Economy

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  • WSJ Op-Ed Bizarrely Claims Lifting Wages Will Increase Teenage Crime

    ››› ››› ALEX MORASH

    Repeatedly discredited anti-minimum-wage researchers took to The Wall Street Journal opinion pages to claim raising the minimum wage in Pennsylvania would lead to job losses and force teenagers to “seek income elsewhere” by taking up a life of crime. The authors failed to mention research demonstrating no relationship between raising the minimum wage and job losses, nor did they mention that teenagers make up less than 20 percent of minimum wage workers.

  • Conservative Media Attack Clinton Child Care Plan As Wasteful Spending, Ignoring Economic Boost For Working Families

    ››› ››› PAM VOGEL

    Conservative media have mischaracterized Hillary Clinton’s policy plan to expand funding and support for child care and early education programs, suggesting the presidential nominee is offering voters “goodies,” fearmongering about government overreach in preschool programs, and ignoring the economic boost that quality early learning programs can offer. Here are the facts about the short- and long-term economic benefits of supporting greater access to quality early education programs, particularly for single mothers and low-income families. 

  • New Research On Seattle's Minimum Wage Hike Shows “The Sky Has Not Fallen”

    University Of Washington Researchers Found Seattle Job Market “Exceptionally Strong” While City Raised The Minimum Wage

    Blog ››› ››› ALEX MORASH

    Researchers at the University of Washington found the Seattle, WA, economy continued on a path of strong growth after the city began to raise the minimum wage -- counter to dire predictions from right-wing media.

    Seattle Weekly reported that Seattle’s economy has not been met with “devastation” since the city raised the minimum wage to $11 per hour on July 25, according to researchers at the University of Washington, who found that the Seattle economy saw a “boom in job growth” over the last 18 months. Seattle began phasing in its minimum wage increase in April 2015, raising wages to $11 per hour. The Washington cities of Seattle and SeaTac are in the process of phasing in the highest municipal minimum wages in the country -- $15 per hour. Researchers found that from mid-2014 to the end of 2015, “the Seattle labor market was exceptionally strong” and the city’s “job growth rate tripled the national average.” Seattle Weekly reported that the researchers’ findings debunk conservative predictions that the increase “would ‘devastate’ small businesses” and harm low-wage workers:

    The sky has not fallen. That’s the takeaway from a new report on the effects of Seattle’s newly heightened minimum wage.

    “Wages have risen, businesses have withstood the increase, work opportunities have declined modestly, [and] average earnings have changed by no more than a few dollars a week,” said the UW minimum wage research team, led by Jacob Vigdor, in a presentation to city council this morning. This outcome stands in stark contrast against the rhetoric used when the new minimum wage was being debated in 2013 and ‘14, when opponents claimed it would “devastate” small businesses.

    In fact, no such devastation has occurred. This has been clear for a while—Seattle’s minimum wage increase began April last year—and the new report from the UW research team further confirms it. “The City’s low-wage workers did relatively well after the minimum wage increased, but largely because of the strong regional economy,” the report says. “Seattle’s low wage workers would have experienced almost equally positive trends if the minimum wage had not increased.”

    The report shows that the minimum wage increase was not the source of the economic boom but also that the Seattle economy has not seen a major impact from the minimum wage increase. The researchers “caution that these results show only the short-run impact of Seattle’s increase to a wage of $11/hour” and that it will take many years for the full effect of raising the minimum wage to be seen.

    Conservative media smears against Seattle's minimum wage increase started soon after the city approved an ordinance raising the minimum wage to $15 over the course of a three- to seven-year period. In July 2015, Fox News' Dan Springer falsely claimed that Seattle was facing "unintended consequences" from the wage increase, with some low-income workers attempting to game the system so as to remain eligible for welfare benefits. In August, the American Enterprise Institute (AEI) used cherry-picked data to claim Seattle's minimum wage increase "has started having a negative effect on restaurant jobs." Fox Business host Stuart Varney echoed AEI's claim a month later on his show, weeks after the specific job loss claim had been debunked. Other right-wing outlets, including The Daily Caller and Investor's Business Daily, have combed through municipal jobs data in Seattle to exaggerate alleged side effects of the minimum wage.

    Right-wing media are staunchly opposed to increasing the minimum wage and dedicated to promoting the myth that wage increases result in job losses, despite a wealth of evidence showing that minimum wage increases have a negligible effect on employment.

  • Wash. Post Debunks Trump’s Conspiracy Theory About The "Artificial" Employment Rate

    Blog ››› ››› MEDIA MATTERS STAFF

    The Washington Post’s Matt O’Brien countered Republican presidential nominee Donald Trump's "conspiracy theory" that the Bureau of Labor Statistics (BLS) has "massaged" the unemployment statistics, explaining that there is "zero evidence [the BLS] has changed the numbers" and that “anyone who suggests otherwise is either uninformed, or trying to uninform others.”

