Friday, November 30, 2012

Numbers are People

It's easy to forget this, that numbers are meant to reflect reality (except in pure mathematics in which case they are reality).  I ran into this the other day, when a chart was misunderstood and so transportation costs were double-counted.  With a connection to the real world it was clear that if you're not shipping goods to the dock (it was about forgone export income), then you shouldn't count the cost to ship to the dock (at least not the way we were doing the accounting; I suppose you could use a different method and have them as a savings).

On a larger scale, we often hear about unemployment.  It's always some percent or other.  But people are rarely at 8% unemployment themselves; maybe hours are cut, but they tend to be at either 100% or 0%.  In aggregate things might not look so bad, but no one lives in aggregate; they live their own lives.

Unemployment is actual people without jobs.  People without jobs suffering under stress and lost opportunity.

I ran across an interesting study a few weeks ago, which I have sadly forgotten the name of, which looked at employment decisions by MBA students.  The researchers gave two ways for the students to decide what to do with workers.  One was to give them a set of formulas about productivity and labor and benefit costs.  They'd solve the formulas just like any other.  The other method was to give them lists of workers.  Guess which group laid off more workers.

We don't need job-creators.  We need employers.

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