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Commissioner Beach Reflects on the Future of Statistics

Wednesday, March 15, 2023

No one knows the future, of course, but that has hardly ever stopped people from speculating about what it might contain.[1] Derision to one side, you could make a good argument that successful organizations (among whom I count BLS) are always thinking about the near-term future and wondering if they have the right talent and capital in place to succeed at what’s next. So, it is good practice to sort through possible future paths to settle on some trends that could be consequential for us. That is the purpose of this short note: What do I think is next for BLS? As my term as Commissioner of Labor Statistics comes to an end, it seems like a good time to look to the future.

When I started in this position in 2019, I wrote a short email to BLS staff on my priorities. That essay stemmed from BLS staff asking me about what might be ahead for them during my time as Commissioner. Such a sensible question deserved more than a flippant response. So, I settled on three areas I particularly wanted to emphasize: improved ways of measuring productivity, technical enhancements to our price programs, and a deep dive on how global value chains have reshaped our labor force and our workplaces. I’m happy to report that we’ve made excellent progress in all three of these subject areas, despite the abrupt operational changes starting in March of 2020 and ongoing throughout the COVID-19 pandemic months thereafter.

That said, what is on the horizon? Are there other issues that will shape what we do at BLS in the near and medium term? In my view, there are at least three trends that merit close attention. I think each of these, along with the priorities mentioned above, are molding BLS in important and sometimes subtle and hidden ways. They are:

  1. World demographic change
  2. How we work and the workplaces we are creating
  3. The growing role of AI and robotics in shaping how we produce and buy things and allocate resources.

Let me write something very brief on each of these.

World demographic change

Populations change so slowly that demographic developments hardly ever make the top of your news ticker or your planning dashboards. Even so, demography is destiny, and we have to take it seriously. Here are some very interesting recent projections from the United Nations. Between 2017 (the base year for the projections) and 2100, China’s population is projected to decline by about 50 percent, from 1.4 billion to 732 million. Likewise, India will shrink from 1.38 billion to 1 billion. In contrast, Nigeria grows from 206 million to 791 million, which reflects massive population growth across sub-Saharan Africa. Interestingly, the United States also is a growing country over the time period: from 325 million to 336 million, largely stemming from net immigration increases.

Why do these trends matter to BLS, you might ask? We certainly have learned these past 50 years that rapid growth among Asian economies substantially affected vast swaths of the U.S. labor force and our productive capital stock. While, again, history does not repeat itself, the population explosion in Africa and the rapid economic growth there will likely buffet the United States and powerfully affect what we produce and who produces it. Then again, most of our country’s population growth over the next 75 years will likely stem from immigration, which would be driven in part by world population change, and that surely will have profound effects on our labor force, education, housing, and so forth. Analysts at BLS always need to adjust their statistical work to capture the important changes in our economy. That’s why world population change and the movement of workers merits a prominent place on our planning dashboards.

Work and workplaces

The changes in work and workplaces are much more visible to us than the slow waves of population growth. We are, in fact, living in a revolution of work and workplace. This revolution, however, did not start with the pandemic, though COVID-19 certainly accelerated changes already afoot. Rather, the rapid deployment of the internet and private communications systems has largely eliminated space or place as a factor in the work of a growing percentage of the workforce. More and more American workers can ship their work product to file locations on networks instead of physical locations. For these workers, offices are not needed to organize, execute, and compile work product. Before IT networks, physical offices facilitated those business functions. Even workers who need to be in a physical place (like assembly workers) can be located nearly anywhere, since the technical knowledge they need to assemble products can be “shipped” to them via the internet from design and technical teams located elsewhere on the internet.

Why does this and related trends matter to BLS? If a third of workers now and two-thirds in fifty years work in jobs where place is less relevant, then what do we do with our BLS programs that organize their data by state, city, county, and other place categories? Do we need a way to estimate the occupations and work behaviors of workers where the workplace is a file location on the internet? How does this type of work affect our understanding of compensation, workplace safety, unemployment, and a host of concepts that we developed during the golden age of place-based work? Then again, how does the placeless worker affect those millions who work in jobs requiring labor in a specific place? Does place or space affect the distribution of income and the growth of compensation?

AI and robotics in the production and allocation of goods and services

There’s a saying in current economics circles that any economist who writes about Artificial Intelligence should have his or her brain examined. Maybe the state of our knowledge about AI, robotics, and machine learning is not that bad, but “enhanced labor” (my term) is a truly cutting-edge dimension of today’s and tomorrow’s economy. We really have few good clues about how AI and robotics in general will affect prices, incomes, occupations, productivity, and the labor force. So, why mention it here?

Here’s why: If we’ve learned anything about the implementation of breakthroughs in IT hardware and coding, it is that going from the laboratory to real life happens more quickly than almost anyone thinks. So, it will likely be with enhanced labor. Already we see growing uses for robots that learn. Robots in the automobile industry (of which one economist estimates there are now about 18 million) do a technically superior job assembling, painting, and testing automobiles. Robots in clothing, road building, rope weaving, and (!!) dentistry seem increasingly common.

However, this is what’s happening now. Some analysts predict that AI will be used extensively to position products and services in front of customers in a well-meaning effort to better provide buyers with more complete sets of things they can choose. In other words, markets for all types of goods and services are getting better organized, which significantly reduces the costs of searching for what you want to buy. That organization, however, affects the way consumers see goods, which should affect the way we collect prices.

Again, why should BLS be concerned about these developments? Enhanced labor processes replace tasks, thus fundamentally changing jobs. We need to be totally on top of this growing dimension of work. To do that, however, we need a classification system of tasks, which we don’t have, and a much better way to track the growth of these processes. This becomes an especially acute need when we think about how AI will be used to create choice sets for buyers. Are our current techniques for sampling producer and consumer prices sufficiently flexible to include the price information from these AI-shaped choice sets? How dramatically (or not) will AI and robotics reshape the structure of the U.S. economy?

Let me stop here. Like a tiresome relative, I could go on and on. The point, however, is this: we need to be alert to large and small trends that will affect the economy, thus affecting how we measure economic activity. That’s the basic mission of BLS and its amazing staff. And, on this front, there will be plenty of work to do over the next few years.

So, in the future and now, Go BLS!

[1] Here’s the cautionary note for all of you historians: late-19th century analysts, like Gustave de Molinari, predicted that the 20th century would see a total end to the terrible international wars that had so bruised the 19th century. See Molinari’s The Society of Tomorrow (1899).