    Right-wing media boasts a long history of pushing the claim that the BLS artificially manipulates employment statistics in a partisan effort to portray the Obama administration as having a positive impact on the economy. Most recently, these efforts have been spearheaded by Trump, who, with the help of his family, has attempted to downplay economic progress and hype the debunked claim that 42 percent of Americans are unemployed.

    The Post explained that, while Trump hasn’t revealed the source of his unemployment statistic, “the simplest explanation is that he's just ballparking how many adults don't work” -- a figure that, right now, is 40.4 percent. But that number is problematic because it “counts college students and stay-at-home parents and retirees as being equally ‘unemployed’ as people who are actively looking for work but can't find any.” From the July 26 article (emphasis original):

    For a year now, the alleged billionaire has insisted that the "real" unemployment rate is something like 42 percent instead of the 4.9 percent it actually is. He hasn't said how he's gotten this — maybe it's from the same "extremely credible source" who told him President Obama's birth certificate was fake? — but the simplest explanation is that he's just ballparking how many adults don't work. That's 40.4 percent right now. The problem with using that number, though, is that it counts college students and stay-at-home parents and retirees as being equally "unemployed" as people who are actively looking for work but can't find any. So it doesn't tell us too much, at least not on its own, unless you think it's a problem that we have more 70-year-olds than we used to.

    Or unless conspiracy theories are one of your favorite accessories, as seems to be the case with the father, and now the son, Donald Trump Jr. On Sunday, he told CNN's Jake Tapper that the official unemployment numbers are "artificial" ones that are "massaged to make the existing economy look good" and "this administration look good." How do they supposedly do this? By, he claimed, defining "the way we actually measure unemployment" to be that "after x number of months, if someone can't find a job, congratulations, they're miraculously off [the jobless rolls]." The only problem with this theory is it's false. The BLS hasn't changed the way it measures unemployment during the Obama years, and there is zero evidence it has changed the numbers themselves. Not only that, but Donald Trump Jr. doesn't even seem to know how unemployment is defined in the first place. As the BLS explains, everyone who doesn't have a job but is trying to find one counts as "unemployed." It doesn't matter how long you've been looking as long as you are in fact still looking.

    But that's not to say the unemployment rate tells us everything we need to know about the labor market. It doesn't. Federal Reserve Chair Janet Yellen will tell you that herself. There are still a lot of people who want full-time but can only find part-time jobs. Still a lot of people who want to work but weren't able to find anything for so long that they've given up looking for now. And still a lot of people who would want to work again if wages were high enough to make worth their while. But none of this is a secret. The BLS publishes this all, too. So-called broad unemployment includes all these people who technically aren't unemployed but aren't fully employed either. That's 9.6 percent today.

  • WSJ Vs.WSJ: The Pence Economy

    Blog ››› ››› ALEX MORASH

    The Wall Street Journal's editorial board praised Donald Trump's running mate, Gov. Mike Pence (R-IN), for economic growth in Indiana during his time in office -- ignoring the paper's own reporting that the state's growth "resembles overall U.S. performance under Obama."

    The Journal’s editorial board heaped praise on Pence’s handling of the Indiana economy on July 20, pointing to the governor’s conservative policies as something “the rest of the country could emulate” -- dismissing President Obama’s economic record as part of the reason for the state’s success and ignoring the paper’s own reporting that the state’s growth “resembles” national trends. The Journal touted the point that under Pence, Indiana’s unemployment rate dropped from 8.4 percent to 5 percent, also noting that he cut income taxes from 3.4 percent to 3.3 percent and has amassed a budget surplus (emphasis added):

    President Obama visited Elkhart, Indiana, on June 1 to tout the state’s economic recovery, taking credit for its success and claiming that it represents the 2016 election’s basic policy choice. He’s right, but the economic lessons speak better of GOP Governor and vice presidential nominee Mike Pence and his predecessor Mitch Daniels than they do Mr. Obama’s policies.

    [...]

    All states have seen declines in the jobless rate, and Indiana’s has fallen to 5% in May from 8.4% in 2013 when Mr. Pence became Governor. The Indiana difference is that the rate has fallen even as the labor force has increased by nearly 187,000. Many states have seen their jobless rates fall in part because so many people have left the labor force, driving down the national labor participation rate to lows not seen since the 1970s. The Illinois workforce has grown by only about 71,000 in the same period, though it is roughly twice as large. Indiana is adding jobs fast enough that people are rejoining the workforce.

    [...]

    Mr. Pence has continued the progress, cutting taxes every year of his tenure even as the state has continued to pile up budget surpluses. He cut the individual tax rate to 3.3% in 2015 from 3.4% and it will fall to 3.23% in 2017, the lowest in the Midwest, according to the Tax Foundation. One reason the tax rate can stay so low and flat is because it applies to a relatively broad base of income with fewer loopholes than more steeply progressive tax codes.

