Give Us Economics News We Can Actually Use
'The pen is mightier than the sword." So said English author Edward Bulwer-Lytton almost 200 years ago. This adage has proved true over the centuries, and even more so in recent times with the advent of fake news and "alternative facts". But perhaps even more dangerous than untruths are irrelevant truths. One of my bugbears is the way the media decides what makes the news. The sword wielded by editors is often blunt when communicating facts that actually matter to the society they serve.
You would think the fourth estate would reflect the facts and news that are most relevant to people. However, most of the time we get told what we should care about, and we somehow convince ourselves that what we are fed is what matters, when there are more important truths.
Take, for example, the tough economic times we are often told about. Yes, it's true, our economy has been growing at an anaemic rate for a long time now. But how does the average South African know that? What are the indicators - that he can relate to - that should tell him this, and, more important, once he knows, what is he supposed to do about it?
Economists use all sorts of statistics as indicators of economic fortunes for countries. I have often heard commentators say that retail and vehicle sales numbers are a good indicator of where the consumer, and therefore the economy, is sitting.
Maybe that works in a consumption-led, developed economy such as the US or even Germany, but in a country where the top 1% own 71% of the wealth, while the bottom 60% control only 7% of the country's assets, according to the World Bank, this probably doesn't mean much.
More than 55% of South Africans, or 30-million people, live below the national poverty line of R992 a month. In relative terms, few can afford to own a car. So why would we rely on vehicle sales for anything?
Then there is the business segment of the SABC news bulletins. For as long as I can remember, it has been almost entirely made up of economic indicators. What are people meant to learn from a regurgitation of the rand-dollar exchange rate, the Brent crude oil price, the gold price, the platinum price? The list goes on.
My personal favourite is the unemployment rate. Just two weeks ago, Stats SA published its quarterly labour force survey for the first quarter. It showed that SA's unemployment rate had risen from 27.1% in the last quarter of 2018 to 27.6% in the first quarter of this year. Then Stats SA tells us that if we include "discouraged work seekers", the unemployment rate increases to 38%.
In case you are not aware, in technical terms, unemployment only occurs when workers who want to work are unable to find jobs. Therefore, in calculating the unemployment rate, one has to exclude those who have stopped looking for work, because that person is no longer "unemployed" - well, at least by definition. It gets worse. Unemployment is further defined by the US's Bureau of Labour Statistics as people who do not have a job, have actively looked for work in the past four weeks and are currently available for work. So, if you stop looking for work for a month, you are no longer unemployed, even though you are still without work. There are countries that have enough work for all their people. I guess to those countries, this definition of unemployment is relevant.
Obviously, the number all South Africans should care about is the 38% - the fact that four out of every 10 South Africans of working age cannot find work.
If we report on and concern ourselves with relevant information, we may begin to understand and perhaps even solve the problems we actually have - not the ones we wish we had.
This article first appeared in The Sunday Times on 2 June 2019