A hacked census would be disastrous for businesses
Balloons decorate an event for community activists and local government leaders to mark the one-year-out launch of the 2020 Census efforts in Boston, Massachusetts, U.S., April 1, 2019.   REUTERS/Brian Snyder
Balloons decorate an event for community activists and local government leaders to mark the one-year-out launch of the 2020 Census efforts in Boston, Massachusetts, U.S., April 1, 2019. REUTERS/Brian Snyder

The 2020 U.S. Census is going digital for the first time ever, a move that is supposed to save money. But innovation brings a new element to the country’s most crucial survey: hacking and disruption.

Last month, the Government Accountability Office put out a report on the 35 “high-risk areas” where the U.S. is lagging, and labeled nine that “need especially focused executive and congressional attention.” Both the 2020 decennial census and general cybersecurity of the country made the list.

“The Bureau has not addressed several security risks,” a following report in April said.

The role of the census goes far beyond allocating representatives to Congress, and any shadows — from hacking or mistrust — cast on a well-executed census could prove disastrous in myriad ways beyond the public sector.

Why good census data is so important

Before getting into the specific risks to the U.S. census, it’s important to understand exactly what it does and why it’s so important.

As Brookings demographer William Frey wrote recently, the census is the “backbone of thousands of government and private sector surveys that guide decision-making.” Entire industries rely on accurate and trustworthy census data to function properly.

The U.S. census is not an ordinary survey that samples the population; it literally polls every household in the country and counts every occupant.

When surveys sample, they do so often using census data, which provides the reference point for the sample.

“It’s the framework for any kind of samples taken over the course of the next decade,” Frey told Yahoo Finance in an interview. “It’s all predicated on the census.”

Since the census is the only time when a sample is not used, its accuracy is critical. Businesses use it to see if they will have a labor force and customers; state, local, and federal government agencies use it to see where services are needed, and where to build hospitals and schools, Frey said. The timeframe is also critical, as the data expires.

“I'm a demographer and if it was up to me, we'd have a census every year,” said Frey. “By the time you get 9 years out, that's the worst data you'll ever get.”

Some industries rely on census data more than others, but it touches every facet of the economy, from where to put cellphone towers to how insurers calculate rates. The Census.gov website itself explains real-world uses, from specific businesses to Florida trying to figure out emergency management preparations to plan for major weather events.

The census is the backbone for the country in many ways. (Census.gov)
The census is the backbone for the country in many ways. (Census.gov)

“Population density is a rating variable for private-passenger auto insurers, homeowners, renters, and business insurers,” said Michael Barry, head of media and public affairs at the Insurance Information Institute. “Roadways with more cars are going to have more accidents. A hurricane striking a city is going to generate more insured losses than if it were to hit a rural area.”