You Spin Me Right Around: My Math Lesson Today

Unemployment map produced by the Bureau of Lab...

Unemployment map produced by the Bureau of Labor Statistics website (Photo credit: Wikipedia)

Statistics.  The only course I ever failed at school.  Of  course it doesn’t  help that I’m no math genius. I let excel do the work for me at work – otherwise we’d be in deep sneakers fiscally  – just kidding.  As election day approaches, I wanted to put it out there to be careful.  The politicians continue to spin statistics and throw numbers at us. If you’re like me – it won’t make much sense.  Numbers don’t lie, but they can also be spun and tailored for whatever truth the politicos decide gets top billing this week; or this election year.

Here’s an example of where I get really really confused with statistics: Let’s say we start with a baseline of 1000 people.  The unemployment rate is 2.5% which means that 25 of those people are out of work. So far so good (well not for those 25 people but this is hypothetical anyway)  Then, we get the “news” that the unemployment rate has increased by 2.5%.  Here’s where my confusion starts: Is it an additional 2.5% of the baseline 1,000 people; or is it 2.5% of the 25 people who were originally out of work to start with?  You get very different numbers with these two scenarios:  In the first, the unemployment rate doubles – increasing to 5% or 50 out of the 1000  original people. In the second scenario the rate only increases by  1. (formula :  25 X 2.5% = 0.625 round up to 1)- or therefore 26 people out of the 1000. Which REALLY only means that unemployment went up 1%, not 2.5%. So  which number are they using for the determining baseline then –  25, or 1000? I think its fairly obvious why I failed statistics by now  😉  If I’ve made a mistake in my calculations can somebody please explain where I went wrong? My head is spinning – and the politicians haven’t even started their spinning yet.

When that starts, things get even more interesting.  The fear-mongers would, in the first scenario,  perhaps like us to believe that unemployment increased 100%. Using the standard formula to calculate percentages this would be correct  25 (2.5% of the thousand) divided by 25 (the increase of 2.5%) =1.00 – move the decimal right two places to get the percentage.  Less alarmist language would be “the unemployment rate has doubled”.  Also correct.  Which sound byte is the more worrisome? If you believe the worst case scenario, then who will you vote for – the person who you see got us into the mess? Or the person who “says” they have a plan, and the tools to fix the problem? I’m skeptical towards both, at best.

I like to look at the raw numbers and put them into context before I start to worry. In other words, I’d rather interpret for myself than have somebody do it for me (if I’m invested in the issue)   Statistics in its most basic form is merely interpretation – and there’s always, always more than one way to interpret anything. Even numbers. Here are some actual numbers I got from the Bureau of Labor Statistics.  How should this table be interpreted then:   bureau of labor statistics  ?

In my interpretation, we haven’t had a “good” year for unemployment since 2008 – the last time the unemployment rate was below 6%. I did the math for the March figures and they are correct – provided the raw numbers are accurate to start with.   There’s a potential labor force of 155 million* theoretically,  they are supporting 243 million*  themselves included. The actual number of people currently working is 142 million* folks.  or 58% of the population  -supporting themselves and the other 42%.   (and its not much support at all when its only a percentage of taxable wages that go into unemployment and welfare benefits)  Also please note that these figures do not include anyone under 16; or anyone here illegally and receiving any assistance benefits – so the actual number of people being supported by those 142 million workers is much higher. There’s currently about 13 million* people out of work in this country -8.2% of the work force – & 88 million* people who either cannot work, or don’t want to work. (they’ve opted out of the workforce for whatever reasons) That’s a HUGE burden on the employed.   We need to move our citizens towards greater self sufficiency.  The 60/40 split really isn’t working.  Any way you want to spin it  – it’s simply unacceptable.  And now, I’m worried….

In this election year my advice – for what its worth – is to Question Everything; and get people in Congress who want to work for US.   Here endeth the real lesson.  Peace, out.

*I rounded numbers up or down to the nearest million for simplification. 16 years of age or older.