Understanding Math is One Thing, But Not the Only Thing

Many this week looked at the recently released unemployment numbers and many are shaking their head. One of the questions I get asked is,”Do I think the numbers are correct?” This question arises because many who understand 1+1=2 can’t quite grasp the math when they hear on television or radio some talking head touting this statistic or that statistic. They hear the UE6 number (a stat that reflects the people who have given up looking for work) and that number rises, but another average falls. It just doesn’t make any sense when they get out a calculator and try the math for themselves. This is understandable because these are “Government” numbers. So I’ll give an easy example to use for the many whom for what ever the reason don’t understand why they’re confused, or don’t quite get why some are complaining and others are praising the same numbers.

As with anything related or released by the Government always remember, there must be a way to report something so that both sides can complain or praise when it fits the agenda of either party. It’s your job to at least understand how the numbers are formed, then you can at least rely on your own rationals or gut feelings to plan.

Here’s the example of how I described the recent data point:

“Let’s say there are 1000 jobs with 1 person in each. If you lay off 100 people you would have an unemployment rate of 10%. If at the next report the companies that laid off the 100 workers now states that those people and jobs are not going to be rehired because the jobs will no longer be available you will now have a base line of 900 jobs. So by the Government’s calculation and reporting criteria the next unemployment report would show 100% or full employment because the pool of available jobs is now smaller and they are all currently filled.”
For the 100 people who lost their job this type of math is what infuriates them, and with good reason.

It’s for these reasons I try to point out over, and over again that you just can’t listen to some talking head on television, radio, or even in print without making sure you do your own research as to make intelligent decisions on what data points you are going to work with in your planning of life or business.

Just because they’re on TV doesn’t mean they’re smart, or being exactly truthful. After all, there is a reason for the axiom: “Close enough for Government work.”

© 2012 Mark St.Cyr, All Rights Reserved