LYING WITH STATISTICS

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LYING WITH STATISTICS

What's the real U.S. unemployment rate?

by ED FINN

"There are three kinds of lies: lies, damned lies, and
statistics." - Benjamin Disraeli

Even in Disraeli's time, it seems, statistics were often
distorted to give a misleading impression. Today, the misuse
of data to "prove" a theory, support an opinion or excuse a
policy has been elevated to a fine art. Forty-four
years ago, the various ways that figures, charts, graphs,
tables and averages can be manipulated were described by
Darrell Huff in his book How to Lie with Statistics. From
the sample with the built-in bias to the unqualified
average, from the calculated omission to the selective
comparison, Huff demonstrated how easily statistics can be
used to deceive rather than inform.

Huff's book has long been out of print, but I suspect
that dog-eared copies are still carefully hidden in the desk
drawers of many advertising copywriters, public relations
consultants, politicians and even some economists. Or maybe
they learned how to lie with statistics without Huff's help.
Examples of statistical fabrication abound: the UN's bogus
ranking of Canada as No. 1 on its Human Development Index;
the Gross Domestic Product, which rates all economic growth
as good, even crime and pollution; and Canada's official
unemployment rate, which omits discouraged and involuntary
part-time workers.

If I were to pick the most dishonest case of statistical
skullduggery, it would probably be the official unemployment
rate in the United States. As in Canada, this rate -now
claimed to be down to five per cent - completely disregards
the millions of people who have given up looking for work,
as well as those who are working fewer than 20 hours a week
but would prefer full-time jobs. The calculation of the U.S.
unemployment rate, however, is done much more deceitfully,
and with some of the most blatant statistical perversions
ever devised.

For that country's business and political leaders, it
is important that the national jobless rate reflect the
merits of their policies. Mass layoffs, part-time work, job
insecurity, big corporate tax breaks, cuts in welfare and
UI benefits are not conducive to a lower rate of
unemployment. In fact, they invariably have the very
opposite effect. But the big corporations and their
political flunkeys want to convince the American public
that their free market approach benefits workers as much as
shareholders. And how better to peddle that lie as the
truth than with the crafty misuse of statistics.

According to the Council on International and Public
Affairs (CIPA), the real U.S. rate of unemployment, if
properly calculated, would be 11.4 per cent - more than
double the official rate. The CIPA listed seven major
changes in the definitions of "employed" and "unemployed"
that were made in the U.S. methodology that have had the
combined effect of substantially reducing the number of
Americans officially listed as being jobless.

Among the categories dropped from the labour force
survey, in addition to the discouraged, were the under-16
group, those on strike or locked out and those who weren't
actively looking for work in the four weeks prior to the
survey. But by far the largest group omitted from the list
of jobless in the U.S. are the working-age men who are out
of work because they are in prison or on parole.

The 1.5 million American men in jail and the 8.1 million
on parole make up nearly 10 per cent of that country's male
workforce. By not including them in its labour force survey,
the U.S. is able to reduce its official unemployment rate by
more than five per cent.

Just as the omission of a large group of unemployed can
drastically skew the statistics, so can the inclusion of a
group whose members are virtually 100 per cent employed -
such as the members of the U.S. armed forces. By lumping
these 1.5 million army, navy, air force and marine personnel
in with the civilian workforce, the official unemployment
rate is reduced by nearly another one per cent.

Given these egregious survey distortions, even the
CIPA's estimate of an 11.4 per cent rate of unemployment in
the U.S. could be far too modest. An actual rate of 15 per
cent would probably not be an exaggeration.

The CIPA points out that the ridiculously low official
rate of five per cent also conceals the real jobs crisis in
the U.S. by ignoring what it calls "the pauperization of
work" - the replacement of higher-paid jobs by those at or
close to the minimum wage, usually temporary or part-time,
and often below the poverty line.

Between 1979 and 1995, the greatest loss of jobs in the
U.S. - 22 million -- was in the durable goods sector of
manufacturing, where the highest-paying blue-collar jobs are
located. In sharp contrast, most of the newly created jobs
over the same period - 29 million - were in the service
sectors, and three-quarters of those were in the
lowest-paying categories: retail trade, health care, and
business services.

