uncertainty concerning the true level. Fortunately, for many applications expenditures serve as a useful approximation for consumption as well as being of direct interest in themselves.

A strong program for consumer expenditure data has evolved at the Bureau of Labor Statistics for which the Current Consumer Expenditure Survey is the most recent data source. In addition to providing current data on expenditure patterns, the survey should provide the opportunity to respond rapidly to emerging policy needs such as the need at the time of the oil embargo in 1973-74 for improved data on expenditures on energy. Moreover, the continuing nature of the survey should make it possible to refine measures of expenditure and to a lesser extent to experiment with improvements in data on wealth.

There are several areas in which improvement is needed in addition to the need for improved coordination which was mentioned at the beginning of the section on adequacy. There should be a sustained effort to measure consumption and to analyze the relationship of consumption to expenditures in some detail. Such analyses might make it possible to use the expenditure survey to update food consumption data between periodic large scale surveys of food consumption. Joint analyses of consumption and expenditures should also aid in predicting consumer expenditure patterns.

Another general area which should be carefully considered concerns the establishment of an expenditure panel large enough to permit detailed analysis of the expenditure patterns of low income households of different types. A panel of low income households could provide a detailed description of expenditure patterns of the poor and improved understanding of the effect of Federal income transfer payments on the poor. These and similar analyses would help provide the basis for determining the composition of a family budget for the poor and the extent to which certain segments of the poor pay more for comparable goods and services than other segments of the population.

A study should be made of the relationship of household food consumption and expenditures to determine the extent to which the Current Consumer Expenditure Survey might provide current data on trends in food consumption. Consideration should also be given to development of a survey panel to permit detailed analysis of the expenditure patterns of low income households.

Summary of Recommendations

1. A developmental program for the measurement of household income should continue in the Bureau of the Census with joint funding by the Bureau and agencies having a major interest in the improvement of income statistics. Provision for input from the principal agencies engaged in the production or analysis of income data should be made through the establishment of a policy group to advise on priorities.

2. The Department of Health, Education and Welfare should continue to provide for an analytical program and a modest developmental effort focusing on the measure of income, wealth and consumption, in order to ensure the sensitivity of data collection efforts to emerging policy concerns.

3. A continuing developmental program for the measurement of household wealth should be established in the Bureau of Economic Analysis. Provision for input from the principal agencies engaged in the production or analysis of wealth data should be made through the establishment of a committee to advise on priorities.

4. A continuing developmental program for the measurement of consumption should be added to the existing program for expenditure statistics in the Bureau of Labor Statistics. Provision for input from the principal agencies engaged in the production or analysis of consumption and expenditure data should be made through the establishment of a committee to advise on priorities.

5. Data users should be consulted at an early stage in the development of major household surveys focusing on wealth. Early consultation will reveal the preference of users for specific data items to be collected jointly in the same survey vehicle and identify those which might be approximated through matching files from other surveys and administrative records.

6. Survey vehicles for the collection of data on the economic status of households should be sufficiently flexible to be able to respond to changing data requirements for policy analysis. Use of a relatively stable set of core data items should permit timely release of continuing series while additional modules are processed separately.

7. The major continuing surveys designed to monitor changes in the economic status of households should also include an option for an additional quarter at the end of the regular data collection period. This will permit data collection which cannot be accommodated during the regular survey period and testing of collection methods.

8. The Office of Federal Statistical Policy should ensure coordination of statistical programs relating to income, wealth and consumption through membership on the interagency policy advisory groups in the three areas and through the Interagency Committee on Income Distribution.

9. Use of existing administrative and survey files should be made to improve the accuracy of estimates and to provide a more complete assessment of economic well being than can be provided through a single data set. Survey and administrative files should be designed to facilitate matching which can be accommodated within limitations required to protect confidentiality.

10. Abbreviated data sets should be employed to improve the description of economic status and to improve the results of file matches. For example, a summary set of data from the Current Consumer Expenditure Survey should be seriously considered for inclusion in the Survey of Income and Program Participation.

