Kevin DeYoung|5:24 am CT

Wasted Productivity and a Waste of a Statistic

Every year when March Madness rolls around you see headlines about how much money the U.S. economy loses because of wasted productivity during the first two days of the tournament. The idea sounds plausible: thousands of businesses will suffer because millions of employees are watching scores on their computers or watching games on their phone instead of actually working. Wasted productivity will cost hundreds of millions, or even billions, of dollars.

Don’t believe it.

For starters, the numbers assume that U.S. workers are basically digging ditches and when they waste a half hour one less ditch will get dug that day. But in our world that’s not how most productivity happens. People are paid to get their work done. Many employers aren’t bothered by little diversions if they keep morale high. They may actually improve productivity. If they don’t, most of those employees will make up the work they miss on Thursday and Friday by catching up on emails at home or doing a little more next week. You simply can’t compute wasted productivity by multiplying and hourly wage by an hour spent in distraction at work.

Even more importantly, the numbers don’t make any sense. This year the firm of Challenger, Gray, and Christmas estimate that $134 million will be lost in worker productivity. Last year the number was $175 million. In 2008 it was an incredible $1.7 billion. So workers are on their computers and mobile devices less in 2013 than in 2008?

When you read the three page press release from Challenger, Gray, and Christmas (what kind of person reads those things!), the numbers get even more convoluted. The headline says nearly one-third of workers spend three hours per day following the tournament during work. Sounds high, but maybe. The second paragraph, however, says that 3 million employees will spend 1 to 3 hours each day on the tournament at work. With roughly 150 million people in the U.S. workforce, only 3 million employees “wasting” time doesn’t make sense. It’s certainly not a third.

Later in the report for Challenger, Gray, and Christmas, they claim that online coverage attracted 220 million visits in 2012, for an average of 2.2 million visitors per day. What am I missing? The tournament doesn’t last for a hundred days. The math doesn’t add up.

Anyway, the firm gets their 3 million number by assuming that that 2.2 million figure will increase this year. Then, assuming 3 million workers wasting one hour per day, they multiply it by the average hourly wage ($22.38), double that number (for Thursday and Friday), and come up with $134 million. What a crapshoot.

Here’s the bottom line: no one really knows how many workers will follow the games this afternoon. No one really knows for how long they are diverted from work. No one knows what these workers make each hour, or if they are even hourly employees. No one knows whether their bosses are fine with a little March Madness in the office. No one knows whether the wasted productivity is made up elsewhere. No one knows how productive these workers are on a normal day. The statistic is worthless. It doesn’t demonstrate much of anything, except our tendency to repeat statistics without knowing where they come or if they even make sense.

I hope you enjoy March Madness. I’ll be with my two older boys in Detroit at Michigan State’s opening round game.

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