Thursday, October 22, 2015

CNBC's Silly Statistical Chart

October 21, 2015
CNBC: American wage earners became more unequal last year

Visualized as a curve showing the percentage of all earnings brought home by people in each earnings bracket, the distribution of earnings has become flatter — continuing a trend that has been ongoing for the last 25 years. That indicates that Americans are less likely to earn the same as their neighbor than in the past.

The #1 reason, by a very wide margin, that the chart has become flatter is inflation. If wages were to double evenly for every working American, what once fit nicely in the one $20,000.00 to $24,999.99 bucket would then fit nicely in the $40,000.00 to $44,999.99 bucket *and* the $45,000.00 to $49,999.99 bucket. When one bucket turns into two buckets we would expect the chart to become twice as flat.

Claiming that the reason the chart is flatter is due to income inequality is a bit like claiming that the reason the room is lit is due to the burning candle, while simultaneously ignoring the raging fire in the fireplace, the overhead lights, the windows exposed to the direct sunlight, and the flash grenade presumably set off by the "criminal statistics" police, lol. Sigh.

There has been rising income equality in this country, but that chart does an extremely poor job of showing it.

Lies, damned lies, and statistics, baby. That's what I'm talking about.


mab said...

Somewhat related. Rates of change (think cpi) don't tell the whole story either. When the Gov't institutes laws that require people to purchase stuff then the cost of living increases but it's not shown in the cpi.

Example. Some (many?) states now require new drivers to take on-the-road driving lessons prior to receiving a permit. And they ain't cheap! And then to even take the driving test, you need a car with a passenger side braking system or a center console brake. If you don't have one you can hire one!

The above adds about $600 to the cost of getting a license. None of these requirements existed when I got my license.

Stagflationary Mark said...


When the Gov't institutes laws that require people to purchase stuff...

How much would it cost me to buy a politician? Is there a bulk discount if I want to purchase more than one?

Hey, just trying to think inside the box. Stick with what works, lol. Sigh.