Data to Virtue

"Wisdom is to know what to do next; virtue is doing it." -- David Starr Jordan, American Naturalist -- Observation collects data from which we build knowledge. Wisdom makes sense of that knowledge. However, it is not enough to merely develop wisdom, we must act on what we know. That is virtue--and the purpose of this blog--from data to virtue.

Saturday, February 18, 2006

Unemployment and Poverty

THE FIGURE:
In the figure below I have plotted the percentage of the population that is in poverty (red line) and the percentage of the workforce that are unemployed over the last few decades. For an explaination of the business at the bottom of the figure see the data detail. (Click on the figure for a larger version.) THE TAKEAWAY(S):
The good news is unemployment and poverty rates in the USA have remained relatively unchanged for quite some time. The bad news is, both could be lower. There tends to be cycles to the poverty rate (red line) and unemployment rate (green line), but the overall median remains relatively unchanged.

DISCUSSION:
I have spent a long time trying to get the statistical significance of any correlations of poverty and unemployment levels with political parties controlling the house, senate, or presidential office. There is absolutely no statistically valid correlation. In other words, it doesn't matter who's in office--democrats or republicans--changes in these categories are independent of political majorities and have their own cycles based on something else. If anything could be said from this additional analysis (not with statistical certainty, but appearance) it would be....
1-Unemployment seems to oscillate in five year cycles independent of politics.
2-There is a slight lowering of both unemployment and poverty if the house and senate have parity (almost equal number of republicans and democrats).
3-There are slightly more years where these levels trend down with democrats as president than with republicans.
These observations stem from analysis beyond that presented in the above figure.

To put the USA figures into perspective, here are some numbers from other countries...
country
. . .. unemp. . . poverty
- Vietnam. . . . 1.9
. . . . . 28.9
- Kuwait. . . . . 2.2
- Cuba
. . . . . . 2.5
- Taiwan
. . . . 4.5 . . . . . . 1.0
- Japan
. . . . . 4.7
- UK
. . . . . . . . 4.8 . . . . . 17.0
- Sweden
. . . 5.6
- India
. . . . . . 9.2 . . . . . 25.0
- China
. . . . . 9.8 . . . . . 10.0
- France
. . . . 10.1
- Germany. . 10.6
- Israel
. . . . . 10.7 . . . . . 18.0
- Iran
. . . . . . 11.2 . . . . . 40.0
- Iraq
. . . . . . 25.0
- Zambia
. . . 50.0
... as you can see, the USA could be better and it could be a lot worse.

SO WHAT?
Loan money to a small business in a developing country at Kiva Loans http://www.kiva.org/app.php.

Write your representatives and ask them to vote for legislation that provides opportunities to the unemployed and those in poverty and to vote against legislation that favors the "haves" over the "have nots." It is easier to amass wealth if you already have it. The "haves" don't need help getting more.
If you have any resources for groups that help with this type of legislation, contact me so I can check them out.

DATA DETAIL:
The poverty data is from the Census Bureau and the unemployment data is from the Bureau of Labor Statistics. The data on poverty and unemployment rates in other countries is from the CIA World Fact Book.

Tuesday, February 14, 2006

US Income: Who's making it?

THE FIGURE:
This figure shows the pre-tax average income for four different categories of taxpayer incomes.
1-The top 1%
2-The highest 20%
(quintile)
3-The middle 20%
4-The lowest 20%
Note the average income (vertical) axis is in 2003 dollars, so it accurately reflects the income across the years. This just means it's adjusted for inflation. For an explaination of the business at the bottom of the figure see the data detail. (Click on the figure for a larger version.)
THE TAKEAWAYS:
There are few things to take away from this figure.
First, the lower and middle-income earners have not changed in 25 years. Their earning power has remained remarkably unchanged.
Second, the top 20% of income earners has gone up by almost 50%. This is mostly due to the well over 200% increase in the average income of the top 1% of income earners.
Third, it doesn’t matter who was in power, democrats or republicans, the rich get richer and the poor make no gains. In fact, one could say that a democratic president is even better for the rich.
Fourth, if the bottom quintile has gone up only 0.6% over the last 25 years and the top 1% has gone up well over 200% over the same period, into who's pocket is that money trickling? Draw your own conclusions, these are the data. The gross domestic product has gone up virtually every year during this time, but the low income earners are not reaping the benefits of the growing economy. It is true, "The money gushes up and trickles down" (barely).

SO WHAT?
Write your representatives asking them to vote for legislation that supports fair wages for the lower earners. Tell your friends that employee people to pay them fairly. Tell your friends that don't handle their money well about resources to use their money more wisely, like http://www.operationhope.org/smdev/; think about being a supporter yourself.

DATA DETAIL:
I would have plotted this data going back further, but haven't been able to locate the data. This data comes from http://taxpolicycenter.org/TaxFacts/TFDB/TFTemplate.cfm?Docid=467.

Along the bottom, below the $0 axis, shows the relative strength of a given political party (red = republican, blue = democrat). The first line is for the presidency, the second line shows the majority in the senate, and the third shows the majority in the house. A blue area (down) shows a democratic majority. A red area (up) shows a republican majority. Below the party strength lines are the periods of recessions and wars.