016, the Current Population Survey household survey was able to steadily receive responses from around 107,000 people, ages 16 and older. However, as noted by others and shown in Figure A, the number of households responding to the survey has declined since the mid-2010s and then fell precipitously after the COVID-19 pandemic. In the first few months of 2026, just over 75,000 individuals, ages 16 and older, had responded to the monthly CPS.

Figure A

The decline in response rate has likely occurred for a few reasons. The Bureau of Labor Statistics notes that the rate of refusals had been increasing as early as the 1990s, likely as the world became more connected with computers and the internet, leading to less reliance on in-person interactions to conduct business. Social trust has also gone down over the past few decades, and the share of adults who agree that “most people can be trusted” has decreased by more than 15% since 1984.

More recently, the COVID-19 pandemic, coupled with concerns for privacy and distrust in the government, may be the reason that the rate of decline grew in recent years. The COVID-19 pandemic forced many workers to transition to remote work, and concerns about contagion limited overall social interactions, making response collection increasingly difficult. Additionally, concerns about privacy or retribution from the state felt by groups like immigrants may make some people more reluctant to answer questions for fear of deportation. 

Finally, distrust in the federal government, fueled by recent overtly political activity, could be behind some of the reduction in response rates. For example, when the Bureau of Labor Statistics published two consecutive months of large negative revisions to the number of payroll jobs in mid-2025, the Trump administration leveled charges—which were baseless and never backed up by any evidence—that the BLS had manipulated the data for political purposes and fired then Commissioner Erika McEntarfer. People are less likely to trust government if they think publicized information and facts are politically motivated. 

Smaller sample sizes are linked to less precision in key labor-market estimates

If the size of sampled households is large enough, declining participation does not have to significantly affect the reliability of statistics produced from the survey. However, if declines in participation reduce usable sample sizes too much, this can lead to estimates with less precision, which can reduce researchers’ ability to parse a signal from statistical noise in a timely manner, especially for economically vulnerable groups.

For example, because the unemployment rate for Black workers is volatile, it can be difficult to accurately diagnose labor market softness for this group. If the sample size is too small to generate statistical precision in each month, researchers will require increasingly more months of data to be able to diagnose labor market softness, which could jeopardize the timeliness of proper policy responses to support the labor market.

Every month, the Bureau of Labor Statistics publishes statistical significance summary tables, identifying whether changes in labor force indicators are statistically significant at the 90% level. BLS publishes these statistical significance tests for dozens of indicators across several demographic groups, including for Black workers. We collected these tables over time and documented the margin of error needed in order to claim a 1-month change in unemployment was statistically significant, shown in Figure B.

While the margin of error that is needed to claim a change is statistically significant varies with the level of unemployment rate, the reduction in precision from lower response rates is evident when we hold the unemployment rate constant. The two red lines in Figure B identify the effect size needed to claim statistical significance for a change from a starting unemployment rate of 7.3%. In November 2017, when the sample size of the labor force was 63,346, a 0.66 percentage point change in unemployment would have been considered a statistically significant change. In April 2026, when sample size of the labor force decreased to 45,416 respondents, a 0.84 percentage point change in unemployment is required to claim statistical significance.

If the declines in survey participation are not random across the U.S. population, estimates may also be biased, which runs the risk of conveying inaccurate information about the state of the economy. For example, if nonresponse is more likely to occur among unemployed respondents compared with employed respondents, the statistics derived from these samples may suggest labor market softness when there is none. These concerns are already materializing: The Census reported that nonresponse had biased income statistics from the CPS Annual Social and Economic Supplement upward by 2%–3% since 2020.

Researchers and field staff at Census and the BLS are aware of potential concerns of bias in their estimates and do their best to weight estimates using population counts from administrative data and other sources so that these issues don’t happen. However, if sample size declines continue on this trajectory, the BLS will need to create new methodologies and sampling strategies, all of which will require funding.

Steady throttling of BLS funding makes all decision-makers—public and private—less well informed

The declining precision of estimates in the Black unemployment rate is just one of the key indicators affected by a BLS that lacks resources to respond effectively to growing data collection challenges. Achieving a larger sample size for key surveys requires a well-functioning and well-funded BLS with personnel who can take on the challenges of administering surveys in the 21st century. Yet this is the exact opposite of what is happening. Figure C shows that from 2005 to the present, the staffing at the BLS went from roughly 2,500 employees to just over 2,150, a drop of about 15%.

