People who say it cannot be done should not interrupt those who are doing it. Welcome to From On High.

Thursday, March 09, 2006

'8,000 desert during Iraq war'

One learns to use statistics to one's advantage in the business world. It helps separate good leaders from bad. And don't let anyone kid you. All statistics are "malleable." Not to say - necessarily - false. The art is in deciding which statistics you choose to emphasize and which you intend to bury. I became really good at it over the years and find myself effortlessly sifting through data even today in order to build a case for this expenditure or to launch that initiative. I'm knee deep in a project today that will involve a major expenditure and will require a mighty "sales" job in order to get it approved. Statistics will be my friend.

I bring this up for another reason. Because I know how easy it is to cherry-pick statistical data, I've become very skeptical of any pronouncements based on this data or that. Yesterday's post regarding global warming statistics is a great example. The planet is warming or it's not, depending on the statistics you use. I love it.

Today brings another example where statistics are used to create a false impression. James Taranto has the story in The Wall Street Journal's "Best of the Web Today":

What's for Desert?

The U.S. military's desertion rate "has plunged since the Sept. 11 attacks in 2001," USA Today (link) reports:

The Army, Navy and Air Force reported 7,978 desertions in 2001, compared with 3,456 in 2005. The Marine Corps showed 1,603 Marines in desertion status in 2001. That had declined by 148 in 2005.

The desertion rate was much higher during the Vietnam era. The Army saw a high of 33,094 deserters in 1971--3.4% of the Army force. But there was a draft and the active-duty force was 2.7 million.

Desertions in 2005 represent 0.24% of the 1.4 million U.S. forces.

Accompanying the story is a chart that shows Army desertions have declined every year since 2001.

So how does USA package this good news for the military? As bad news: The headline reads "8,000 Desert During Iraq War," and the first paragraph begins:

At least 8,000 members of the all-volunteer U.S. military have deserted since the Iraq war began, Pentagon records show, although . . . (link)
There are three kinds of lies: lies, damned lies, and statistics. Benjamin Disraeli (1804 - 1881)

Don't Make Us Come Over There

I'm getting more and more troubled by what's going on over in Virginia's wayward western counties (some insist on referring to them as West Virginia). We may have to go over there and take them back - before they inflict any more harm on themselves.

Case in point: Rick Wilson has an article in today's Charleston (WV) Gazette. How he was able to gain prominent space in this, West Virginia's premier daily, is beyond me. It has to be his good looks. It sure as hell can't be because he knows the first thing about business development. Get this:

Pass the minimum-wage hike

The West Virginia Senate now has the chance to take a preliminary step on the high road to economic development by raising the state minimum wage. (link)
When I read that I tossed my wheaties. "The high road to economic development" is paved with an increase in the state's minimum wage, an increase that would be enjoyed by a relative handful of the state's citizens. Sure.

So, what are Wilson's justifications for such a statement and for advocating an increase in the minimum wage?

  • Economic growth. According to a 2000 report from the National Economic Council, “Since the 1996-1997 increase in the minimum wage, the American economy — and labor markets in particular — have continued to perform very strongly. Between September 1996 and February 2000, 10.2 million jobs were created ... even stronger growth than in the previous two years.

The economy has done well and the Redskins won the Super Bowl. These two facts are attributable equally to an increase in the minimum wage.

  • In retail trade, which has a large concentration of minimum-wage workers, there were 1.4 million new jobs.”

The retail industry has a large concentration of all minimum wage jobs, it's true, but minimum wage jobs are a fraction of all retail jobs (we're back to those perplexing statistics here). Wal-Mart, Kmart, Sears, Target, Costco, etc. all overwhelmingly pay out an average hourly wage that exceeds either state or federal minimum wage requirements. The minimum wage is generally irrelevant to them.

  • Job growth.

Horse shit.

  • Stimulating local economies.

Only if we allow companies to print their own money. Otherwise an increase in payroll has to be offset by a reduction in another outlay or an increase in the prices a company charges for its goods or services. Money goes from Peter to pay Paul. Only the tax man benefits.

  • Small-business growth.

You have to be joking. If it stimulated small-business growth, why wouldn't every small business owner pay his or her people $28 an hour?

  • No link with business failures.

That's comforting but unproven. And unprovable.

  • Reducing some serious business problems. The CEO of Costco, Jerry Sinegal, told Business Week in 2004 that “Paying your employees well is not only the right thing to do but it makes for good business.”

Jerry is absolutely right. But what does his quote have to do with the minimum wage?

Higher minimum wages make it easier to recruit, train and retain workers. They reduce absenteeism and increase morale and productivity.

We went from Sinegal's legitimate pronouncement that paying employees well retains productive motivated employees to Wilson's assertion that raising the state mandated minimum wage retains employees. Sinegal said no such thing.
  • An article in The Wall Street Journal featured an interview with Kathryn Wylde, president of the Partnership for New York City, a small-business advocacy group. Wylde cited turnover and training as key reasons why entrepreneurs are under greater pressure to pay more than the minimum wage. “This churning of workers is their single biggest expense,” she says. What business owners might save in payroll expenses, they are losing in “the cost of recruitment, human resources and lost investment in training people.”

Again, she's right. And I encourage business owners to follow her advice and to pay your employees that which you can afford, that which is competitive in your marketplace, that which helps you retain your employees, and that provides each of them with the necessary incentive to perform to your expectations. They key word being afford.

I also encourage state bureaucrats, sleezy politicians, and mindless newspaper editorialists to stay out of the day-to-day decision-making of small business owners.

I'll end this by focusing on the impact Rick Wilson's (director of the West Virginia Economic Justice Project) efforts have had in stimulating West Virginia's economy to date:

Analysis: State's Economic Climate Poor
W.Va. among five states to receive low marks in 2006 development report card.
Story by Lesli Forbes, The State Journal

Economic development in West Virginia is a tough business, according to a recent state-by-state analysis.

The Corporation for Economic Development in its 2006 Development Report Card for the States gave the Mountain State an F for economic performance, an F for business vitality and a D for development capacity. The group said West Virginia's "economy is doing a poor job of providing opportunities for employment, income and improving quality of life." (link)

Rick Wilson is an advocate for the state of West Virginia to continue down the path that has brought it to this point ... of basketcase.

You folks over there in West Virginia, you keep listening to guys like Wilson and we'll be over there to take back control sooner rather than later. It's going to be up to you.

That's Funny

"So where did you get your Juris Doctor degree?"

"Marshall Law."

Okay. Maybe it isn't all that funny. But it may be a reality if Marshall University has its way.