“Be kind, for everyone you meet is fighting a hard battle” - Often attributed to Plato but likely from Ian McLaren (pseudonym of Reverend John Watson)

Saturday, March 04, 2017

From the "duh" department...

In my day job, I am an executive in a firm that provides consulting services, materials testing, and construction inspection. We don't work in the area of single family housing but, other than that, if it's being built, we want to be involved. And we're located in Southern California.

As such, we're very interested in the economics of the State and of its various regions. I was reviewing the 2017 "California Economic Summit Roadmap." On the first content page of that 12 page document, I read the following:

 "An additional 6.8 million people are considered “economically fragile,” living in households earning below their area’s median income (which varies by region, from $43,000 a year in the San Joaquin Valley to $64,000 in the Bay Area)."
Indeed. I must point out here that this statement is statistically confusing or, at the least, is poorly phrased. Exactly half of the households in California, or any County, or any State, or the U.S., or any Country earn below their area's median income. And, no matter how hard anyone in government tries, they simply can't fix this problem. Because, well, that's the definition of median! So, clearly, the issue isn't that half the households are below their area's median income but, rather that their area's median income is below the level that would represent not being classified as "economically fragile."

The definition of an "economically fragile" household isn't clearly stated, but surely it can't be "any household below its area's median household income" because, by that definition, one half of households everywhere are economically fragile and will be for all eternity or until Armageddon, whichever comes sooner.

I'm sure that my sophisticated readers were able to infer the intended meaning of this paragraph but, given the level of innumeracy out there, I'm absolutely sure that there are many readers who think My God, half the households in California are below the median household income! Make the rich pay their fare share, that will fix this!" And, of course, if such persons were asked "what fraction of the households in California would you estimate had below the mean household income?" they'd answer "Why, one half, of course! What a stupid question! "

The fact is that, barring an anomaly, significantly more than half are below the mean. For example, in 2014 the median household income in the U.S., per the Census Bureau, was $53,713. The mean household income was $72,641. Clearly, fewer households earned $72,641 and above than earned $53,713 and above. And yet, the mean is what people think of when the word "average" is used. But you knew that, didn't you?

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