Figure C

Funding has followed a similar trajectory. Since its high-water mark in 2010, the BLS budget has declined from $810 million to $636 million in inflation-adjusted terms, a decrease of 20%. These cuts don’t hurt just the estimates generated by the Current Population Survey. In the past couple of years, the BLS has been forced to reduce data collection for the Consumer Price Index and to discontinue certain Producer Price Indexes in an effort to cut costs. At a time when affordability and price changes are top of mind for U.S households and businesses, depriving public and private decision-makers of accurate and timely information about prices makes little sense.

Increased funding would allow the BLS to maintain all their current functions and implement new procedures to address declining sample sizes. In 2023, BLS began to modernize the collection process of the CPS to improve response rates by allowing online self-completion of the survey and other collection process improvements for certain data products. This BLS initiative is happening in parallel to similar initiatives in several other countries undertaking modernization efforts. The United Kingdom, the Netherlands, Australia, and Canada have all received funding to launch similar modernization efforts for their own household surveys to address declining response rates. However, the BLS requests for increased funding for the modernization efforts have not been fully granted.

The decision to steadily defund the BLS is especially striking when weighed against the large economic benefits provided by the agency and other federal statistical agencies. The BLS provides up-to-date precise estimates of economic indicators that policymakers and business leaders alike rely on. Previous research finds that increased economic uncertainty can have negative effects on the economy, proving the important role that the BLS plays. Moreover, some economists have estimated in 2025 that the BLS generates economics benefits of about $25 for every $1 spent on the agency’s budgets. The 2025 FY BLS budget was approximately $636 million, meaning the BLS currently generates about $15.9 billion in economic benefit. Across all agencies, in FY 2022, the combined budget request for statistical agencies was $7.1 billion or 0.3% GDP, yet the benefits have been measured to be around $770 billion.

Conclusion

At a time when more information on the economic and social well-being of people and communities is needed, not less, funding the BLS should be a top priority. Addressing nonresponse will require substantial effort and creativity to counteract declining levels of social trust and anti-government sentiment. It will, for example, require public campaigns to convey that information provided to the BLS is confidential and safe, and changes in methodology to render the correct statistical adjustments, such that the statistics generated are unbiased. 

Rather than tackle these challenges head on however, the Trump administration put forward a proposal that would reduce the number of statistics about rural and less populous substate areas that could be published without running the risk of disclosing personally identifiable information. These proposals are a lazy solution to the real but solvable problem of making public data widely available and fully confidential. They would provide less information on the economic and social well-being of citizens, likely leading to delays in accurately diagnosing economic and social problems.

When agencies like the BLS are underfunded and understaffed, they aren’t able to conduct the critical functions of their agency or serve the public to the degree their mission entails. Funding for these organizations shouldn’t be up for debate, given how strong of an economic benefit they deliver.

This piece was originally published in The Journal of the Center for Policy Analysis and Research (JCPAR). Read it here. 

Introduction

For Black Americans, public-sector employment has historically provided a pathway to better, more equitable and secure job opportunities compared with available private-sector jobs. The federal government has played an especially vital role in establishing a robust Black middle class in the Washington, D.C. metro area. According to the 2023 American Community Survey, roughly 2 out of 5 Black adults in the D.C. metro area were college graduates, Black median household income was nearly $90,000 and the Black homeownership rate was 52.8%. Postal service jobs have been particularly valuable to Black workers without college degrees because of the uniform wage and benefit structure (all postal employees who have the same job title and job tenure are paid the same nationwide) and higher pay relative to comparable private-sector employment. With a minimum education requirement of a high school diploma, the median hourly wage of a postal worker is 43% higher than the typical high school graduate. While federal employment has opened the door to social and economic mobility for generations of Black Americans, it has often been the battleground and served as a compass in setting higher labor standards and equal employment policies in the United States.

Opportunity. Backlash. Resistance. Change: A brief history of Black federal workers

The history of Black workers employed in the federal government dates to the Civil War when the federal government hired its first Black employee in the Treasury Department in 1863. In time, the federal government quickly became the largest employer of formerly enslaved people, with large concentrations in the military and the U.S. Postal Service (USPS). By 1912, the federal government was the largest employer of Black Americans in the nation, including highly skilled Black workers who were hired in high-ranking white-collar positions.

One of the earliest actions aimed at weakening the position of Black federal workers came shortly after the inauguration of President Woodrow Wilson. In 1913, Wilson racially segregated the USPS and Treasury department—the first federal agencies to employ, and in the case of USPS, promote Black workers to management positions. The administrative practice of segregating the federal workforce extended to the demotion of Black civil servants from white-collar positions, at-will firings, and refusal to fill open jobs with qualified Black candidates. Later that year, a group of Black workers formed the National Alliance of Postal Employees, the first industrial union in the federal service, to resist the administration’s racist tactics.

