Volume 5, Number 4

April 1992

ECONOMIC REPORTING: How the networks report the news in good and bad economic times

The health of the Canadian economy, be it good or bad, has a direct impact on the lives of all Canadians. Whether one is deciding to open a business, purchase a home, or have children, future economic prospects have a significant impact on that decision. One expects television to provide accurate information to assist the decision-making process.

This issue of On Balance concludes a three-part series which examines national television news coverage of the Canadian economy from July 1988 to March 1992. Economic activity is characterized by a trend known as the business cycle. Boom times push the economy beyond its capacity causing inflation and shortages. One method governments use to combat this instability is to raise interest rates, reduce the growth rate of the money supply and cut back spending. As the economy slows, often experiencing a recession, investment and production is reduced, unemployment increases, but inflation is checked. The economy is ready for another expansionary period. [Crane, David (1980), A Dictionary of Canadian Economics, (Edmonton: Hurtig Publishers), p.32.]

Although these events did occur during the period of this study, television news rarely analyzed economic activity in light of the business cycle. Instead, the facts and figures were selected in order to support one overriding theme: the economy is gravely ill.

Economic health is often measured by a set of indicators released each month by Statistics Canada. These indicators record the performance of various sectors of the economy such as the trade balance, housing starts and industrial production. Unemployment and inflation were analyzed in two previous issues. The gross domestic product (GDP), retail sales and corporate profits will be examined in this issue. What criterion made these indicators newsworthy? And did these reports accurately portray the state of the economy?

ECONOMIC GROWTH NOT REPORTED

The GDP is the value of all goods and services a country produces. Economic growth is measured by increases in the GDP. Economic contraction, or recession, occurs when there is a sustained decrease over two consecutive quarters (six months). Although this indicator is important in measuring overall economic health, neither CBC nor CTV reported the GDP on a consistent basis. Both networks limited their reports of the GDP to the recession.

Statistics Canada reported the GDP increasing 27 times from July 1988 to March 1992. Only six of these increases were reported by the networks. In contrast, the GDP fell 18 times. Television reported almost half of these declines. In other words, contraction was twice as likely to be reported as expansion.

Economic growth received less coverage than economic contraction because reports occurred only during the recession. As can be seen in figure A, from July 1988 until October 1990, the GDP increased in almost three-quarters of the monthly releases. Not one of these increases was reported by either CBC or CTV.

Click here to view Figure A: TV Coverage of GDP in Good Times and Bad

The first instance in which the GDP was reported was at the start of the recession. On 30 November 1990 the figures confirmed that Canada was experiencing a recession. Both networks reported this information. From this point onward, CBC and CTV began to focus on the fluctuations in the growth rate.

CBC COVERAGE MORE NEGATIVE THAN CTV

Although the networks reported on the GDP throughout the recession, the style of these reports was markedly different. Each release of the latest growth figure would produce an array of opinions on the depth of the recession, the manner in which it would affect various sectors of the economy, and the prospects for recovery. On CBC, negative assessments were twice as numerous as positive assessments. In contrast, CTV's commentary was only slightly more unfavourable than favourable.

At the start of the recession, CBC's pessimism was apparent in a report given by Der Hoi Yin on 30 November 1990. She stated: "It's not just that the country's in a recession. It's the rate of economic decline that's the most worrisome. According to Statistics Canada, the economy tumbled 0.8 percent in September, double the 0.4 percent drop in August. This makes for the largest back-to-back decline since April of 1982." Following the statement, Shirley Carr, then President of the Canadian Labour Congress, was quoted as saying: "I say we're in a depression right now."

CTV tended to provide a more realistic picture of the economic situation.

"It's not just that the country's in a recession. It's the rate of economic decline that's the most worrisome."

On the same day Peter Murphy stated:"Over all, this recession may not be as bad as the one in 1982 but there are wide regional differences. B.C. and Alberta, hit hard in '82, may escape a recession altogether this time. But not Ontario and Quebec. They are taking the brunt of the economic downturn."

GDP DECREASES EXAGGERATED

Stories about the decline in the GDP accounted for slightly more than half of CBC and CTV coverage. Neutral assessments comprised 25 and 17 percent of CBC and CTV coverage respectively. Of the remainder, there were four times as many CBC and twice as many CTV assessments that were unfavourable as favourable (figure B).

Click here to view Figure B: Coverage of Decreasing GDP

Both networks used extreme language to describe these decreases. For example, on 28 March 1991, CBC's Peter Mansbridge opened the second story with the statement: "Some horrible numbers on the Canadian economy today from Statistics Canada. Proof that the recession is getting more severe. The economy shrank by almost a full percentage point in January, mostly because Canadians aren't shopping."