Over the past four years, according to the U.S. Bureau
of Labour Statistics, 8.4 million American workers were laid
off. Of the 3.8 million who had held their jobs for three or
more years, 64.8 per cent either did not find new jobs,
found only part-time jobs or found jobs that paid less than
their previous earnings.

On top of this shift to insecure and low-paying jobs,
the real wages of American workers as a whole have declined
by 19.5 per cent below their level of 25 years ago. Not
surprisingly according to the CIPA, poverty in the U.S. has
soared to unprecedented levels, with one out of four
Americans - about 64 million - now living in a state of
destitution.

Canadians should keep these grim realities in mind
whenever they hear our CEOs, politicians and academics
citing the artificially low U.S. unemployment stats as
"proof' that their market-driven policies create more jobs
than they destroy. The need-cons go on to argue that the only
way to bring down our high unemployment rate is to make
Canadian society a carbon copy of the U.S. and intensify the
scorched-earth tactics of public sector cutbacks,
privatization and deregulation.

That is their only recourse. They can't Americanize our
method of calculating the rate of unemployment, as much as
they might wish to do so, because Canada has much smaller
numbers of both convicted criminals and soldiers. Excluding
the former and including the latter wouldn't bring our rate
down even a fraction of one per cent. So all our need-cons
can do is (mis)use the phoney U.S. figures to claim, in
effect, that unemployment can be reduced by throwing more
people out of work.

To the many Canadians who have been fooled by this and
other exercises in statistical deception, I would implore
you to beware of data that don't gibe with your perception
of reality.

Disraeli, if he were still alive, would say it's time -
way past time - for a reality check.

Ed Finn is a research associate with the Canadian Centre for
Policy Alternatives.
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Moat

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Aw, nuts..... now my sig line's gonna look a bit "contrived"........
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Bob
 

Charles Bradshaw

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Here in the USA, the only thing used to figure the unemployment 'rate' is the number of NEW unemployment benefits applications filed. Those continuing such, are not included. Remember, that this is the RATE of unemployment, not the actual percentage of those unemployed for various reasons.

The statistical cycle merely shows the percentage of people losing their jobs, but, only uses the benefits applications for calculation. After all, how the heck can you get a valid number on those that do not apply for benefits???? (or cannot)

Most of those on Disability are permanently out of the workforce. As such, we don't count in unemployment statistics and should not. Likewise, convicted criminals in prison should not count, as their enterprises are illegal, rather than legal.

However, politicians do use statistics to lie all the time, as do many government agencies.

IF you compared the Unemployment Rate, with the number of those Newly Employed (not merely changing jobs), you might find things in a near steady-state (No. losing jobs vs No. getting jobs).

A truly meaningless indicator, is the Dow Jones Index. It is merely a composite of Dow Jones' List of Heavy Industrials (Blue Chips). Nothing more, nothing less. It is NOT an indicator of the entire Stock Market. It is useless, except to report on. What matters, are the stocks, bonds, and/or funds that YOU have invested in!! The market goes up for the simple reason that the investors' confidence has risen, and the reverse is true (confidence goes down, thus market goes down).

$End Rant$
 
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Moat, in fact is was your sig that reminded me of that book 'Lying With Statistics' -- it was offered in the first Whole Earth Catalogue ..(god I'm old) .. and I found the article in a search.. I never could believe the unemployment statistics, and now i see why. Personally I think they are even higher. .
I mean what the hay? there was this 'industrial revolution' thingy, right? work can be done by machines for pennies a kilowatt hour that it used to take 300 humans to do, and the population is ever-increasing - and yet many assume there is a job for every single person, and that person should be ashamed if he doesn't have one? utter fantasy!!!
 

DieselDave

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I see the point but parts of his argument are ridiculous, such as: Doesn't include people under 16 and people in prison. I also don't consider a person "unemployed" when they choose to not look for work or go on disability. My wife and children are not working and not looking for work, does that mean the unemployment rate at my house is 75%?

