Lies, damned lies, and statistics

Edmund Burke once lamented that “the days of sophists, calculators and economists are upon us.” It seems that little has changed, as we are bombarded daily with the latest data and statistics, usually comparing this month with the last, or this year with the previous one.

The emphasis on the most immediate period can lead to results being reported as if the trend were the opposite of what it really is. This is especially the case when people select data to reflect their arguments.

I was reminded of this when listening to the former ACTU President, Simon Crean, answering a question in Parliament this week about the Fair Work Act. During his answer, Mr Crean said: “There has been a significant lessening of industrial disputes, almost halving of them, since we came to office.”

Crean seemed to be repeating assertions made by Workplace Relations Minister, Senator Chris Evans, who said in March that the latest ABS data “confirms that under the Fair Work Act industrial disputation is continuing its long-term downward trend.”

Rather than taking these assertions at face value, I thought it useful to check the facts. A comparison of the ABS data in the last year of the Howard government and the past 12 months reveals a very different picture.

As the 2007 election was held on November 24, it is appropriate to include the data from the December quarter in any comparison of industrial disputation under the previous and current governments.

A total of 5.4 working days per thousand employees were lost to industrial disputation in 2007. This comprised 0.8 days in each of the March and June quarters, 1.2 days in the September quarter and 2.6 days in the December quarter.

Compare this to the most recent four quarters, where the data reveals 2.4 working days lost per thousand employees in the June 2010 quarter, 4.7 days in September 2010, 2.7 days in December 2010, and 2.0 days in March 2011. This is a total of 9.2 days lost per thousand employees – almost double what it was in 2007!

For Simon Crean to claim that there has been almost halving of the days lost since Labor came to office relies on a statistical sleight of hand. After Labor was elected, industrial disputation soared to over 17 days lost per thousand employees. By commencing his comparison in 2008, Crean conveniently ignores the much lower data from the last year of the Howard government.

The reality is that over the course of the Rudd/Gillard government, industrial disputation has been at very high levels. The more recent reduction is welcome, but it is misleading to suggest that days lost to industrial disputes is now much lower than it was under the Howard government.

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