How do you rate on the misery index?

March 24 2008 by Ellen Roseman

Economists have a measure, called the misery index, that represents the unemployment rate and the inflation rate added together. If prices go up at the same time as the economy and job growth stagnate, the average consumer feels miserable.

Livio di Matteo, an economics professor at Lakehead University in Thunder Bay, wrote an article in the Winnpeg Free Press (March 8), showing the misery index under various Canadian governments. He added the Bank of Canada’s prime interest rate to come up with a “tri-misery index.”

The results are intriguing, he says. No political party has a monopoly on misery.

The best period turns out to be that of John Diefenbaker (1957-63) when the interest rate, unemployment rate and inflation rate sum to an annual average total of 12 percentage points.

Next follows the current Harper period and the Pearson era (1963-68), which are tied at a total of 13.

After that comes the Chretien-Martin era (1993-2006), which had low interest rates and low inflation but higher annual unemployment rates that came together for an annual average total of 15 percentage points.

Next comes the first Trudeau era (1968-1979), which saw the average annual value of misery rise to 21 percentage points as higher inflation, unemployment and interest rates in an environment of stagflation took hold.

The first Trudeau era was slightly superior in performance to the Mulroney era (1984-1993), which saw an average annual misery value of 22, which in turn was better than the second Trudeau period (1980-84), which also coincided with a major recession and saw the misery index at 30 points.

And what constitutes the most miserable period in recent economic history? The two years spanned by the short-lived Clark government (1979-80) — which incidentally could also be termed the Trudeau interregnum — was the most miserable economic time with an average Tri-Misery measure of 32 percentage points.

So, the misery index is at a low level right now. But things are at a turning point. The U.S. economy is going into recession and Canada could follow suit. And who knows what will happen to inflation if the current commodity boom keeps up?

Is there a misery index for consumers relating to the pain you feel when companies overcharge and overbill you, keep you waiting for a response, then ignore your complaint and treat you as a non-person? If so, I think the misery index is going up.

Just browse through a few of the emails I got this past weekend to see how miserable these readers are feeling.

11 comments

  1. Honeymoon misery

    Mar 24 2008

    Since my horrible honeymoon experience last June, I’ve been trying to get some reimbursement. Here’s my story.

    We arrived in Cuba, accompanied by six of our friends. (We thought it would be more fun to have the wedding party join us.) We were told that the our resort (4 stars +) was closed and we would placed in another resort (2 stars).

    Our room was to be upgraded once we arrived, But there was nothing to upgrade it to, meaning it was the same as everyone else’s. Nothing was done to accommodate the inconvenience.

    The food made us all sick. They were saving the leftovers from day to day. They were filling up the bottled water with tap water (we actually caught them).

    Instead of a fruit basket, we had an orange cut up on a plate. For breakfast in bed, we had one egg for two people, two pieces of bacon, toast and a glass of juice to share — most insulting. There were no flowers in our room as we had been told.

    It rained while we were on a day trip. The rain came through the ceiling of our room, making everything wet. Our lamp and power outlet didn’t work. I called room service and a man came to look and left. All he said was to call for more towels, since we’d used ours to soak up the water.

    A day before departing, we were offered a room change and laundry service for our wet clothes. It was too inconvenient to pack up for one night and I wasn’t going to let them clean my clothes in case something happened to them.

    There were cockroaches and mold in the bathroom. The bedsheets were changed only once in the entire week and we crawled into a sandy bed. Not to mention they didn’t change the towels either.

    They misplaced my marriage licence three times, requiring photocopies each time.

    All in all, it was a horrible trip. When we came home, we thought the worst had happened. Then we found out that our photographer had taken off with our pictures and our money!

  2. Less airline misery

    Mar 24 2008

    Our Air Canada connection to New Zealand seems to be on again. Someone must have read my email in less than the 3 week promise and responded.

    I don’t know if they flag various bookings, but they changed their attitude entirely and rebooked us on an earlier AC flight in a trice.

    So unless something else goes wrong, we seem to be good to go.

    Thanks for being a good luck charm.

  3. Cynthia

    Mar 25 2008

    I had a horrible experience with Greyhound on December 21, 2007. I was travelling to Ottawa from Sudbury.

    They did not announce the bus inside the terminal, nor did it scroll across the departure screen in the terminal. When I boarded the bus, it was packed, of course. They placed people travelling to Ottawa on a bus from the 1980s. If you are a bus traveller, you know there is no legroom on these buses, yet they chose to put a new coach on the Toronto run. There is a 3 hour travel time difference between going to Ottawa vs. Toronto. By the time I arrived in Ottawa at 8 pm local time, my legs were swollen to twice their normal size. If you thinks DVT only occurs on long plane rides, you should take a closer look at bus trip with insufficient legroom as well.

    I emailed the head office when I got home from my Christmas vacation to express my utter disgust with how things were done and handled over one of their busiest season. Their website said they would respond in 3 business days.

    I sent my email in the first week of January and I’m still waiting for a response. I won’t hold my breath. I’ll be flying from now on!

  4. Powell Lucas

    Mar 26 2008

    Another report by an economist. Aren’t these the same clowns that missed the employment numbers, the output figures and the value of the Canadian dollar each and every month for the past year? The same gang that kept saying “we are surprised by these figures and have no explanation for them.”

    As I told my economics instructor in the university course I just completed: “You guys make great economic archaeologists… great at digging up all the excuses for explaining your mistakes.”

  5. Paul

    May 1 2008

    As far as I am concerned, the people at Financialinx are all criminals. I have just had a similar experience with one of the rudest people I have ever had the misfortune of talking to.

    My car was inspected more than 30 days after I left it at the dealership. Financialinx sent me a bill for repairs AND they billed me an additional month for my lease. I was told that I had not fulfilled my contractual obligations when I didn’t notify them that I was turning in my leased vehicle. I took it back to the freakin’ KIA dealership… WTF???

    According to “Barb” at Financialinx, they are not representing KIA, even though the invoice letterhead says KIA Canada Financial Services. I received this bill two weeks ago and now I only have 30 days before they send it to a collection agency.