I agree the current numbers are inaccurate and could be even more so under this method.

I look at every poll and government gathered statistic as highly suspect. Wording and perspective skew the data to the desired result.
 

Albany Tom

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Let's not forget one of the biggest abusers of statistics - the "media". Have you ever noticed how the graphs showing some supposedly incredible increase or decrease in something always have a graph showing about 2% of the data. They clip the bottom part, say from 0-80, so that a change from 82 to 84 looks like a 100% increase.

If you ask these guys, they'll say it's because lay people just don't understand, and their graph makes the point more clearly. Ok...

I'll trust a capitalist over a socialist any day of the week. With a capitalist, you know where they stand, where there interests are, and they have a proven working system. With a socialist, however, you really don't know how extreme their goals are, you have a proven non-working system, and the worst part of all - These are people that claim to have MY interests at heart.

Just a tip: Anyone that walks up to you and says, "Hey buddy, I can relate to your plight. I'm here to help you." is someone you should be suspicious of.

Anyway, yes, statistics suck, 82% of the time.

Headline:

NEARLY 50% OF AMERICANS ARE DUMBER THAN AVERAGE
WHAT YOU CAN DO TO HELP THIS CRISIS!!!
 

PeterM

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Originally posted by Albany Tom:
....
I'll trust a capitalist over a socialist any day of the week. With a capitalist, you know where they stand, where there interests are, and they have a proven working system. With a socialist, however, you really don't know how extreme their goals are, you have a proven non-working system, and the worst part of all - These are people that claim to have MY interests at heart.
...
<font size="2" face="Verdana, Arial">I'll trust a capitalist over a socialist too. I'm not so sure about the "proven" system part though. Many poor and exploited workers would beg to differ about that. Where can I find a capitalist or a "free market" society anyway? Certainly not in the U.S. anymore.

In the U.S. we live under a sort of "reverse socialism" where risk is socialized and profit is privatized. Witness the massive corporate bail-outs we've had lately. Or the subsidization of pharmaceutical industry R&D so that the pharm companies can free up lots of money for marketing. There are many more examples of the public being forced to subsidize and cover losses of corporations while not participating in any profits resulting from these handouts.

Thanks to the millions spent to buy P.R. experts, presidents, legislators and lobbyists, there is no longer such thing as a "free-market" society, (if there really ever was one). In the real world, the public gets to foot the bill for the infrastructure that allows corporations to profit while corporate taxes plummet, or are avoided entirely by expatriation.

Since the late 1800's corporations have enjoyed the legal status of a natural human. They have all the rights and protections, (plus some extras. i.e. tort law), and none of the responsibilities of human citizens. In fact, unlike human citizens, corporations are prohibited by law from exercizing good citizenship if it costs their shareholders anything. To act contrary to their one and only legal mandate, i.e. to "maximize shareholder value", leaves them open to civil action by the shareholders.
In the old days, they spoke of the divine right of kings. Nowadays, it's the divine right of capital that holds sway over our society, and the world, (see globalization).
In order to return this society to a market based one, four interrelated things must be done. In no particular order they are:

1) Re-regulate certain key industries, including communications, aviation, accounting and the extractive industries and quit giving away the country's, (and the world's), natural resources as payback for political support.

2) Establish public financing of political campaigns and eliminate corporate, (and union), contributions. The opinions of our extremist supreme court notwithstanding, bribery is not "free speech". This is the keystone of any progress toward a true free market system as well as a necessity for a real democracy, (which we currently also do not have).

(As an aside, the next time you hear some C.F.O. or P.R. flak say that corporations don't expect specific payoffs for their political contributions or that they're just being "good corporate citizens supporting like minded candidates, ask them how much they'd contribute if it had to be done anonymously.)

3) Revoke the legal requirement that shareholder value is paramount to all other considerations. Growth for growth's sake is the ideology of a cancer cell. An increase in a share price is NOT the creation of wealth OR of capital. It is merely the redistribution of existing wealth among investors (The issuance of NEW common stock being the exception). People create wealth, not Wall street paper shuffling. Ford profits not when you buy a '98 Taurus.

