13 October 2010

more information from the desk

of the uninformed.

These are pretty sad (bear in mind these are including a lot of students who have already had some economics courses....).

"that the median student believes that 35% of workers earn the minimum wage and a substantial fraction think that a majority of workers earn the minimum wage" - This, in fact, seems to be one of those weird conservative talking points that's actually true. Scarcely anyone actually earns only minimum wage salaries. It's somewhat higher than usual right now, but in practice, very few people earn min wage, and of those that do, many are teens just starting out on their working lives.

"profits as a percentage of sales the median student guessed 30%" - no wonder people hate businesses. There are businesses that can make 30% profits, for a while. But this usually happens with some kind of government sanction or a boom/bust cycle in a particular industry (financial sector for instance over the last decade). Competition tends to drag profit margins down to razor thin.

"When asked about the inflation rate over the last year (survey was in 2009) the median student guessed 11%." - This might explain why people are afraid of inflation. Considering we had a rate near zero or negative all last year, I was kind of curious myself how people believed there was an inflation problem.

"When asked by how much has income per person in the United States changed since 1950 (after adjusting for inflation) the median student said an increase of 25%." - Uh. Yeah. Really? Only 25%. Mmmmk. This one reminds me of the geometric scale problem where you fold a piece of paper and ask people if you could fold it X amount of times, how far would it go and they might indicate something across the table but nowhere near the "to the moon or across the country" sort of thinking required to actually answer the question correctly.

The actual survey has some other gold to mine from it.

Median student indicated that somewhere around 40% of prices were set by government. Not so much. Might have been true in the 50s, 60s, or 70s, to a degree. But there are very few regulated monopolies with set prices, even these are usually set profit margins rather than set prices.

40% of students indicated that farm subsidies were to encourage people to farm (presumably so we'd have sufficient and thus cheaper food). Uh. Not really....

Median response of students indicated that they believed the unemployment rate to be in excess of 12% (Back when it was around 7.5). There was a large group with absurdly high responses (>30%)

40% of students indicated that 9-11 caused the 2001 recession (which was already ongoing and technically ended very shortly after 9-11)

Only 5% of students correctly identified the US as the world's largest exporter of goods. Most of the time we were rated 3rd. Naturally we are not a net exporter the way Japan or Germany are, but our economy is so massive relative to these countries that we export far more goods, and a greater volume of high priced goods (relative to say, China).

Apparently the President still has a lever somewhere to control the economy, and/or set tax and budgetary policies. Which explains the "Congress/President should be doing more about jobs" idiocy in the public.

Only a quarter correctly identified the top 3 spending portions of the US budget (SS, medicare, and defence). It wasn't quite as bad about "foreign aid" as I've seen some studies, but there does need to be a massive effort to demonstrate to the public what exactly their money is going to.

Half of students believed that the rich, or rather the "high income", pay the same or less in taxes as a portion of that income. In reality, they pay more, what they do however manage to do is have more income that is less taxed. Still, when you add up the total federal tax liabilities, the highest income brackets pay around 35%. The top 1% pays slightly less of their income than the top 5%, owing to capital gains and the regressive nature of payroll taxes, but otherwise, it's a progressive income tax structure even with modest payroll and excise taxes that are far more likely to burden the poor.

There's still a percentage of students who think that US currency is "backed". It's little more than air really. I'm actually impressed this number was so low though.

There's a huge percentage of students who thought that immigrants were bad and that trade was bad, or at least not beneficial. Immigration was by far less popular than trade. This to me explains why there's a substantial nativist trend and some political calculus to appeal to protectionism on trade (as with the ideas that we should punish companies who outsource or just flat out punish the Chinese).
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