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Ralsina.Me — Roberto Alsina's website

Percentages considered dangerous: the Clarin story

Short in­tro for for­eign read­er­s: the largest news­pa­per in Ar­genti­na (Clarín) is in a cat­fight with the gov­ern­men­t. There­fore, we are treat­ed dai­ly to sto­ries in the news­pa­per about how ev­ery­thing is ter­ri­ble and the gov­ern­ment is go­ing to eat our chil­dren, and sto­ries in the of­fi­cial TV chan­nel about how Clar­in wants to im­plant danc­ing con­tests and bi­ased news in­to our pre­frontal lobes.

The fam­i­ly sub­si­dies are a re­cent pol­i­cy that can be eas­i­ly de­scribed: if you have a kid and you send him to school, you get a lit­tle mon­ey ($220). That's be­cause hav­ing kids in school is a good thing. This has caused school en­roll­ment to in­crease a lot in one year, mean­ing a ton of poor kids are now back in school in­stead of work­ing in the streets or just stay­ing at home.

Since it's hard for Clarín to go ahead and say that's bad, it has to find an an­gle. How about say­ing that in­fla­tion (which has been rais­ing) is mak­ing the sub­si­dies use­less? It's an idea.

Hav­ing said that, it's hard to take this sto­ry and not say... dudes, you are giv­ing bi­ased jour­nal­ism a bad name.

Here's the ti­tle and in­tro:

The raise in food prices has elim­i­nat­ed a big part of the fam­i­ly sub­si­dies.

De­pend­ing on what in­di­ca­tors you use, the ero­sion can reach 92%

Tak­en at face val­ue, that's pure non­sense. In or­der for that to be right, it wuld mean that the pe­so has lost 92% of its val­ue and it has lost be­tween 10% and 20% de­pend­ing on what you com­pare it with.

What they did in­stead is take the cost of a bas­ket of ba­sic goods that has raised 36.2% (ac­cord­ing to some es­ti­mates) and con­vert that raise in­to pe­sos. That's $404. Which is 92% of the fam­i­ly sub­si­dies you get if you have two kid­s.

What's the prob­lem? Well, of course the prob­lem is that it makes no sense, be­cause it's com­par­ing two un­re­lat­ed things.

Let's con­sid­er two mo­ments in time, at the be­gin­ning of the sub­si­dies and one year lat­er. The basked of goods has raised from $712 to $1116.

Let's con­sid­er the case where that fam­i­ly on­ly has the sub­si­dies, both par­ents are un­em­ployed and re­ceive no help at al­l:

They have gone from cov­er­ing 62% of their ba­sic needs to cov­er­ing 40% so they are ob­vi­ous­ly worse off now than a year ago. But not 92% worse, no mat­ter how you cut it.

A bit more re­al­is­tic: the fam­i­ly had some in­come oth­er than the sub­si­dies. Imag­ine on­ly the moth­er works clean­ing hous­es part time. That means she makes per­haps $500 dis­count­ing trav­el ex­pens­es.

So, a year ago, they made $940 and cov­ered 132% of their ba­sic need­s, and now they cov­er on­ly 84%.

But that ig­nores that pret­ty much ev­ery­one has had pay rais­es in the last year, pre­cise­ly be­cause of in­fla­tion. So as­sume she got a very mod­est raise: 10%, and she now gets $550.

That means she went from cov­er­ing 132% to 89%.

Of course with­out the sub­si­dies they would have gone from 70% to 49%! Try telling that moth­er that the sub­si­dies have lost 92% of their val­ue, and she'll laugh in your face.

Of course that means they are des­per­ate­ly poor, and yes, their salaries are worth less (if you take those num­bers at face val­ue, gen­er­al in­fla­tion was much less than 30%).

But those $440 are some­thing that was not there be­fore. It is not a bad thing, and it is not a use­less thing. And most cer­tain­ly it's not a thing that has lost 92% of its val­ue in a year.

Shame on you Clarín for try­ing to use "math" to con­fuse peo­ple.


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