11. Selected improvements in the measurement of income which are successfully tested for the Survey of Income and Program Participation should be incorporated into the Current Pop

ulation Surveys (CPS). The integrity of the employment and unemployment estimates derived from the CPS should be protected by use of a CPS test panel to determine the effect of additional questions.

12. The Bureau of Economic Analysis measures of personal income by size and class should be expanded initially to include income after payment of personal income and social insurance taxes: subsequently they should be broadened further to include disposable personal income, consumer expenditures, and personal savings.

13. An interagency task force should identify practical methodologies for measuring the distribution of income in kind. The study should evaluate the alternative methodologies of collecting direct survey data and using indirect estimating procedures for selected components.

14. The Interagency Committee on Income Distribution should prepare a report on Federal requirements for data on the distribution of household wealth. The report should provide a basis for the development of wealth statistics pending the establishment of a continuing developmental program within the Bureau of Economic Analysis.

15. A study should be made of the relationship of household food consumption and expenditures to determine the extent to which the Current Consumer Expenditure Survey might provide current data on trends in food consumption. Consideration should also be given to development of a survey panel to permit detailed analysis of the expenditure patterns of low income households.

Uses and Users

The labor statistics' program of the U.S. Government is designed to provide macroeconomic indicators for use in the evaluation and formulation of public policy, in the implementation of public laws, and in the analysis of the workings of the labor market processes. Industry and area data are provided for use in the development of an overall and comprehensive set of labor market information for use by regional, State, and local government officials as well as by labor and management and the academic communities.

The need for a comprehensive system of labor statistics has been enunciated in the Comprehensive Employment and Training Act (29 U.S.C. 882) which provides that "the Secretary shall develop a comprehensive system of labor market information on a national, State, local, or other appropriate basis, which shall be made publicly available in a timely fashion." That statute also provides for "the use of selected sample surveys, to produce more statistically accurate data on unemployment, underemployment and labor demand by State, local and poverty areas." In addition, 29 U.S.C. 882 requires data on unemployment, labor force participation, involuntary part-time employment, and full-time employment at less than poverty wages in the Nation. This expression of need is a restatement of the mandate contained in the 1888 law creating the Bureau of Labor Statistics and in subsequent legislation. For example in 1913, 37 Stat. 737 (29 U.S.C. 2) provided for the collection, collation and reporting of "full and complete statistics of the conditions of labor and the products and distribution of the same...for all...industries throughout the United States and also by States...." Employment, wages, and hours by industry were specifically mentioned in the 1913 statute. In 1940, productivity and labor costs were added to the statutory mandate (29 U.S.C. 2b).

In addition, the National Science Foundation is required by law to "maintain a current register of

'Occupational safety and health programs are excluded from the following discussion of labor statistics. A discussion of those programs can be found in the chapter on environment statistics.

scientific and technical personnel, and in other ways. to provide a central clearinghouse for the collection, interpretation, and analysis of data on the availability of, and the current and projected need for, scientific and technical resources in the United States, and to provide a source of information for policy formulation by other agencies of the Federal Government."

The basic labor statistics of the United States are regularly used by the Joint Economic Committee of the Congress, the House and Senate Labor Committees, House and Senate Public Works Committees, the Congressional Budget Office, as well as a number of other committees established on either a standing or special basis. Within the executive branch the data are used by virtually every Department in preparing economic impact statements, in letting contracts covered by either the Davis-Bacon or the Service Contracts Acts, and in making recommendations respecting future public policy. The data are specifically used by the Council of Economic Advisers, other major economic policy members, and by the Departments of Labor and Commerce, among others, charged with distributing Federal resources on the basis of formulas which include labor force components. Further, the Federal Mediation and Conciliation Service uses occupational wage rate and hours data, average hourly earnings data, and other information about wages and hours in their mediation efforts. The Council on Wage and Price Stability uses all of the data series, but particularly those relating to occupational and nonoccupational wages and benefits, earnings, hours, and productivity. The Office of Management and Budget uses labor force and unemployment data in making projections about the impact of the Federal budget and of fiscal policy. The Federal Reserve Board uses labor statistics data in their analysis of the impact of alternative monetary policies. The Bureau of Economic Analysis uses labor statistics data as inputs. into the economic accounts. Moreover, a comprehensive set of labor statistics is required to evaluate various tax proposals, relating both to individuals and to businesses, to evaluate the appropriateness of the minimum wage and hour standards.