Similarly, on CTV Lloyd Robertson stated: "Now a crisis of a different kind. The Canadian economy has had its worst setback in almost a decade. In fact, January was one of the worst periods for the economy since the Great Depression of the '30s....The figures show a drop of 0.9 percent from December, the worst one-month economic decline since 1982."

The previous reference to "one of the worst periods for the economy since the Great Depression" is misleading. Since the 1930s, a period during which GDP declined 11.2 percent, there have been six yearly periods in which the economy shrank, the worst of these being the 1982 recession. Strictly speaking, all of these recessions are "one of the worst periods" but none brought on the economic hardships which occurred during the Depression.

Comparisons to the 1982 recession are also misleading. Simply stating that the decrease in the GDP is the worst decline since 1982 does not give the viewer enough information to make a rational comparison. For example, on 30 November 1990 CBC's Der Hoi Yin stated: "This makes for the largest back-to-back decline since April of 1982." What Der Hoi Yin did not point out was that it was also the only back-to-back decline since April 1982. In 1982 the economy shrank by 3.2 percent; in 1991 it shrank by 1.7 percent.

CBC NEGATIVE WHEN GDP INCREASES

Reports on GDP increases accounted for almost one-half of network attention. Most of these stories focused on the growth which occurred during the second and third quarters of 1991. Slightly over one-quarter of CBC and slightly less than one-quarter of CTV reports were neutral. Of the remaining statements, CTV had more than twice as many favourable as unfavourable statements. In contrast, CBC provided slightly more unfavourable than favourable assessments (figure C).

Click here to view Figure C: Coverage of Increasing GDP

The difference in how the networks reported the increase in the GDP is illustrated on the 30 August 1991 reports. On the "CTV News," Lloyd Robertson stated: "Canada's recovery is off and running...Statistics Canada says the gross domestic product grew by 4.9 percent in April, May and June. That's a sharp turn around after twelve straight months of decline. People were spending more on consumer goods and Canada was doing more trade with other countries. And, the Conference Board of Canada says the recovery is going to continue through next year. It says some provinces can expect growth of more than two percent, while others will do even better. It predicts growth of more than three percent in British Columbia, Manitoba, Ontario and New Brunswick for 1992."

CBC's report on the same day was not as optimistic. The fact that the GDP figures officially ended the recession was not specified by Knowlton Nash, who stated: "Economists say the fact that it's on the rise again is encouraging, but as Paul Adams reports, there's still a lot of hard climbing ahead." Later in the story Paul Adams alluded to the recovery when he stated: "Today's figures show the economy bounced back sharply in the spring, but still recovered less than half of what was lost during the recession. In fact, the recovery is spotty. The depressed fishing industry means Atlantic Canada isn't coming back as quickly. In central Canada, the loss of traditional industrial jobs continue. In Barrie, Ontario, today General Tire announced it's shutting its doors, laying off 800 workers."

CBC Puts Negative Spin on Positive Growth Figures

In other instances, CBC counteracted the good news about economic growth with the bad news about unemployment. In each of CBC's reports about the second quarter of 1991, a period of economic growth, the closing statement focused on factories closing, bankruptcies and the increasing number of jobless people. On 30 August 1991 Paul Adams closed his report with the statement: "Although many economists believe the economy is turning around, they also think recovery will be slow, and that's bad news for the unemployed. It will be many months, perhaps even years, before Canada gains back the hundreds of thousands of jobs lost during the recession."

Good News Tainted

In general, both CBC and CTV had a tendency to emphasize the bad news and tone down the good news. For example, on 31 July 1991 Statistics Canada reported a growth of 0.56 percent, an encouraging sign which was downplayed by television. CTV's Craig Oliver referred to the growth as: "weak, only 0.6 percent, less than April's growth of 0.9 percent." There is no reason to believe that the public would question Oliver's assessment that a 0.6 percent growth in the GDP is weak. However, when trends in the GDP are examined, it is clear that 0.6 percent is quite a good performance. For example, in 1988, when the Canadian economy was booming, the average monthly GDP figure that year was 0.35 percent.

Further, the networks were inconsistent with their description of the statistics. On 28 March 1991, the 0.94 GDP decrease was portrayed as a crisis situation. CBC and CTV pointed out that the 0.94 decline was the worst decrease since the start of the recession. In contrast, on 28 June 1991 the GDP increase of 0.85 percent was treated with caution. Neither broadcaster mentioned that the 0.85 percent growth was the best increase since the start of the recession, or that it was in fact the best increase in over three years.

