Saturday, January 10, 2009

Misleading Headline Statistic of the Week
Yearly Job Loss Worst Since 1945
-- was today's page one headline in the Wall Street Journal, and a story in countless other newspapers, as evidenced by more than 3,000 hits by Google News. For instance...
Not since 1945 has the hemorrhaging of jobs accelerated at such a record pace - bringing last year's total job losses to a whopping 2.6 million and marking its highest levels since the end of World War II, the Labor Department said yesterday. There were 2.75 million jobs lost in 1945... [NY Post ]
Yes ... but the size of the labor force in 1945 was less than 58 million, while today it is over 154 million, more than 2.6 times larger, a fact all these stories omit.

So 2008's job loss amounted to only about 35% as much as in 1945 by the size of the labor force (and by size of the labor force was not the largest since 1945, but the third largest).

The chart below shows the percentage of the labor force employed since 1948 (data from Fred):

The worst overall labor market year by far was 1983. Informed newspapers should be warning about "Worst Since 1983", though that's hardly as grabbing, so we know why they don't.

If the labor market deteriorates to that point, God forbid, then the press will be justified to worry about "worst since the Great Depression", but not before -- though Google News produced more than 11,000 hits on that when I looked today, as well.

I'm not diminishing today's economic problems, they are bad and likely to get worse. But it would be nice if when the press cites historical comparisons, it would make some effort to be accurate and honest about them.