In the 1940s and 1950s, Presidents Franklin D. Roosevelt, Harry S. Truman, and Dwight D. Eisenhower each issued executive orders that took measured steps to undo the overtly racist and discriminatory federal employment practices put in place by Wilson. Those orders were largely directed at national defense industries, armed forces, and government contractors in response to the demands imposed by World War II. But, throughout the 1950s and 1960s, civil rights activists pushed the federal government to do more to expand its hiring of Black workers. In response, President Eisenhower’s Executive Order 10590 established the President’s Committee on Government Employment Policy (PCGEP) in 1955. The PCGEP involved federal agencies more fully in the government’s anti-discrimination agenda and called for departments to develop regulations in accordance with its mission to stop all discrimination in all federal employment. However, the group lacked the enforcement power necessary to accomplish that mission.

Over the following decades, job prospects for Black federal workers were most improved by a series of executive actions and legislation introduced in the 1960s and 1970s. On March 6, 1961, President John F. Kennedy’s Executive Order 10925 required the federal government and federal government contractors to practice non-discrimination in their hiring practices. Additionally, E.O. 10925 established the President’s Committee on Equal Employment Opportunity (PCEEO) to monitor non-discrimination on government contracts. In a move that distinguished the PCEEO from prior ineffective, enforcement-lacking efforts like Eisenhower’s PCGEP, Kennedy granted policy-making authority to the group led by Vice President Lyndon Johnson and Secretary of Labor Arthur Goldberg.

On January 17, 1962, Kennedy signed Executive Order 10988 which allowed limited collective bargaining for federal employees for the first time and opened the door to federal employee union membership under three different classifications: informal, formal, and exclusive recognition. Public-sector collective bargaining would play a central role in maintaining the quality and accessibility of federal jobs through labor contracts that fostered transparency with clearly defined policies and pay structures. Labor contracts also served to limit discriminatory outcomes while providing critical protections and recourse against other forms of exploitation or mistreatment.

The power of Kennedy’s executive orders was reinforced when Title VII of the historic Civil Rights Act of 1964, signed by President Lyndon Johnson, formally prohibited employment discrimination in the United States and established the Equal Employment Opportunity Commission (EEOC) to enforce the law. The Equal Employment Opportunity Act of 1972 extended Title VII protections to cover more employers and strengthened the enforcement power of EEOC by allowing them to litigate against employers, including federal agencies, who violated Title VII.

Within the span of the 1960s and 1970s, the federal government had established a clear definition of what it meant to be an equal opportunity employer, leveraged its purchasing power to compel private contractors to meet similar standards, extended limited collective bargaining rights to federal workers, and assigned the EEOC a central role in enforcing anti-discrimination law. Black federal employees also continued to support and advocate for one another, establishing the non-profit organization, Blacks in Government (BIG), in 1975. The progress made during 1960s and 1970s would be gradually chipped away in the decades that followed. 

Federal job losses since the 1980s

During the 1980s, the Reagan administration took a swipe at federal employees, unions, and anti-discrimination enforcement, but that record pales in comparison to more recent developments. While Reagan announced plans to make federal job cuts, and infamously fired 11,000 striking air traffic controllers in the early 1980s, federal payrolls actually rose by more than 200,000 during his presidency before dropping by 427,000 during the 1990s and taking another hit of 244,000 between 2010 and 2014. Since the 1980s, the postal service, a major employer of Black workers, has been under sustained assault, including attempts to undercut employee compensation and the agency’s solvency.

In 2025, the Trump administration took steps to implement massive cuts to the federal sector and reverse course in the government’s pursuit of equity by rescinding at least a dozen prior executive orders related to racial and/or gender equality and terminating workers in DEI departments within federal agencies. In a series of legally challenged actions, Trump fired decisionmakers at the EEOC and National Labor Relations Board (NLRB)—rendering two independent agencies responsible for enforcing workers’ rights non-operational for several months—while his newly created Department of Government Efficiency (DOGE) made severe staff reductions and eliminated entire federal agencies. Trump’s attacks on the federal workforce have also included attempts to limit the approval of collective bargaining agreements with federal workers. The actions of Trump and DOGE contributed to the loss of 288,000 federal jobs between January and December of 2025, based on data from the Bureau of Labor Statistics. Ironically, while federal jobs once provided Black workers relatively more job security, early evidence suggests the burden of federal job cuts has fallen disproportionately on Black women. The potential consequences of these actions go beyond job losses and include major implications for Black family incomes and racial and gender pay equity.

