Metroblog

A one-time school project gone terribly, terribly wrong.

02 May 2008

Liars, Damn Liars, Statistics, and Delusions

The National Post has its points occasionally. Canada's right-est wing-est rag actually does journalism, much of the time. I read it to try and get a sense of how Canada's Reform Party supporters (oh, sorry--they're called the Conservatives nowadays) will try and frame things.

The problem is the spin. And the column from Terence Corcoran in today's NP spins so hard it could eliminate two or three coal-fired power plants, could we but hook it up.
Canada doesn't need any political parties to generate economic conflict. We've got Statistics Canada. You want class warfare? Here's what StatsCan said yesterday about income distribution: Between 1980 and 2005, "Earnings ... rose for those at the top of the earnings distribution, stagnated for those in the middle and declined for those at the bottom."
Let's wade in teh crazy up to our armpits, shall we? I'd like to confine myself to a couple of quotes:
Nobody would argue that Canada is perfect, that all boats are lifted by a rising tide, and that nobody is left behind in poverty or less-than-ideal conditions. But this StatsCan report is actually a strong reflection of an economy that has lifted all boats that could be lifted.
That is: "Rising tides don't lift all boats, only they do." Corcoran is not specific about whose boats could not be lifted.
In the run-and-grab business of news, it's easy to scoop up the hot nuggets of class-war gold. Earnings of top 20% jump 16.4% in 25 years. Bottom 20% see earnings drop 20%. Over the past quarter century, the number of people earning $100,000 doubled. Restage Les Miserables!
Ah, I see. Presumably he means the bottom 20% of wage earners (they're lousy boat-builders).
The problem is that StatsCan buried the news. In one case, it actually omitted a core table that shows that Canadians in all income classes have gained over the past 25 years.

[...]

But the StatsCan report doesn't break the family income data into high-and low-income segments. So I asked a StatsCan official for the numbers, and what they show is that -- to use the ideological vernacular -- the poor are getting richer. In 1980, the lowest 20% of families had income of $21,134. By 2005, the lowest group earned $24,379, for a gain of $3,245 or 15%. The top income-earning group had median income of $116,000 in 1980, rising to $143,000 in 2005, for a gain of 23%
.
Wow--sounds pretty damn good doesn't it. We still don't know whose boats could not be lifted, but is that important when the rising tide is lifting all the others?

Corcoran is claiming that Statistics Canada is lying outright. That as the bottom 20% dropped 20% off their wages, they were, to use the ideological vernacular, getting richer!

But like many people writing in the NP, Corcoran is forgetting a few things. First: The gap between rich and poor rose. Rich folks make $30,000 more per year than in 1980, poor folks $3,000. But since he feels this is a non-issue, let's press on.

Canadian workers got $53 in raises on average over the entire 25-year period. Via Bloomberg:
Canadian workers earned an average C$53 ($52) more in 2005 than in 1980, barely enough for an extra coffee a week, even as the economy grew by about 50 percent during the same period, according to census data.
I haven't the skill to figure in the effects of inflation. But Bloomberg did:
Median earnings for full-time employees -- before taxes and accounting for inflation -- edged up to C$41,401 a year in 2005 from C$41,348 in 1980, the agency said.


So let me confine myself to restating Corcoran's thesis more succinctly:

"A rising tide lifts all yachts."

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12 Comments:

At 12:17 PM, Blogger Pugs said...

Intersting. I was thinking the same thing as I was reading this on how the rich folk's salary increased by what is essentially 100+% of the poor's yearly salary. Then again, it does cost so much more to run a yacht than it does a boat so I guess it's all good in the end. We all pay our price...and sometimes other's prices as well!...

 
At 12:40 PM, Blogger Metro said...

This comment has been removed by the author.

 
At 12:42 PM, Blogger Metro said...

Even if you assume Corcoran's assertion is correct and everyone actually made money, and further reduce it to percentages, why is it that the top tier earners made 25% more, while the bottom tier made 15%?

I've been losing faith in economic and market deristriction for years, and this is just another layer on the crap trifle.

 
At 4:30 PM, Blogger Slave to the dogs said...

Looks to me like there's actually counterspin going on.

Why is it only bad when conservatives spin?

Oh, right, I know. Liberals never spin.

If you've taken a college stats course, you know that you can skew numbers to reach your desired outcome by, say, ignoring data in one table as described by Corcoran. It's not lying, per se. It's common practice and it's why you have to always consider the source.

And as for why the numbers increased more, haven't you heard the saying "It takes money to make money?" Top earners made more because they had more (or, some, anyway, we could go back to the previous argument about the poor and living hand-to-mouth) to invest. Income doesn't just include wages.

What I'd really be interested in seeing is who started out in that poor bracket in the 80s that remained there in 2005.

 
At 9:46 PM, Anonymous Anonymous said...

A lot of it has to do with the top earners calling the shots. Think of how many companies are trying to cap the maximum wage of their staff, while those in the upper levels get bonuses for "saving the company money." Sadly, there's no cap on what a CEO can make.

Barb

 
At 8:39 AM, Blogger Metro said...

@STTD:

Spin is spin. Anything more than a straightforward statement of facts contains a little.

However, based on observation I tend to believe that those who style themselves as "conservative" are more willing to use more spin more lavishly, more aggressively, with more enthusiasm, and more often to the detriment of their fellow citizens and the profit of themselves and their worldview.

One need only consider the American Enterprise or American Petroleum Institutes. More money can pay for more and harder spin.

