Tuesday, October 12, 2010

Prop 23: "We're in a crisis at least 90% of the time!"

Prop 23 on the California ballot this year proposes to repeal the climate change restrictions in the law AB 32 until the state's unemployment rate drops below 5.5%, and stays there for 4 consecutive quarters.  It embodies the spirit of the "We're in a crisis!" mentality; that is, "We'd love to reduce our impact on the environment, but the economy is bad, so Now Is Not The Time!" 

One might wonder, though, just how often does our unemployment rate drop below 5.5%, anyway?

The answer, as the plot above shows, is not very often.  Out of the 416 months for which CA has kept unemployment rate monthly values (since 1976), only 81 of those months had unemployment rates below 5.5%.  That's 19.5% of the time.

But Prop 23 goes further with its requirements: If it passes, then we will only be able to enforce the restrictions in AB32 AFTER we've had 4 consecutive quarters of unemployment rates below 5.5%.  That means that you have to watch the unemployment rate for 12 months, and if it has been below 5.5% for all 12 of those months, then on the 13th month you can start enforcing the climate change restrictions, and continue to do so until the rate pops above 5.5% again, at which point you have to wait until it stabilizes below 5.5% for another 12 months before you can start enforcing the law again.

So, if we assume that prop 23 passes and that the next 34 years will be statistically similar to the last 34 years, how much of the time will AB32 be enforceable?

Answer: 4.8% of the time.

(Actually it depends on how you count the unemployment rates.  If you are using monthly rates, and interpreting the "4 consecutive quarters" as 12 consecutive months, then only 20 out of the 416 months of the past 34 years would meet Prop 23's requirements, hence 4.8%.  If you are using quarterly unemployment rates (3-month averages of the monthly unemployment rate), then 13 out of the 136 quarters in the past 34 years would meet Prop 23's requirements, which is 9.6% of the time.)

Thus, according to those who would vote for Prop 23, we shouldn't worry about the environment when we are in an unemployment crisis. . . 

. . . and (oh yeah) we are in an unemployment crisis over 90% of the time.

Gee, it's almost as if the backers of Prop 23 (oil companies) chose 5.5% so that AB32, which was passed by a Democratic legislature and signed by a Republican governor, could never be effectively enacted.  And all they had to do was get enough signatures to get Prop 23 on the ballot.

Vote no on prop 23.

(Data for the plot was obtained here: http://www.labormarketinfo.edd.ca.gov/?pageid=164)