4) Revoke the "citizenship" of corporations and return them to their original status of mere legal entities with a defined purpose.
Until these things are done, the interests of human beings will continue to be subjugated to the interests of corporate profit.

When these things are done, we could be well on our way to a free market democracy. And pigs will no longer be earthbound.
 

Lurker

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My favorite pet peeve statistical lie is used in advertising bullets like these:

"Uses 4 times less energy..."
"Contains 4 times less fat..."

If you do the math, 1 "times less" would take you to zero and any more "times less" than that puts you in negative territory, which doesn't make sense when measuring something like fat content, etc.

I guess Madison Avenue missed the day in 9th grade when they talked about percentage calculation. Just because A is 3 times more than B does not imply that B is 3 times less than A.
 

pedalinbob

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or how about this one:

if you increase from 2 to 3, wou have an increase of 50%.

if you then decrease from 3 back to 2, you have a decrease of 33%.

where did that 17% go?
im being silly...

it is all in perspective...or, it is all relative!

Bob
 
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PeterM, my cat read your post above and responded with the following;

"....it all sounds desirable to me, though #3 seems to miss the point: capitalism and corporations provide for the efficient use of capital, the efficient creation of markets, and the time value of money--all important factors in making an economy productive---the problem is that the economy has made a mockery of the society (of neighborhoods and non-material values, ie. spiritual values), and has really destroyed society and replaced it with a self-defeating oligarchy who can't see that the nature of capital is to concentrate--the job of society, the job of democratic government (if there were one) is to redistribute the concentrated wealth produced by the efficient capitalistic market for the true benefit of society (i.e. neighborhoods of spiritually imbued people)...."

(personally I thought #3 was well-put, esp. the cancer part... --TtL)
wink.gif
 

ott

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Buy USA (or Canada)
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We need manufacturing jobs. If we don't produce anything and buy overseas, its going to catch up with us one day. Support your local business!
I know this isn't getting at the heart of prosperity but it helps.
 

PeterM

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Ted
You have one smart cat there!! Please tell him/her to not misunderstand my point in #3. I'm not proposing we abolish corporations. Only, allow them the freedom to think long term and to be responsive and responsible to the societies in which they operate without the fear of being sued to death for passing up short term profits. I also do not advocate dismantling the stock market or anything like that. It is important to maintain the efficient use of available capital. My aim was just to point out that rising stock prices are not and indication of wealth creation. Theoretically, rising stock prices are an indication of wealth creation. As goods and services are created, profits, and therefore stock prices, rise. But as P&E ratios have gone out of control, this relationship has become diminished, at least from what I can see. I would be interested to know what proportion of money invested in the market went for the purchase of common stock, which DOES, (again at least theoretically), fuel the engine that actually creates wealth. My guess is very little. It seems the stock market has become a giant game of "greater fool" for speculators, not investors. There is a difference.
I agree with your view of the job of a democratic, (and I would add a "Democratic" government). Unfortunately, we don't have one. We have instead a Republican government whose job it is to concentrate wealth for their patrons while simultaneously using the tax money from those who aren't their patrons to protect said wealth. When we reach the point where there is so much wealth that 2% of it can provide an existence just comfortable enough to prevent a revolution for 98% of the population, as well as pay to keep the armies equipped and the police & prisons staffed, then we have reached a point of Republican utopia.

Here's something O.T. for ya.
My favorite statistical trick lately is Bush's statement something to the effect of the average family getting around $1000.00 from his tax cut.

Imagine Bill Gates walks into a soup kitchen where 60 homeless people are. The average wealth has just become a Billion Dollars!!
 

DieselDave

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The top 1% pay 37.42% or all taxes and the top 50% pay 96.09% of the total tax bill.

That means the other 50% of the country making less than $27,682 a year has to pay 3.91% of the total tax bill.

I didn't think making $27,000 a year made you poor.

These are not my numbers this is straight from the IRS CY 2000 report.

View it here
http://www.irs.ustreas.gov/pub/irs-soi/00in01rt.xls

I refuse to get into any more debates at this time. I am just offering facts.
 
