[EDITORIALS]'Fudge Factors' in National Statistics

The recent revelation that some government agencies have manipulated statistics is a serious concern. Information that is gathered and analyzed is the basis for policymaking, policy execution and policy review; if statistics are tinkered with, policy failures will result and confidence in the government will be undermined.

According to an internal government inspection, the recent manipulation of statistics was done not only in the stage of gathering data, but also in the processing and analysis of the numbers. Employment security centers, under the Ministry of Labor, exaggerated the number of job seekers who found employment through those offices. The Ministry of Labor carried out special inspections at 25 of 167 employment centers run by six regional labor offices in Seoul, Pusan, Taegu, Taejon, Kwangju and Inchon/Kyonggi province. The inspection showed that the agencies overreported by nearly half － over 7,000 job-seekers － the number who had found employment through the offices.

The employment centers manipulated the statistics in several ways; they counted some applicants twice and reported some part-time employees as permanent workers. After investigations at the rest of the employment centers, the number of problems will surely grow.

The National Statistical Office wrongly calculated statistics on the growth rate of real wages by using flawed methodology. While the office was calculating the monthly growth rate of real wages from last year to May 2001, it reportedly used the producer price index instead of the consumer price index for several months worth of data. Although the NSO said the problem was a simple error by a working-level official and that the office had no intention of rigging the numbers, the error occurred at a time － May to September 2000 － when firms were engaged in wage negotiations. Using the producer price index instead of the consumer price index to calculate the growth rate of real wages had the effect of exaggerating the amount of real wage increases, which weakened labor's negotiating position in the ongoing negotiations.

Manipulation of data and mistakes in computing statistics must be stamped out. Incorrect employment statistics will lower confidence in the government's employment policies and unemployment data, which has long been a subject of debate. The government announced in June and July that the unemployment rate was 3.3 and 3.4 percent in those two months, despite the contraction in industrial production that occurred in those months that should have meant a rise in unemployment. Now the government's announcements of the unemployment rate are met with some skepticism.

The government should come up with controls that will prevent the manipulation of statistics, and should punish those found involved in such practices. The Assembly, during the upcoming inspection of cabinet agencies, should thoroughly examine how government money was spent on employment programs and whether the spending was based on rigged statistics.

Another problem concerning manipulation of data is the more general question of this administration's ability and discipline. Statistical management is sloppy; our aviation safety rating was downgraded because of bad management and income taxes paid by workers have been incorrectly estimated. Stability and public confidence in the ability of the government have been damaged. Public service discipline is worrisome; internal procedures failed to find manipulations and mistakes that went on for months.