Reliable Sources

Barry Ritzholz's friend Invictus continues his discussion of economic misinformation.* He/she or whatever writes:

Misinformation is ubiquitous today. It seems a disproportionate amount of it comes from right-wing economists. Whether through innumeracy or purposeful partisan attempts at misleading the public, they appeal to those in an ideological bubble who simply want their priors confirmed. Jonathan Swift reminds investors of the dangers here: “A Lie Can Travel Halfway Around the World While the Truth Is Putting On Its Shoes.”

This is the world in which we now live. You must engage in information hygiene, be very aware of what sources you rely on, and recognize who are regular fonts of junk science, misinformation, and partisan garbage.

The MacGuffin in this case is the minimum wage, specifically Seattle increasing its minimum wage to $15/hr. in 2014, and a statewide raise to $20/hr. recently. Conservative media went apeshit claiming these moves had caused a massive loss of restaurant jobs. It    was   not   true. There were a few tricks that conservative economists, the Wall Street Journal, the Weekly Standard, the New York Post and the rest of the crowd used to deceive. Here is a short list:

Frame shifting: American Enterprise Institute hack Mark Perry looked at restaurant jobs in Seattle-Tacoma-Bellevue Metropolitan Statistical Area (MSA), whereas the minimum wage increase applied only to the city of Seattle, a much smaller area. In fact restaurant employment in Seattle did not decline but increased steadily in the years during which the increase was implemented.

Ignoring the denominator: The New York Post ranted that 10,000 restaurant jobs had been lost in California following the minimum wage increase. There are 1.47 million restaurant jobs in California, so even if that were true (which it isn't), it would be barely noticeable. [An I'll just add that correlation does not equal causation. We do not know what would have happened to restaurant employment in the absence of the minimum wage increase.]

Flat out lying: Since Newsom signed the legislation in August 2023, restaurant employment in California has increased by 2,000 jobs. It may have been down a bit at the exact time chosen to make the claim. It goes up and down month to month, which brings us to the next trick . . . .

Misapplying data: Restaurant employment is very seasonal -- it regularly peaks in the fall and drops off in January. So if you choose a winter month without seasonal adjustment, you will reliably, and inevitably, see a decline in restaurant employment. That's what the conservative propagandists did. With seasonal adjustment, restaurant industry employment continued its upward trend (following the pandemic) without interruption.

Invictus concludes:

A friend at the St. Louis Fed confirmed the shenanigans: “Using [non-seasonally adjusted] data is one of the most common mistakes I see in data reporting.   Even when I talk to the public people seem skeptical of the seasonal adjustment process and why it is done.”

If I was teaching an Econ 101 class, I would give this student an F. That a  professor and a  economic institution made these errors is professionally embarrassing. That the WSJ repeated is journalistic incompetency. That the NY Post trumpted it is simply par for the course.

So, the point remains: Wall St. Journal, Hoover, NY Post are generally not where you want to be getting your news, assuming you’re a truth-seeker.

Sadly, as Ritholtz  appends:

There are two bad players here: The partisans who know they are abusing the data, and the naive journos being taken advantage of whose editors are too innumerate to understand even basic modeling issues like seasonal adjustments.

The problem with this nonsense comes from Brandolini’s law:

The amount of energy needed to refute bullshit is an order of magnitude bigger than that needed to produce it…

So again, I beg you: Do not rely on these dishonest, partisan hacks for your information. They are lying to you. The reason is that they represent wealthy greedheads and they are trying to screw you. And that is why they also donate millions to the Republican presidential candidate. That is the purpose of their project.

 

 

*Is this about public health? Yes! Public health is about all public policies, and economic security is really important. I had to pass qualifying exams in economics, sociology and political science for my Ph.D., so I'm not a dilettante here.