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.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?
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%.
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."