In any case it takes a hard-core conservative economic theologian to look at a report that says the poorest have lost 20% of their earnig power over 25 years, that the average raise for the average worker over that same 25 years was $53 while the economy doubled in size, and spin that into "Everyone's getting richer".

(Except of course, all those whose boats couldn't be lifted. Like the entire middle class, for example.)

As to the statistics--does it seem reasonable that the government of Canada agency would "omit" an entire table that allegedly counteracted all other evidence and turned losses into gains?

Or is it more likely that a rabid deregulation journalist created a little spin?

I went around the newspaper circuit, and the only one saying everything's coming up roses is Corcoran.

He might be the lone voice of sanity in a wilderness of sensation, but I also find his rhetoric suspicious.

He starts out with his "rising tide doesn't lift all boats" metaphor. But then he goes on to say that in fact it does.

He tells us some boats couldn't be lifted, then goes on to say that in fact we're all getting richer?

"That is, hot ice and wond'rous strange snow!"
--Theseus, A Midfummer Night'f Dream

Who started out in that poor bracket and remained there? Well if you believe Corcoran, a few unnamed people who could not be helped, apparently. Everyone else is doing very well, thank you.

If you believe StatsCan, pretty much everyone.


@Barb:
The disparity in CEO pay gives even The Economist dyspepsia.

And yes, it's interesting how the fact that we are governed by rich people, and at the moment rich white "conservatives", affects us.

I would have preferred an income tax cut rather than 1% off the GST, but Harper, a conservative economist, likes to lower consumption taxes in order to encourage consumption and provide economic stimulus.

George W. Bush spun his tax cuts for the rich as benefitting all Americans, but the top few percent reaped all the benefit.

Why couldn't he have dropped income tax a bit? It would have made no difference to the poor, a little to the rich (who do pay expensive surcharges for being rich in America, or so it seems to me), but quite a heap to the middle-income bracket.

 
At 12:07 PM, Anonymous Anonymous said...

Actually, I was impressed with the tax cuts that I got this year, especially the break for having kids in sports.

I think you like to look at things as Liberal vs Conservative too much and have rose-coloured glasses on when it comes to believing the Liberal spin. Try looking at things a bit more objectively.

Were you this much in favour of the GST when the Cs first introduced it? You're starting to sound a bit like Dion :-)

B

 
At 12:12 PM, Blogger Pugs said...

I need to get some kids fast I guess. It's funny how I am single and childless yet my taxes still pay for somebody else's kid to go to school and the like but I digress...

 
At 3:54 PM, Blogger Metro said...

@Barb:

The terms of the discourse community are unavoidable if one wishes to be treated with any respect by stakeholders.

I didn't come up with the whole "liberal/conservative" divide. For some reason, the values I espouse, which I consider conservative, have been relabelled.

As to rose-coloured glasses: The Liberal Party were crooked, all right. The Conservatives are at least as bad. They pander to Quebec just as badly, but they've introduced a number of "reforms" designed to fix stuff that ain't broke, in order to claim that they're actually capable of passing legislation.

In fact they're worse than the liberals: Beholden and pandering to the RIAA on cultural matters. Sucking up to the far right on immigration, gun law, and the arts. Determinedly tearing apart the CBC, obliviating the Science Advisor and substituting a panel of industry executives ... and what makes it worse is that all that they do, they do behind a veil of secrecy in direct contravention of the "principles" they were elected on.

"Open, honest, accountable" Remember the campaign? I guess they figure none out of three ain't bad.

If they ever get a majority, I believe that this country will head down the hellslope exactly the way the US has. We'll become paranoid, fearful, and incapable of exercising rational judgement.

Let's not forget--this is not your father's Conservative Party. It's the Reform Party. Harper's even had to muzzle his cabinet and shut down press access to his ministers to keep them under wraps.

I'd rather have Chretien back. Hell, I'd even rather have that feckless prat Paul Martin.

I don't want Dion, though. Sigh.

Not that I think he's got a hope in hell. Nor the nuts to force an election even if he did. Sigh.

Oh, and as for spin: the Globe and Mail examined the claims made by Corcoran and similar free-market theologians. They concluded that the reason family earnings are up is primarily because of increased female participation in the workorce.

In other words, the number of families in which both people have to work to earn a living is waaay up.

Corcoran would presumably claim that that's great news.

 
At 7:27 PM, Anonymous Anonymous said...

Pugs, if it's any consolation, a lot of people pay for the education system. I paid before I had a kid and I'll still be paying after she's gone through the system in a couple of years. And remember, Pugs, a lot of childless people paid their taxes so that you could go to school.

Metro, your post made me laugh. My father always voted Liberal and my mom still does just because of that. Not that there's anything wrong with voting Liberal, but I have to wonder about my mom's reason for doing so. And she's not the only one who bases her vote on something so silly.

B

 
At 10:04 AM, Blogger Metro said...

Glad I could lighten your day.

The inherent problem with democracy is that the best reason to vote is societal gain, but the most powerful reason is personal gain.

Your mum is no sillier than the people asking themselves "Would you buy a used car from this man?"

 
At 12:48 AM, OpenID frontiereditor said...

In a microcosm of numerical happy days, our local school system said that the construction of two prisons in the county would bring new workers and woult translate into more families and a growing school-age population and a need for more facilities.

The 2000 U.S. Census came out and, indeed, showed a population increase of 1,300, which school officials touted as evidence of their prescience. Turns out that, however, the increase was almost exactly equal to the number of new prisoners housed by the prisons.
A check of the relevant U.S. Census abstract also showed that the entire increase and some of the net population was due to the prison and an increased jail population. That meant that the population at large actually decreased.

 

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