Tuesday, December 24, 2013

Lefty Economist Distorts Wage Data

The Tampa Bay Times reports:
Amid growing debate about whether to raise the nation’s $7.25 minimum wage, Teresa Ghilarducci, a labor economist with the New School in New York City, offered a statistic that sought to gauge how many American workers are poor.

"We are No. 1 in the world in creating low-wage jobs," Ghilarducci said on the Dec. 15, 2013, edition of the MSNBC show Up. "One out of four workers in the United States is a low-wage worker, meaning that they make 45 percent of the median wage, which is now $18,000 per year. So a quarter of our workers make $18,000 per year. And no other industrialized country has that kind of record."

 Ghilarducci regularly spouts out this data, without putting it in context. TBT provides the full story:
• Part-time workers. As it turns out, the bulk of these 35 million low-income workers -- 23.5 million, or about two-thirds -- worked part time.

Now, some percentage of these 23.5 million workers -- perhaps a large percentage, given the slow economic recovery -- is working part time because they want a full-time job but can’t find one. But others may prefer working part time, such as students or parents of young children.

When we contacted Ghilarducci, she agreed that this was an issue and forwarded recent data from the Bureau of Labor Statistics suggesting that about one-third of part time workers are doing so because they can’t find an acceptable full-time job, while two-thirds are working for non-economic reasons. This suggests that it’s wrong to assume that all, or even most, part-time workers are doing so because of the poor economy.

• Partial-year workers. The Census data also tracks how much of the year workers spent on the job. The data shows that 14.8 million people who earned less than $18,000 worked 26 weeks or less. In other words, 42 percent of all workers earning under $18,000 worked for half the year or less. They might have earned well above that if they’d been paid at that rate for the full year.

This offers another reminder that it’s wrong to view Ghilarducci’s statistic as suggesting that one-quarter of all workers with a full-time, full-year job are making $18,000 or less.
In addition to the distortions that Ghilarducci is making, it should be kept in mind that Ghilarducci is throwing out these half truths as part of her justification for raising the minimum wage. Raising the minimum wage would, of course, would cause more layoffs, making the data Ghilarducci is spouting worse, not better.

Here's TBT discussing Ghilarducci's distortions, without going into her  absurd call for an increase in the minimum wage:
Ghilarducci said that "a quarter of our workers make $18,000 per year." Census data backs up this top-line number, but beneath the surface, there are reasons for caution. 
The number she cites does not refer exclusively to full-year, full-time jobs. Rather, it includes lots of people who had a low income because they worked in a part-time job, or worked for just part of the year. The statement is partially accurate but leaves out important details, so we rate it Half True.
Here is Ghilarducci's desperate, weak defense, as if the full context for understanding data should be relegated to footnotes!
Ghilarducci thanked PunditFact for checking up on her work. "It is important for yakkers on TV to footnote!" she said. "I think I will change my behavior and not give interviews without a follow up with footnotes of my own. So you saved me work. Thank you."


  1. "One out of four workers in the United States is a low-wage worker, meaning that they make 45 percent of the median wage..."
    Um, ya... that is pretty much by mathematical definition. A half of a half is a quarter. Amazing what you learn with a PhD from Berkeley! Watch your wallet when someone starts saying "... no other industrialized country..." Last time I heard that we got "affordable healthcare". Ghilarducci needs a flight to Mumbai, where poverty is defined as 1,200 calories/day.

  2. Leftys just do not get it. The path to prosperity is a pay cut.

    1. Good thing lefties like you are here to remind us that the path to prosperity is mass redistribution of wealth and centralized control of the economy.

    2. Absolutely. The pay cut for politicos and other hordes of government bureaucrats. Preferably all the way to zero.

    3. The path to prosperity is to allow consenting adults to establish their own wages by agreement. Allowing a ruler to tell someone he cannot work for less than some arbitrary amount is the height of paternalism and tyranny.

  3. She's the Commie pinko that wants to confiscate 401(k)s and IRAs and have the government "guarantee" every person a retirement income.

  4. It bears noting that Teresa Ghilarducci is the force behind the idea of nationalizing all 401(k) and IRAs, replacing them with “government retirement accounts.” These national pensions would be entirely invested in US Treasuries. This is obviously a horrible idea, but will probably be pursued by our rulers as a way of sopping up all of those excess Treasuries that no one wants to buy.

    She has testified before Congress in support of the idea, and has suggested that it could be started as a voluntary program whereby the 401s and IRAs would be revalued at pre-crash levels before being converted over. Look for heavy marketing of this as a “safe” retirement plan, first voluntary, then mandatory.

    In the words of Gerald Celente, “If you can’t hold it in your hands, you don’t own it.”
    Be afraid, very afraid…

  5. In the article, the TRUTH METER gives it a "half true".
    What's the difference between "half true" and "half lie".?