The other day, we are told that if we walk anywhere in New York, we will bump into a few millionaires (link). This week, we are told that wherever we go in the US, "Roughly, every third person you pass on the street is going to have debt in collections" (link). The woman who said this has a PhD in Economics from Cornell.
Oh please. The claim comes from yet another misinterpretation of a statistical average. That statistic appears to be "35.1 percent of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records."
Firstly, not every American has debt; indeed later in the same article, the reporter told us "people increasingly pay off balances each month" and evfen more directly, "only about 20 percent of Americans with credit records have any debt at all". Secondly, not every one has a credit record: for example, kids and students typically don't have credit records but you will pass by them on the street.
Thirdly, people who have debt trouble are not evenly distributed across the States, nor within a state or even a county. Again, the reporter helps us by telling us "the delinquent debt is overwhelmingly concentrated in Southern and Western states."
Besides, the statistic did not indicate a time frame. Is it 35 percent who have ever been reported to collections, or 35 percent who are currently in collections, or some mixture of the two? If the statistic includes anyone who is current today but was in collections in the past, then again, if you bump into such a person, you would think he or she does not have debt in collections.
It seems that the reporter has more numbersense than the PhD economist.
The underlying problem is that the statistical average is computed for a specific subgroup of Americans and the statement about walking on the street is for a different subgroup of Americans. In the prior example (link), the statistic about all New Yorkers is liberally applied to New Yorkers you meet on the street.
If a number is to be used to describe a different subpopulation, we must first adjust it to that group. If we aren't comfortable with such adjustment, then don't try to extrapolate.