Saturday, August 11, 2018

Selective attention to fact

Political bias and perception often are based on our selective attention to factual information rather to actual "fake news." Today (August 11, 2018) I noticed that several of my right-leaning friends on Facebook were sharing the first of the two stories below, while my left-leaning friends were sharing the second story. Both stories are accurate and factual, both were reported in more than one media source although here I chose to use two stories from one source. There was little bias in the mainstream media, only factual reporting on data reported by government agencies responsible for tracking economic trends. The first story pre-dates the second by 10 days because of differences in the release of data by different government agencies.

Headline: U.S. Workers Get Biggest Pay Increase in Nearly a Decade.
Basic information: Employment cost index, which measures wages and benefits, grew 2.8% in the 12 months to last month June 30, 2018. Reported on July 31, 2018.
https://www.wsj.com/articles/u-s-employment-costs-rose-in-the-second-quarter-1533040473
Headline: Rising U.S. Consumer Prices Are Eroding Wage Gains.
Basic information: Inflation is at 2.9% over the past 12 months ending June 30, 2018, a gain that was last exceeded in late 2011. Reported August 10, 2018.
https://www.wsj.com/articles/u-s-consumer-prices-rose-0-2-in-july-1533904402

Both articles share important pieces of information: 1) wage increases were higher in the last year than in the previous decade and 2) those wage increases were more than offset by increases inflation that was higher than in the previous decade - so people's standards of living did not increase.

Sociology courses can be an important vehicle for educating people about data sources, how to access them directly, what information those sources include and do not include, and how to evaluate them.

For example, the Employment Cost Index reported by the Bureau of Labor Statistics looks at what employers have to pay in both cash wages and in benefits costs.  It is entirely possible (and has happened quite a few times), that much of the increase in the Employment Cost Index comes from employers having to pay more for benefits such as health insurance or retirement payments, than because they are putting more cash in employees pockets through wages. That was not the case in the year ending in June 2018 - both direct wages and employers costs for benefits increased by 2.8%. But this distinction between the cost to employers and the wages received by employees is important for people looking at this type of data to understand and look at how the data source breaks down the Employment Cost Index into its component parts.

Another lesson to learn about data sources is that many types of data including both the Employment Cost Index and the Consumer Price Index (the measure of inflation also provided by the Bureau of Labor Statistics) lump together information from millions of sources into a single index number.  With the Employment Cost Index wage and benefit, data is collected from thousands of employers covering millions of workers, and is an average of all the data collected. That means that some workers may have had wage increase far exceeding 2.8% and other workers had no wage increase or may have even taken wage cuts. A rise of 2.9% in the consumer price index does not mean that everyone across the nation saw all of their costs rise by 2.9%.  Some costs (such as higher education tuition and books) rose by more than 2.9%, other costs rose very little and even some products (such as some electronics) may have come down in cost. Moreover, prices for many things (such as rent and mortgage) vary considerably from one geographic area to another. Some elements of the consumer price index like food prices affect everyone, but others like prices of automobiles only affect those who are purchasing an auto.

Helping people understand the data that affects their lives is an important role sociology can and should play.