A persistent failing of official statistics is that they tell a national story, not a human one.
Thanks to the ONS we can find out how many people are unemployed, for example, at a given time, and compare it with the snapshot of the same numbers for a different period. That’s a useful insight into the state of the nation and how it may be changing.
But it doesn’t tell us the true experiences of those involved.
Say there are a million unemployed people in year one, half a million in year five and two million in year ten. How many of the original million were still unemployed five years later? Perhaps they all found work and the half million in year five were different people entirely. Or perhaps only half of them found work, and the other half remained unemployed in the better economic times of year five and were still unemployed in year ten.
This may be a side issue if your aim is just to get the big economic picture right. If you want to solve the social ills that come with long-term or even permanent worklessness, though, the distinction matters a lot.
For that matter, even those who are only interested in the headline figures would eventually become concerned – it’s demonstrably harder to get people back into work the longer they have been unemployed.
Some insight can be gleaned from the bulky categories of the data on long-term unemployment, but even that doesn’t track people as they flow through the system. Instead it tells you how many people have been unemployed for a particular length of time, and leaves the details of what is happening to guesswork.
The importance of tracking data compared to such snapshots can be seen in today’s report from the Resolution Foundation on low pay. They followed the earnings of the 4.7 million people classed as low paid in 2002 in order to see how they did over a decade.
Here’s the summary of their findings from The Times:
“…of the 4.7 million people who were low paid in 2002, about 1.3 million (27 per cent) did not see their income rise at any point during the decade and a further 2.2 million (46 per cent) cycled in and out of low pay but had failed to escape it for good by the end of the decade.
Only 800,000 workers escaped low pay – two thirds of median incomes – by moving up the earnings ladder without slipping backwards by 2012. A further 400,000 workers retired or left the labour market.”
That’s a pretty depressing story, which would not be easily told from the headline statistics. Seeing the total number of people on low pay in 2002 and 2012, any observer without this kind of tracking analysis would be left to guess whether they were the same people or whether a new tranche starting their careers had replaced those whose careers had progressed in the course of a decade.
It is a scandal that in modern Britain so many people have found themselves unable to climb up the earnings ladder. It’s the way of the world (and an iron law of measurements based on what you earn in relation to the average) that not everyone will climb out of low pay in a given period, but we should aim to have a society and an economy in which far more than 17 per cent are able to do so.
That’s a question of social justice, but it’s also a question of how to deliver growth. If hard work brings little chance of progressing, then why work hard? If good people are trapped on low incomes regardless of their efforts, then companies miss out on the full contribution they can make.
Looking at this report, it’s more understandable why workplace efficiency has been falling in recent years, too.
A successful Conservative mission to rebuild the economy, improve equality of opportunity and build a more meritocratic, hopeful society needs better data in order to provide both motivation and measurement of success. Reforming things based on guesswork and hope will always be inferior to decisions based on the facts.