I like to share analogies that explain complex topics. I do it for two reasons. First, if it helps me to understand a topic more clearly, then I assume it will help others. Second, good analogies offer instructive lessons on effective communication.
Today’s analogy comes courtesy of Neil Irwin, a senior economics correspondent for the New York Times. The topic is the September jobs report and what it tells us about the current state of what Irwin calls the ‘bizarre 2020’ pandemic economy.
First, the numbers.
On Friday the Labor Department reported that U.S. employers added 661,000 new jobs, a fewer number of jobs than economists had expected. The unemployment rate fell from 8.4% in August to 7.9% in September, a slightly better number than economists had expected.
Those are the hard numbers. It’s in the interpretation where things get murky, confusing, and complicated.
In any normal month, 661,000 jobs would be considered a stunning number of net new jobs. Yet analysts and commentators on Friday said it reflects a ‘deceleration’ in job creation and an economy that’s ‘losing momentum.’ A CNBC headline called it ‘massively concerning.’
The bureau of labor provides a mountain of statistics in its reports. If you’ve never seen a report, here’s the press release for September. You’ll find a mind-numbing display of statistics—and it’s only a top line summary.
Neil Irwin sorts its out with a simple analogy, likening the economy to a bathtub.
It’s essential to understand three concepts, says Irwin. “The level at which the economy is functioning, how fast it is improving, and whether that speed is accelerating or decelerating.”
Now think of water in a bathtub.
First, the water level reflects the functioning of the total economy (more jobs and growth means a higher water level until it reaches full capacity). How are we doing? According to Irwin, “The level of the bath water is very low.”
Second, is the water level improving? Despite the layoffs announced this week (Disney, Allstate, Shell, and others), the water level is rising. In fact, “It’s being filled rapidly,” says Irwin. Remember, 661,000 net new job represents one of the best months in modern record keeping.
Third, it’s time to check the spigot. This is where Irwin and other experts see problems ahead. “The spigot is being tightened so the pace at which the water is rising has slowed.”
Bottom line: at the current pace of job growth, it will take 17 months for the American economy to grow to pre-pandemic levels.
And now you know why many economic experts are concerned about a jobs survey that—in any other year—would have been a blockbuster report.
The bathtub analogy is an effective analogy for several reasons.
1. It’s visual.
A key element of persuasion is the ability to paint a picture in the mind’s eye. I can ‘see’ a bathtub. I can picture a rising water level, water pouring from a spigot, and even the drain sucking water out as fresh water comes in.
2. It’s familiar.
An analogy brings clarity to an abstract concept. It does no good to use a comparison that is unfamiliar to your audience. We all know what a bathtub looks like.
3. It explains.
The goal of an analogy is not just to show a similarity between between two things; it’s to explain. By definition, an analogy is more complex than a simple metaphor. It might require a few sentences to make the connection, but in doing so it makes you think and understand a concept more thoroughly.
If you’d like an even simpler explanation of the September jobs report, we can turn to another expert communicator. According to Grant Thornton chief economist, Diane Swonk, “This is a red flag. We need aid now.”