ECONOMIC COVERAGE FOCUSES ON RECESSION

Analysis of the entire data set produces an interesting pattern of television reporting on the five economic indicators we examined. When the economy is healthy, economic news is seldom reported. The reports which occur during the good times invariably highlight the negative aspects of the economy. As the economy deteriorates, television increases its attention to economic news focusing on the negative downturn of events. In each indicator examined, the unemployment rate, the inflation rate, the gross domestic product, the gross national product, retail sales, corporate profits and consumer spending, the same pattern held. When the indicator performed well it was either ignored or downplayed. Instead, the reports focused on the other indicators which did not perform as well. A year-by-year synopsis of how the networks reported these indicators makes this point clear.

The Canadian economy grew by 5 percent in 1988, second only to the world's largest economy, Japan, which showed a phenomenal 5.7 percent growth. Growth, corporate profits, retail sales, and consumer spending all performed well, an indication of a healthy economy. Both CBC and CTV ignored all of these indicators. Instead, the reports focused exclusively on unemployment and inflation. Although the national unemployment rate was 7.8 percent and inflation was 4 percent, CTV's coverage emphasized the bad news, with almost twice as many unfavourable as favourable statements. CBC's assessments were only slightly more favourable than unfavourable.

Click here to view Figure D: Attention to the Economy

In each 1989 quarter, coverage of the economic indicators we examined continued to receive little network attention. Although the economy was still performing quite well--approximately 2.3 percent growth--CBC's coverage was predominantly negative with three times as many unfavourable as favourable assessments. CTV's commentary was slightly more favourable than unfavourable. Again the reports focused exclusively on unemployment and inflation. Although the unemployment rate had decreased to 7.5 percent, 90 percent of CBC's unemployment coverage focused on the Maritimes and the problems associated with the declining fishing industry.

In 1990, with fear of the recession looming, the networks dramatically increased their attention to the economy. CBC had three unfavourable assessments for each favourable one. CTV was not as negative, with twice as many unfavourable as favourable assessments. Unemployment and inflation continued to receive the most coverage, but when the decline in the GDP signalled the start of the recession, the GDP figures became a regular news event. Once again, although corporate profits, retail sales and consumer spending were strong, none of these indicators were reported.

The majority of economic reports occurred during 1991, the year with the worst economic performance in the period of the study. Both networks made approximately twice as many unfavourable as favourable statements on this issue. During 1991 all economic indicators were reported. Unemployment coverage focused on layoffs in Ontario. Inflation continued to receive coverage, but the low rate was explained as the result of unsatisfactory consumer spending. In addition, only when retail sales and corporate profits fell did they first make television news.

The first three months of 1992 accounted for 7.5 percent of CBC and 9 percent of CTV coverage of the five indicators. A notable difference during this period was that while CTV made twice as many unfavourable as favourable assessments, CBC had four unfavourable statements for each favourable one. The primary difference between these reports was CTV's optimistic predictions. For example, on 31 March 1992 Doug Peters of the Toronto Dominion Bank stated on CTV: "The latest GDP numbers are a plus for the economy. It means that the economy's started to grow again. We'll probably see stronger growth later this year. And that means we'll be coming out of the recession this year."

FISHING AND LOGGING RECEIVE DISPROPORTIONATE COVERAGE

The Canadian economy is composed of many industries. The relative importance of these industries can be measured in a number of different ways. One measure of an industry's value is its proportion of the gross domestic product. Television can influence the public perception of the importance of these industries by the amount of attention it gives to them. This part of the study compares the value of certain industries as measured by their percentage of GDP to the amount of coverage devoted to that industry by each network.

Fishing and logging received the most coverage by network television. Although fishing and logging comprise less than one percent of the GDP, they received 16 percent of CBC and 21 percent of CTV coverage during the period of the study. The majority of these reports focused on the declining fishing industry in Eastern Canada and subsequent layoffs.

Click here to view Figure E: TV Coverage of Industries Compared to Real World Value

For example, on 7 January 1990 CBC's Peter Mansbridge opened the newscast with the statement: "Good evening. I'm Peter Mansbridge. Tonight on Sunday Report, North America's oldest fishing community may soon become a ghost town. The Nova Scotia village of Canso has a tradition that dates back to at least 1604, when French fleets began using the site as a summer fishing base. But, that tradition will die on April the 2nd when National Sea Products closes its fish plant, putting half the town's population out of work."

Growth Industries Ignored by TV News

Finance, insurance and real estate industries were under-reported compared to their proportion of the GDP. While these industries constitute 19 percent of GDP, they were virtually ignored by both networks, receiving only 1.2 percent of CBC and 0.5 percent of CTV coverage. The fact that these industries all performed well during the recession might lead one to the conclusion that good economic news is not important.

Such is the view of David Olive, Editor of Report On Business magazine who stated: "For the purposes of most journalists, the fact that Northern Telecom Ltd. and four of Canada's Big Six banks posted record profits last year (1991) holds less `news value' than the closing of a paint factory employing a 130 workers."   [ Oliver, David (1992), "Cheer Up," Report on Business Magazine, June 1992, p. 11.]

