A fishy statistic in the GOP State of the Union response

at 06:02 AM ET, 01/26/2012

“One in five men of prime working age and nearly half of all persons under 30 did not go to work today.”

— Indiana Gov. Mitch Daniels, in the GOP response to the State of the Union address, Jan. 24, 2012

A loyal reader wrote us about this line in Daniels’ speech after the State of the Union speech given by President Obama, expressing surprise that half of the under-30 population did not go to work. (She assumed he must even be counting babies.) It took us a while to track down the facts in this case, but it turns out to be an interesting tale of a statistic that, in the end, does not really say much.

The Facts

Something seemed fishy because the first part of Daniel’s quote refers to 20 percent of “men in prime working age” not going to work, while adding that a much higher number — nearly 50 percent — of those under 30 not having jobs. That’s a rather large gap that should immediately raise flags.

Asked about the statistic, a spokeswoman for Daniels first referred us to a June 2011 opinion column by Mortimer Zuckerman, owner of US News and World Report, that noted that many people are discouraged from looking for work, so the “hidden unemployment rate” is much higher than the actual unemployment rate. “One fifth of all men of prime working age are not getting up and going to work,” Zuckerman wrote.

Indeed, about 18 percent of those between the ages of 25 to 54 do not work, according to Bureau of Labor Statistics data.

Daniels’ office, however, could not provide the source for the statistic on the under-30 population, except to note that 55 percent of the 16-29 population works, leaving 45 percent — “nearly half” — without jobs.

The statistic appears to stem from an Associated Press article published in September, which cited Census Department data to assert: “Employment among young adults 16-29 was 55.3 percent, compared with 67.3 percent in 2000; it’s the lowest since the end of World War II.”

But when you dig into the numbers, there is less to this fact than meets the eye.

First of all, the unemployment rate already is rather high because of the worst recession since World War II, so that would reduce overall numbers, especially when compared to a booming economy in 2000.

Moreover, the population aged 16-19 further skews the statistic; most of these potential workers are in high school or college and so do not work in the first place. These potential workers, with few skills and experience at the start of their careers, are also the most vulnerable to layoffs and having trouble finding a job.

Going deeper into the BLS data, we see that 37 percent of 16- to 19-year-olds were working in 2003. This dropped to 33 percent in 2008. By December of last year, it had fallen to 25 percent.

In other words, a huge part of the swing in unemployment comes from a segment of the population that is only a small part of the labor force in the first place. When 16- to 19-year-olds are removed from the data, it turns out that, as of December, more than two-thirds of the 20-29 population went to work each day.

The Pinocchio Test

Daniels erred in using a statistic that was too affected by a part of the population that is not a major part of the labor force. The employment situation is bad enough that politicians should not have to rely on such suspect facts to make their case.

Two Pinocchios




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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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