Friday, November 25, 2011

Economic illiiteracy at the BBC

I was surprised and disappointed to hear the BBC constantly repeat without any significant challenge the government claim that the public sector strikes were going to cost the nation half a billion pounds. This is a ludicrous, made up figure, based on the most spurious methodology. Consider, for example, the amount attributed to the 'cost' associated with parents having to take a day off work because their children's school will be closed. Some of those parents will arrange childcare, which is actually a boost to the economy in the way that economists measure it. Others will use up their annual leave to care for their children, which might be a shame for them, but does not represent a cost to the economy at all; indeed, since untaken holiday is treated by company accounts as a liability it is arguably also a boost to the economy.

Similarly, much of the cost is derived from the loss to the economy of people waiting at airports to be processed. Surely many of those people will be visitors to the country; while it's a shame that their entry to Britain will be a miserable experience, the time that they lose was never going to figure in the national accounts. And what about the people who spend their time in the queues making phone calls or sending emails? Many of them are surely as productive as they would be if they were the other side of the barrier.

The half a billion claim is economic illiteracy, and it was wrong of the BBC to promote it in that way.