The mining industry also received a disproportionate amount of coverage when contrasted with its percentage of GDP. Mining accounts for 4.5 percent of Canada's GDP. However, it received 11 percent of CBC and 16 percent of CTV coverage. The construction industry also was over-reported. It comprises 7 percent of GDP and received 15 percent of CBC and 14 percent of CTV coverage. The communications industry was also under-reported, accounting for 4 percent of GDP, yet only receiving 0.1 percent of CBC and 2.2 percent of CTV coverage.

Damage to Manufacturing Sector Exaggerated

Manufacturing, which accounts for 19 percent of GDP, received 18 percent of coverage on both CBC and CTV. Although CBC and CTV coverage of the manufacturing sector was proportionate to its value in terms of GDP, reports focused on layoffs and bankruptcies rather than on the restructuring process necessary to maintain Canada's international competitiveness.

On 8 March 1991 CBC's Paul Adams reported: "The recession is also smashing through the industrial heartland of Canada's richest province--Ontario. Last month alone, 58,000 jobs in Ontario disappeared. In the small city of Renfrew, 7 factories shut in the last year, costing 700 jobs. If you're looking for a job around here, as Robert Ward has been doing for two weeks now, expect to hear bad news." Later in the story Deputy Liberal Leader Sheila Copps was quoted as saying: "We are witnessing the de-industrialization of Canada."

On 3 June 1991 CTV reported that Uniroyal-Goodrich was closing one of its plants. The remainder of the story focused on the employees who had lost

Fishing and logging received the most coverage ...

their jobs. The report closed with a statement from employee Robert Perrin: "It's the only job I ever had. I came here right from out of high school. I'm going to be 48 this year. I'll never get another job."

What was not reported by the networks is that the manufacturing industry in Canada and throughout the world is becoming more productive. Alexander Ross, Editor-in-Chief of Canadian Business, explains: "This trend is not confined to Canada and has been evident for the past quarter of a century. Manufacturing's share of total employment has dropped from 23.5 percent in 1966 to 15.8 percent last year (1991). The same secular decline is occurring in the U.S.--and even in those manufacturing powerhouses, Germany and Japan. Yet in those countries, and Canada too, manufacturing's share of total GDP has not declined." [Ross, Alexander (1992), "The Making Of A Raging Optimist," Canadian Business, July 1992, p.98.]

Further, while the recession caused much hardship for those who lost their jobs in the manufacturing industry, "it also means that Canadian manufacturing is emerging from this recession in better competitive shape than it's been since the 1960s." [Ross, Ibid, p. 98.Note According to Jeff Rubin, Chief Economist at Wood Gundy Inc., "The Canadian manufacturing sector, which has shed 363,000 jobs since 1989, is now more competitive than at any time during the past 30 years, and is poised to lead an economic recovery that next year will give Canada the fastest growing economy in the industrialized world." Ross, Ibid, p. 98.]

TELEVISION QUOTES UNNAMED ECONOMISTS

Over half of the statements made on the economy originated with the reporter or anchor of the story. Of the remainder, the primary source quoted by both networks was economists. Statements from economists comprised one-fifth of CBC and slightly under one-fifth of CTV attention. However, of the statements attributed to economists, over one-third were unnamed.

Click here to view Figure F: Sources on the Economy

For example, on 6 March 1992 CTV's Sandie Rinaldo stated: "There was no sign of an economic recovery today in the latest figures from Ottawa. They show Canada's unemployment rate at it's highest level in seven years. Unemployment in February was 10.6 percent-that's up from 10.4 percent in January. It means almost 1.5 million Canadians are officially out of work. It's the highest rate since April of 1985 and economists say it could get even worse." Nowhere in that story was an economist quoted.

The Federal government was also quoted regularly by the networks. It received 16 percent of CBC and 17 percent of CTV coverage. All other political organizations, including the opposition parties and the provincial governments, accounted for only 10 percent of CBC and 12 percent of CTV sources' statements. Business representatives accounted for 17 percent of CBC and 9 percent of CTV coverage.

METHODOLOGY

Results on the GDP are based on census samples of 13 "National," and 13 "CTV National News" stories from July 1, 1988, to March 31, 1992. Results on the entire economy study are based on census samples of 130 "National," and 115 "CTV National News" stories from July 1, 1988, to March 31, 1992. All stories appearing during that time were coded, representing a total population rather than a random sample of stories.

Three researchers were employed in coding the news stories. The researchers were selected on the basis of their differing political views. To assess the clarity of the research instrument and measure consistency, tests of inter-coder reliability were conducted throughout the procedure. A high level of intercoder reliability (0.88) was obtained.

Further information or details on the coding design and methods may be obtained by contacting the National Media Archive.

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