An accounting of the significance of federal sector employment for Black workers and families

As detailed in the history presented above, between 1941 and 1981, Black workers gradually improved their employment status in the federal government through collective and individual activism of groups like the National Alliance and Blacks in Government, within a context of official support for their rights through executive orders and landmark civil rights legislation. This improved employment status expanded the ranks of Black federal workers who were able to secure higher incomes. By 1970, the median household income for Black families was just $6,279 compared with a range of $7,178–$10,987 for those earning GS 5–8 salaries in the federal government. In fact, Black federal employees compensated between grades GS 5–8 were either close to or slightly above the national median of $9,867. This remains a factor today as the high concentration of federal employment and related professional job opportunities in the Washington, D.C. metro area helps to make metro D.C.’s Black median household income ($89,912 in 2023) one of the highest in the nation and well above the overall national median of $77,719.

Analysis of 2024 state-level data from the Office of Personnel Management (OPM) reveals that over 300,000 federal workers (excluding USPS) reside in the D.C. metro area, accounting for 60% of all federal workers in the District of Columbia and surrounding states of Virginia, Maryland, and West Virginia. Black workers are just over one-fourth of the federal workforce in the District of Columbia (28.8%), Maryland (27.9%), and Virginia (26%). While the D.C. metro area is home to the largest concentration of federal workers, over 90% of the federal workforce live and work outside the nation’s capital. Black workers account for at least one-fifth of the state’s federal workforce in 12 states beyond the D.C. metro area.

Implications of massive federal job losses and the unfinished business of equity

To understand the stakes of federal workforce contraction, it is necessary to compare the demographic and wage structure of federal employment with that of the broader labor market. As shown in Table 1, in 2023 and 2024, Black workers were 12.5% of the private-sector workforce, compared with more than a fifth (22.6%) of all workers in the federal sector—a share that also exceeds their representation in the entire public sector (16.4%) which includes state and local governments. Black women’s share of the federal workforce (12.8%) was double their share in the private sector (6.4%).

A national comparison of hourly wages at the median and for low-wage (10th percentile) workers demonstrates the clear monetary benefit of federal over private-sector employment. Figure A shows this is true across race and gender both at the middle and lower end of the wage distribution. The hourly wage of a typical (i.e., median) Black federal worker is more than 40% higher than that of the median Black worker in the private sector. Black federal workers—median and 10th percentile—also have higher wages than same gender white workers in the private sector. It is worth noting that these wage comparisons don’t account for the more generous benefits typically offered to federal and other public-sector workers, which further raises the value of their total compensation. The higher wages earned by federal workers largely reflect the higher share of college and advanced degree holders and higher rates of union coverage relative to private-sector employees. Less than 7% of private-sector workers are in a union or covered by a union contract compared with 35.9% of all public-sector workers and 29.5% of federal workers (see Table 1). While greater union coverage helps to boost wages and benefits for all workers, it is an even more important factor in raising wages of those for whom racial and gender discrimination further restrict individual bargaining power.

Another factor contributing to better pay outcomes in the federal government is the use of the Schedule (GS) pay scale which applies to over 70% of white-collar federal jobs. This helps to mitigate pay discrimination in the federal government by standardizing the qualifications and compensation associated with a specific position and consistent with experience, job performance, and local cost of living. On average, Black federal workers appear to experience only marginally improved pay equity over Black workers in the private sector, while the Black-white wage gap is much smaller in the public sector, overall.

In the federal sector, Black workers earn 12.6% less than white workers with the same levels of education, experience, union coverage status, gender, and state of residence, compared with 14.9% less in the private sector and just 3.8% less in the overall public sector (see Table 2). Although there is a sizable wage gap between Black women and white men across sectors, the federal sector gap (26.1%) is nearly 8 percentage points lower than the gap that exists in the private sector (33.9%). Given enforcement of the GS pay scale, remaining racial and gender pay gaps among federal workers likely reflect disparities in job positions and associated GS levels, a long-documented concern of Black federal worker advocates and activists. These disparities may stem from the underrepresentation of Black workers in higher-level, higher-paying positions, which can reflect differences across agencies in workforce demographic composition, occupational structures, and promotion rates. Notwithstanding the relatively higher economic position of many Black federal workers, these results epitomize the unfinished business of eliminating pay inequity and occupational segregation across all sectors of the labor market.

Conclusion

This brief summarizes the important role federal-sector employment has played in providing better job opportunities for Black Americans than have traditionally been available in the private sector. However, those outcomes have never been a given. A solid history of advocacy and activism by and on behalf of Black federal workers alongside others were critical in securing important wins through executive actions and policy change. Moreover, pushback against some of the most egregious violations of federal worker’s civil and worker rights have at times resulted in stronger, more broadly enforced labor and equal employment standards, improving outcomes to the benefit of all workers.