Lies, damn lies, and statistics

In most countries, people don’t believe statistics and economic data trotted out by government, particularly on cost of living and inflation.

Here is an amusing email on statistics (that confuse many) doing the rounds this week in Sri Lanka:

I want to talk about the unemployment rate in the UK. Good Subject. Terrible Times. It's 7.8%.

That many people are out of work? No, that's 14.7%

You just said 7.8%. 7.8% Unemployed.

Right 7.8% out of work. No, that's 14.7%.

Okay, so it's 14.7% unemployed. No, that's 7.8%.

WAIT A MINUTE. Is it 7.8% or 14.7%? 7.8% are unemployed. 14.7% are out of work.

If you are out of work you are unemployed. No, the Government said you can't count the "Out of Work" as the unemployed. You have to be looking for work to be unemployed.

BUT THEY ARE OUT OF WORK!!! No, you miss his point.

What point? Someone who doesn't look for work can't be counted with those who do look for work. It wouldn't be fair.

To whom? The unemployed.

But ALL of them are out of work. No, the unemployed are actively looking for work. Those who are out of work gave up looking and if you give up, you are no longer in the ranks of the unemployed.

So if you're off the unemployment rolls that would count as less unemployment? Unemployment would go down. Absolutely!

The unemployment just goes down because you don't look for work?

Absolutely it goes down. That's how they get it to 7.8%. Otherwise it would be 14.7%. Our govt. doesn't want you to read about 14.7% unemployment.

That would be tough on those running for re-election. Absolutely!

Wait, I got a question for you. That means there are two ways to bring down the unemployment number? Two ways is correct.

Unemployment can go down if someone gets a job? Correct.

And unemployment can also go down if you stop looking for a job? Bingo.

So there are two ways to bring unemployment down, and the easier of the two is to have people stop looking for work. Now you're thinking like an Economist.

I don't even know what the hell I just said! Now you're thinking like the Government.