The Procrustean bed of statistics

Michael Taft: In Greek mythology the rogue Procrustes had an iron bed in which guests were invited to rest on. He would then hold them down and, if they were too large he would lop off their limbs; if they were too small he would stretch them. The last place you want to be is on Procrustes’ iron bed, especially if you don’t fit.

Suzanne Kelly brings the spirit of Procrustes’ iron bed to her table of statistics in today's Irish Times. She took households with a couple with two children and compared their net incomes in three different situations:

PAYE employee: €36,078
Self-employed: €35,159
Unemployed: €40,261

Wow. It would appear that if a below-average worker loses his or her job, or the self-employed see their business go down the tubes, they shouldn’t despair. They should celebrate their big income increase. These ‘facts’ led Suzanne to comment:

‘A social welfare package where the cash and benefits exceed wages will stop potential staff from returning to work when the economy lifts.’

Maybe. Except that Suzanne has put this set of statistics on a Procrustean bed where she has pulled and chopped them to fit her argument.

To arrive at the income for the unemployed scenario she includes Rent Supplement. This is a big item. It makes up €12,168, or over 30 percent of the total. Without this supplement, the couple would be on an income considerably below both the PAYE employee and the self-employed.

So how valid is it to put this Rent Supplement figure into the total for the unemployed? Not very. Not very at all.

The 2008 Social Affairs Annual Statistical Report shows that 95 percent of all those on Jobseekers Benefit do not receive Rent Supplement. When you add up all those on some form of unemployment payment (benefit and allowance), 90 percent do not receive Rent Supplement.

But for that small minority who do qualify, would they get this amount? €12,168? On average, no. In fact, they would get half that amount. The 2008 Social Welfare report, again, shows the 74,000 recipients of Rent Supplement receiving on average €5,953 a year (there is no breakdown by welfare payment). The reason why this is so much lower than the headline maximum rate is that Rent Supplement is rigorously means-tested.

So, we have a table that includes an item which only a very small minority of unemployed obtain and of those who did get it, on average they receive less than half the amount as the table states.

If Suzanne had included these caveats it wouldn’t have supported here statement. But, hey, if the facts don’t fit – just chop and stretch until they do, just like Procrustes. Of course, not many of his ‘guests’ survived the ordeal.

Posted in: Fiscal policy • Investment • Welfare

Tagged with: Rent Supplement • jobs • social welfare

Michael Taft     @notesonthefront

Michael Taft is an economic analyst and trade unionist. He is author of the Notes of the Front blog and a member of the TASC Economists’ Network.