Lies, Damned Lies, and Statistics

My mom was a statistics junkie, her favourite quote was  “There are three kinds of lies: lies, damned lies, and statistics.” which was attributed to the British Prime Minister Benjamin Disraeli, by Mark Twain, who really made the quote popular in the United States.

And it popped into my mind earlier this week when I was on Twitter and came across this chart:

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Put out by Statistics Canada, it shows the rate of unemployment, in relation to attained education level.

At first blush it would appear that the lower the education level on the east the more fully employed the population is. This appears to decrease as you move west! Well except for Nova Scotia, they are always an anomaly though…

The unemployment rate is calculated using several indicators in Canada. They use a combination of household and business indicators. So employment status from household surveys (from self reporting) and business (number of jobs) using government payroll reports. This is meant to be used to calculate how many people are employed, and how many jobs there are.

Part of the problem with Statistics Canada’s monthly Labour Force Survey is that it relies on self reporting largely. This is often a snap shot, a cold call, which surveys the public, to answer questions. Randomly selected people are asked by strangers what their current employment situation is.

I don’t know about you, but I simply do not answer calls from numbers that I do not recognize, I can’t even remember the last 1-800 number that I have answered….. I also probably would pause if I was asked questions over the phone; the issue is that there are simply so many scams out there. This of course creates an instant bias. The sample is not really “random” any longer, this can skew the results either way. It is also one possible reason for the wild ups and downs in the numbers that you see.

You see this with poll results during elections, the polls show one party being a sure loss, and then Election Day rolls around and the result is entirely different than the polls predicted.

Really the behaviour of people over time has changed, they are less likely to answer the phone and even more unlikely to feel comfortable revealing personal information over the phone. Likely the long form census being brought back to replace the voluntary National Household Survey should assist in some areas for clarity.

The other problem is that Statistics Canada measures unemployment choosing a representative sample of Canadians, then asks them if they did anything during a four week period to look for a job. So if you are not actively looking, then you are not considered unemployed.

According to Stats Can, http://www.statcan.gc.ca/pub/71-543-g/2016001/part-partie2-eng.htm

The definition of unemployment is the following:

“Unemployed persons are those who, during the reference week:

  1. were without work but had looked for work in the past four weeks ending with the reference period and were available for work; or
  2. were on temporary layoff due to business conditions, with an expectation of recall, and were available for work; or
  3. were without work, had a job to start within four weeks from the reference period and were available for work.”

 

Their definition of “Not in the labour force”:

 “Persons who were neither employed nor unemployed during the reference period. This includes persons who, during the reference period, were either unable to work or unavailable for work. It also includes persons who were without work and who had neither looked for work in the past four weeks nor had a job to start within four weeks of the reference period.”

This creates a large segment of the population which would not be accounted for, those on social assistance, homeless, and working precariously. In order to fully understand the national true unemployment rate you would need to cross reference other data to understand how many people are truly unemployed.

In the graph above, it would appear that your best opportunity in PEI, NS and NL to find work would be if you had less than a high school diploma! That or there is NO ONE in PEI, NS and NL that does not have an education of High School or greater. Where the reality is more likely that those persons are “Not in the labour force”, they simply are not being taken into account.