established under the Fair Labor Standards Act, to analyze the combined effects of the private pension system and the Social Security and Railroad Retirement systems, the interaction between federally sponsored health programs such as medicare and private programs (most of the coverage under which results from an employment related situation), the adequacy of unemployment benefits and the interrelationship between unemployment benefits and supplemental unemployment and other benefits provided by or through employers.

In the private sector, the data are used by labor and management for collective bargaining, by business in formulating business strategies, and by academics in their analyses of the functioning of the economy and the interrelationships of the various components in the economy. State and local governments use the data in much the same way as does the Federal Government. In addition, State and local governments use labor statistics in the implementation of numerous Federal and State programs including the unemployment insurance program. Private sector and State and local jurisdictions use national and local area labor statistics in developing affirmative action plans and these sectors and the Federal Government use the data in evaluating the plans which are developed. Further, both the Federal Government and State and local governments use occupational wage rate data at the local level in the process of establishing pay plans for their employees. The Federal Government also uses selected national level occupational wage data in the process of setting most Federal pay scales.

Advisory Groups

The Department of Labor's Bureau of Labor Statistics (BLS) is the principal Federal agency involved in the collection and analysis of labor statistics as such. Its principal advisory groups are the Labor Research Advisory Council and the Business Research Advisory Council. Both these councils advise BLS on needs for new series and on methodology. BLS also receives advice from panels convened to consider a single major aspect of labor statistics. A major effort of this nature, for example, was that of the President's Committee to Appraise Employment and Unemployment Statistics which was established in 1961 on the recommendation of the Secretary of Labor. Presently it is anticipating a report from the National Commission on Employment and Unemployment Statistics which held its initial meeting in April 1978.

In addition, BLS annually sponsors a meeting of State, local, and foreign governments and with other

labor economists and statisticians to discuss programs, techniques, and emerging programs. The Bureau also receives advice from the professional associations such as the American Statistical Association, the Industrial Relations Research Association, and the American Economic Association as well as from such organizations as the Federal Statistics Users' Conference, the National Bureau of Economic Research and the Interstate Conference of Employment Security Agencies both by participating in meetings that these organizations sponsor as well as through other formal and informal contacts.

At present there is no standing advisory committee whose sole function is to advise on statistical methodology and procedure and on changes in the state of the art respecting statistical processing. Notwithstanding the Government's expertise in this area, and particularly that of the BLS and the Bureau of the Census, new techniques and methods are developed by private sector units (most notably by the academic community but also by private consulting firms and by other business organizations). Moreover, the statistical methods and procedures employed by the statistical agencies should regularly be subject to a thorough review by outside recognized experts acting in a consultative role. Such a review would at least assure that the procedures employed are not being employed simply because they are in place. In addition, such a committee could routinely review the concepts underlying each data series and either suggest appropriate changes or add weight to the signals suggesting the need for a full-scale review of such concepts.

In large part, the need for such independent review will be met, though on a one-time basis for major areas, by the new National Commission on Employment and Unemployment Statistics, mentioned earlier. This Commission was established under P.L. 94-444 whose mandate is to:

1. Identify the needs of the Nation for labor force statistics and assess the extent to which current procedures, concepts, and methodology in the collection, analysis, and presentation of such statistics constitute a comprehensive, reliable, timely, and consistent system of measuring

'The statistical agencies do have outside groups and organizations review their procedures and methodologies. For example, the BLS cooperated with the National Bureau of Economic Research which examined the Wholesale Price Index under a contract from the Council on Wage and Price Stability (COWPS). Before letting the contract, the COWPS and BLS agreed on the need and desirability of the NBER review.