Roland: The alarming fact is that 90 percent of the people in this country now report that they know someone who is unemployed.
Sharon: But a normal, moderate level of unemployment is 5 percent, with 1 out of 20 workers unemployed. So at any given time if a person knows approximately 50 workers, one or more will very likely be unemployed.
Sharon's argument relies on the assumption that
normal levels of unemployment are rarely exceeded
unemployment is not normally concentrated in geographically isolated segments of the population
the number of people who each know someone who is unemployed is always higher than 90 percent of the population
Roland is not consciously distorting the statistics he presents
knowledge that a personal acquaintance is unemployed generates more fear of losing one's job than does knowledge of unemployment statistics
Any given person would actually be expected to know 2.5 unemployed workers, assuming that ALL UNEMPLOYED WORKERS ARE EVENLY DISTRIBUTED. In other words, there would have to be an equal chance that the 50 workers I know are just as likely to be unemployed as the 50 workers you know.
From ManhattanGMAT Staff
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