WASHINGTON, D.C. (Bloomberg Law) — President Donald Trump’s decision to fire the head of the Bureau of Labor Statistics carries reputational risks for the Department of Labor and the data it produces, jeopardizing economic indicators relied on by businesses, economists, and investors.
Trump had the legal authority to fire Biden appointee Erika McEntarfer; however, no other presidents have taken the risk of potentially damaging the credibility of the agency in charge of measuring the health of the US labor market. Even the implication that BLS data may be influenced by partisanship could have disastrous effects on the US’ standing internationally, attorneys say.
The public’s trust in the numerous market-moving wage, inflation, workplace injury, and other economic reports produced by the DOL is critical to ensuring the US is taken seriously on the global stage and investors’ decisions are based in reality.
“When leaders of other nations have politicized economic data, it has destroyed public trust in all official statistics and in government science,” former BLS commissioners William Beach and Erica L. Groshen as well as economist Paul Schroeder said in a statement.
The group cautioned that Trump’s termination of McEntarfer before the end of her 4-year-term was “without merit” and undermines the “gold standard” federal economic statistics that are key to informing the everyday economic choices made by businesses, workers, and lawmakers.
The monthly labor market data produced by the BLS “are important, because it’s one of the numbers that the money guys and gals up in Wall Street watch,” said Daniel Meyer, a partner at Tully Rinckey PLLC, who represents federal employees. “If we lose credibility on our economic data, that means we’re going to lose credibility with our overseas investors.”
The firings underscore the broad power Trump is willing to wield over the executive branch. He has fired officials traditionally seen as nonpartisan or independent, including every inspector general across 17 federal agencies, as well as leaders at the Federal Labor Relations Authority, Office of Special Counsel, and National Labor Relations Board, among others.
Trump said he would announce a new BLS commissioner in coming days. Conservative Steve Bannon, who advised the president during his first term, recently backed Heritage Foundation chief economist EJ Antoni for the role.
Implied Bias
The BLS has been under strain in recent years. The agency, like others, is under a hiring freeze after battling tightening budgets and staffing constraints and has seen response rates to its surveys drop.
While terminating McEntarfer may not be illegal, “it doesn’t mean it’s wise,” added Peter Bonner a former associate director at the Office of Personnel Management. The “independent” status of statistical agencies exists to produce objective advice, counsel, and research to the government and to the American public “so they can make good decisions,” he said.
“Can I depend on the information that I’ve been able to lean on and trust as objective sources of fact and truth when the person who brings forth those objective facts gets fired for it?” he asked.
The George W. Bush administration replaced its Bureau of Justice Statistics director after a report included racial profiling statistics, according to Jonathan Auerbach, an assistant professor at George Mason University, who has researched the autonomy of federal statistical agencies.
“The issue is that the removal violates a cultural norm in which political officials do not interfere with statistical data collection and reporting—for example, by retaliating against the agency or leadership that produced a report,” he said. “The system is designed to balance autonomy with accountability,” he added, but “it is not Trump-proof.”
The Trump administration argues McEntarfer was fired to preserve the integrity of the BLS.
