Monday, December 5, 2016

Where Do Those Numbers Come From?

You hear it all the time from politicians and news anchors:  97% of scientists agree on climate change; women are paid 79% of what a man is paid for the same job; and the rich are getting richer while the poor get poorer.  But where do these numbers come from?

I found more information about the first number in a Forbes article written by Alex Epstein.  Now Epstein is the author of A Moral Case for Fossil Fuels, so he definitely is not unbiased.  But he says that a 2013 paper by John Cook and others “found that over 97 percent [of papers he surveyed] endorsed the view that the Earth is warming up and human emissions of greenhouse gases are the main cause.”

To begin with the 97% refers to papers reviewed, not to scientists or even to all papers on the subject.  To get to 97% Cook developed three categories.  The first, “explicit endorsement with quantification,” refers to papers stating that at least half the problem is attributed to human activity.  This appears to be a small number of the papers.  The second category, “explicit endorsement without quantification,” includes papers that did not specify how much of the problem was due to human activity.  In the final category, “implicit endorsement,” are papers that only imply but do not state outright that some of the global warning is man-made.  Add all these categories up to get 97% of papers reviewed.  The only papers excluded were those that explicitly denied any man-made factor.

Epstein goes on to quote some of the authors of the reviewed papers who say Cook’s interpretation is not representative of their views.  So the source of this number gives no evidence that 97% of scientists agree and makes no mention that warming will be catastrophic, a thought the politicians and media automatically assume.  Finally, a reading of the paper itself shows that its stated purpose was to influence public opinion.

The pay issue is an easy one if you think it through.  The 79% number is probably accurate, but unfortunately meaningless.  It compares the pay of all women working full time to that of all men working full time.  It does not compare women in the same job to men in the same job.  In comparing the whole population, it doesn’t distinguish between the type of job, time on the job, or other factors (other than discrimination) that may affect pay level.  A more statistically accurate number is around 95.5%, which is still not acceptable but much closer to the truth.  And in some careers women earn more than men.  But even the department of labor publishes this bogus percentage as an argument for equal pay.

This Time article, written by a woman, gives good reasons for calling the 79% statistic a myth, but does not offer a more correct figure.

Finally we get to the earnings and wealth of the Top 1%, the rich who keep getting richer.  Well it’s true, the rich do continue to get richer, but the actual people in that category tends to change over time.  But I did wondered exactly how rich are they.  Do they have enough money to support all the programs that everyone wants to bill them for through higher taxes?

This should be an easy calculation – find out what percent of wealth they have and multiply by the total wealth in the US, a number probably available from census figures.  As it turns out, it is not so easy.  I looked up the percent of wealth held by the 1% in several different sources and found that it was almost 40% in April 2000, 35.4% as of 2010, 35% in 2007, but also 42% in 2007 (from another source), 40% in October 2011, and also 40% in 1995.  Where do these numbers come from?  They can't all be right.  Who do you trust?

It is also interesting that to be in the top 1% by income, you must earn more than about $470,000 per year.  So that evil top 1% by income, who are not paying their fair share, includes everyone playing in the NBA and all but the minimum salaried rookies in the NFL and top golfers and your favorite movie and TV stars, not just hedge fund managers and bankers on Wall Street.

With a little critical thinking, it turns out that numbers everyone throws around so confidently have problems.  And, by the way, the poor are not getting poorer.  According to a Congressional Budget Office report, the growth in average real after-tax household income for the bottom quintile of wage earners from 1979 to 2007 was about 18 percent, not a lot, but not poorer either.  ("Real" means inflation-adjusted.)

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