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kitty has had a little tummy flu and was losing his lunch a couple of times a day, but with me serving him chicken from the the oven,instead of Beasty Feast, he's gotten over it and is making up for lost time, here he is again;

meow, meow... rather than comment on the role of the corporation being
humanized (meow) I prefer to follow the notion that the logic of capitalism
had been checked by Keynesian controls on the business cycle and by the use
of a social "safety net," but with the advent (in the last 30 years)of Far
right wing Republicans (now called Republicans) and right wing Republicans
(now called Democrats) there is no restraint on what the Pope John Paul 2
calls ruthless capitalism--a really mean spirited oligarchy with a notion of
their divine right to be rich and a contempt for the vast underclass... if
one forgets Karl Marx's politcal analyses and focuses on his description of
the mature state of capitalism, one gets the hopeful idea that the poor
sheep will turn on their oppressors when the system comes tumbling down
(like the gangs of NYC going up 5th ave) {haven't seen it -- TTL} ... of course, it may be that we
miss the anti-thesis because everyone's inside watching TV... still it's
nice to see people protesting a war before it starts... maybe when the
plagues and famines of the next ten years (in Asia and China and Africa)
kill a million people a day, there might be a change in world
consciousness... so get into the new meaning industry (where you can feel
good about yourself without being rich) or the food distribution business
(that's where the money will be) if things go well--if things go badly get
ready for a grand war with China in 2013! Meow!
 

pedalinbob

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dont worry, DD. nobody will attempt to debate those stats because they prefer to incorrectly believe that the wealthy pay no taxes, and therefore deserve no tax break.

gotta love illogic!

Bob
 

PeterM

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Gosh Pedalinbob, I've never heard anyone claim that the wealth pay no taxes. Where'd you find that straw man?

DD's stats are true enough, as far as they go. But they conveniently leave out payroll taxes.
Sure, you can ignore those, but they're taxes nonetheless and when accounted for level the percentages out considerably. I don't have the exact statistics handy, (exactness doesn't count. remember the topic), but it's on the order of a percent or two depending on where you make the comparison.

Besides, I think people should not be taxed on earnings but rather on wealth, or maybe consumption, if proper exemptions for necessities of life,(basic food & clothing, medicine, etc.), are made. Or perhaps a combination. The devil is in the details, but how much worse can it be than our current system?

IMHO, those that own 90% of the wealth should pay pretty close to 90% of what it costs to protect it. Kinda like insurance. In the final analysis, what else are taxes for but to ensure social stability and the protection of property? For various reasons, even those with no property to protect should pay a little, but basically your taxes should be proportional to what you have to lose.
 

PeterM

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Originally posted by Lurker:
My favorite pet peeve statistical lie is used in advertising bullets like these:

"Uses 4 times less energy..."
"Contains 4 times less fat..."

If you do the math, 1 "times less" would take you to zero and any more "times less" than that puts you in negative territory, which doesn't make sense when measuring something like fat content, etc.

I guess Madison Avenue missed the day in 9th grade when they talked about percentage calculation. Just because A is 3 times more than B does not imply that B is 3 times less than A.
<font size="2" face="Verdana, Arial">Madison Ave. doesn't want to confuse those who don't know that 1/4 means one-fourth.

The statements X is Y times LESS than Z means nothing mathematically speaking. If X were Y times Z, then of course Z would most definitely be 1/Y of X. That's the difference between semantics and matematics I guess.
 
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mmrrrrrow?
$27000 a year for a family of four works out to $519.23 a week -- rent, food, medical, and bringing up 2 kids... you don't think that's poor? On what planet can 1 person live for $129.80 per week? ( the USA is the only industrialized country on the planet without a health plan for all--in the USA 42 million adults don't have any health insurance.) The rich pay most of the taxes?-- for what? Not for the benefit of the vast underclass of wage slaves--perhaps for the military industrial complex that President Dwight Eisenhower (ex General of all Allied forces in WW2) warned of in his Farewell Address--farewell indeed...

r-r-r-r-r-r-r-r-r-r-r-r.....
 
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