Why numbers can be deceiving
Numbers, by themselves, don’t lie. They can be misleading, however, if not put in the proper context.
Three recent tire industry news items involving legislative bodies illustrate this point.
1. The New York State Assembly passed a ban on the use of lead wheel weights by a 79-20 margin. Assembly Bill 8687-B amended New York’s environmental conservation law by adding a section prohibiting both the use and sale of wheel weights containing lead.
One week later, the New York State Senate, by a 35-26 margin, passed its own version of the same bill, A8687-B. By then, the margin of the Assembly bill had increased to 112-28!
Assembly Member Linda Rosenthal, who originally introduced the bill, said after-the-fact votes happen in her state. I guess it allows some legislators to either a) jump on the bandwagon, or b) take a moot stand that coincides with what their constituents think, thus helping to ensure their continued support (and votes).
Although Rosenthal considered the issue a no-brainer, there were still legislators who disagreed with her, before and after the fact. The numbers still showed that the bills passed.
“It’s useless to resist progress,” she told me. Maybe, but who defines progress?
2. The Massachusetts Senate unanimously passed its version of the Motor Vehicle Owners’ Right to Repair Act on July 6. That gave the House of Representatives 25 days to pass it before the legislative session ended for the year.
The 38-0 vote seems to say it all: The Massachusetts Senate is unequivocally behind the Right to Repair Act. The decisiveness of the vote — only two members were absent — also says a lot about how well the Massachusetts Right to Repair Coalition had lobbied for S. 2517.
But was the vote a good indication that the bill would be passed by members of the House?
“Unfortunately, no,” said coalition member Paul Sullivan, vice president of Sullivan Tire Co. Inc. in Norwell, Mass., prior to the session deadline. “The House has a real glut in terms of the number of bills.”
“We have the votes,” said Art Kinsman, coalition coordinator, with two days left in the session. “It’s a question of whether it comes to a vote.”
Among the 15 pieces of legislation being debated, the top priority was a controversial bill specifically licensing the building of three casinos in the state, plus the use of slots at two racetracks.
With the clock ticking, and proponents and opponents of federal Right to Repair Act legislation watching closely, legalized gambling won out over consumer protection. The Massachusetts Right to Repair Act didn’t come up for a vote.
The bill still could be passed in an informal session, or if a formal session is called before the upcoming elections. For all intents and purposes, however, “right to repair” proponents will have to start over.
“We’d have been in far worse shape if the bill had been defeated,” says Kinsman, who adds the bill will be re-introduced when the new session starts Jan. 1, 2011.
Hopefully, the numbers supporting the new Right to Repair Act will stay the same.
3. City leaders in Kansas City, Mo., want residents to vote on a ballot measure “aimed at reducing dumped tires in Kansas City neighborhoods,” according to the Kansas City Star.
If passed, the measure would raise $150,000 annually by charging each of the 600 tire dealers in the area $250 for a one-year permit. The money would fund the hiring of two full-time city inspectors who “would enforce rules for the proper disposal of used tires.”
Here’s the statement that caught my attention. “City officials... estimate the permit fee, when passed on to the public, would translate to about a nickel per new tire purchased.”
Do the numbers add up? Let’s see.
The cost to the dealer is $250 a year. Because every dealership in the area is affected, it’s not unreasonable to assume a five-cent price hike would stick.
To break even, each dealer would have to sell 5,000 tires a year ($250 divided by $.05). If the dealer is open six days a week, he would have to sell an average of 16 tires a day (5,000 divided by 312 days).
Based on the number of replacement consumer tires sold per year and the number of domestic independent tire dealers, that number is quite acceptable.
As you can see, a lot of numbers are thrown around in the media, especially when legislation is a hot topic. Be aware that, unless they are put in the proper context, numbers can be deceiving. ■
If you have questions or comments, please e-mail me at bob.ulrich@bobitcom.