Fact-checking Blogger Economics

The Internet should be a transformative technology for political debates; in a matter of seconds you can verify or reject nearly any conjecture, relieving bloggers from the embarrassment of posting complete nonsense. Unfortunately, few ideological adherents avail themselves of this tool, preferring to stick with unsupportable conjecture, something I always enjoy pointing out.

For a rich trove of examples, I read a few articles from Model Minority. It didn’t take long to find this article about the costs of being poor, which includes these verifiable statements:

Look at it like this, if you are working at Target, making $7 an hour, Target is making arguably $100 to $200 dollars an hour off of you. You are taking the short, and the corporation is keeping the rest. What if you were able to keep more of the money you earned for them? Life would be different. On top of that, most of the items that we get from stores are from factories in China, Mexico, Haiti and the Phillipines where women work earning $2 per day. Again, those women are taking the short.

It took me only 30 seconds to find basic financial information about Target and compute relevant stats. In 2010, Target had about $69B in revenue and $3B in earnings. With 355K employees, Target’s revenues are about $94 per hour per employee if the employees work full time, and about $200/hour if they work on average half time. So, the author is right, but only if “making” means “revenues.” However, when she says “keeping the rest” she clearly means earnings. In that case, Target’s earnings per employee are from $4/hour to $8/hour. In that case, the writer is off by a factor of 25x, not a small error. So, she either doesn’t know the difference between revenue and earnings, or she’s really bad at math, or she doesn’t care if she spouts nonsense, as long as the nonsense fits her biases.

The second verifiable fact is that workers in China, Mexico and other places are making $2/day. Bloomberg reports that manufacturing workers in China and Mexico make about $2 per hour. I’d guess that a 10 hour day is more typical there, so for this statistic, the author is off by a factor of 10x, an improvement but still not even in the ballpark.

I certainly would not dispute the author’s theme that prices are higher in poor neighborhoods, or more generally, that life in poverty is abysmal. However, these points can be argued without fabricating statistics, and a decent respect for facts and figures, across the political spectrum, would help moderate the rancor of our debates and bring us closer to agreement.

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