    The Journal’s editorial board claimed the job growth seen in Indiana is “different” because “the [unemployment] rate has fallen even as the labor force has increased,” an idea dismissed by Politico on July 19, which wrote “the drop in Indiana’s unemployment almost perfectly mirrors the national trend. And the labor force has grown in all but nine states.” A report by the Associated Press (AP) also found that the state’s unemployment rate “largely paralleled the national mark.” The parallel unemployment trends can even be seen in the Journal’s own graph from a July 16 article that undercuts Pence's ownership claim of Indiana's recovery:

    The Journal’s rhetoric resembles praise Trump had for Pence’s handling of the Indiana economy -- which so closely mirrors the U.S. economy that MSNBC’s Steve Benen argued if Pence did a “great job producing economic results, by Trump’s own reasoning, it’s hard not to consider Obama an amazing success.”

    The Journal’s editorial board touted Pence’s income tax cut, but upon closer inspection by the AP, that tax cut works out to be a mere $85 for someone making $50,000 a year. The AP also called into question the budget surpluses the Journal praised, reporting that Pence’s surpluses drew criticism after an infrastructure crisis in which opponents blamed “a handful of roadway deaths on Pence’s desire to build a budget surplus at the expense of properly funding infrastructure.” (The willingness of Republican governors to raid infrastructure funding to fill budget gaps created by trickle-down tax cuts has been well-documented.)

    Pence has also been accused of politicizing Indiana’s health budget. On June 6, 2015, the Chicago Tribune reported on one of the Indiana towns facing an opioid crisis and how Pence’s “war on Planned Parenthood” inadvertently created an “exploding HIV outbreak” in his state. When Indiana Republicans cut funding for Planned Parenthood, they cost some parts of the state their only HIV testing centers, leading to an outbreak of the virus among intravenous drug users and their sexual partners and forcing the state to eventually provide emergency funding for needle exchange programs.

    Other Republican-led states have seen their economies falter after implementation of conservative policies; Kansas and Louisiana have been devastated by Gov. Sam Brownback's and former Gov. Bobby Jindal’s trickle-down economics -- Brownback’s Koch-backed tax cut program has been particularly destructive. Like Pence, Ohio Gov. John Kasich claimed his conservative policies led to an economic “miracle” for his state, but it is easy to demonstrate how Ohio’s economic recovery pre-dated his term of office and is also largely following the national trend.

  • Politico Finds Problem With Trump’s “Make America Work” Convention Theme: “It's Already Working”

    Blog ››› ››› ALEX MORASH

    Politico Magazine reported that while the Republican National Convention is pushing the narrative that Republican presidential nominee Donald Trump will “make America work again,” the U.S. economy has actually done well since 2009, with millions of jobs created and a reduction by half of the unemployment rate.

    Make America Work Again” was the theme on July 19, the second night of the Republican National Convention, but Politico pointed out that “one of Trump’s many challenges will be convincing non-Republicans that America isn’t working even though nearly 15 million more Americans are.” Politico interviewed Republican convention delegates about their thoughts on the economy and found “they all seem to agree the Obama economy is a ghastly mess. Except for the economy wherever they happen to live.”

    The publication noted that, rather than giving credit to President Obama, convention delegates and Trump credited Republican mayors and governors for local “economic progress.” That includes Trump’s running mate, Gov. Mike Pence of Indiana, whom the nominee praised for job gains in that state even though “Indiana’s unemployment almost perfectly mirrors the national trend.” From Politico Magazine (emphasis added):

    Just as most Americans say they hate Congress but routinely vote for their local congressmen, most Republicans seem to detect a national economic malaise while — with some exceptions in places like coal country and the oil patch — touting the economic progress in their local communities. They square that circle in a variety of ways — crediting their Republican mayors and governors, accusing Obama of manipulating data, or citing legitimate weaknesses in the recovery from the Great Recession. But with unemployment down from 10 percent to less than 5 percent since late 2009, one of Trump’s many challenges will be convincing non-Republicans that America isn’t working even though nearly 15 million more Americans are.

    Trump illustrated this problem last week when he introduced his running mate, Indiana Governor Mike Pence. He said the “primary reason” for his choice was that Indiana’s unemployment had dropped by 3.4 percentage points in four years under Pence, and that its labor force had grown, which he said was “very unusual” for a U.S. state.

    “It’s always bad, down, down, down,” Trump said. “Down 40 percent, 50 percent, 60 percent in some cases.” In fact, the drop in Indiana’s unemployment almost perfectly mirrors the national trend. And the labor force has grown in all but nine states with the worst drop only 3 percentage points in oil-dependent North Dakota. In February 2009, Obama highlighted the free-falling economy he inherited by visiting Elkhart, Indiana, where unemployment was nearly 20 percent; he recently returned to Elkhart to highlight America’s recovery, and unemployment was 4 percent.

    Talking points bashing President Obama and the American economy have been central to the Republican convention. On the first night, Sen. Jeff Sessions (R-AL) claimed America is “an economic disaster” because middle-class incomes are down since 1999. Yet Sessions was rebuffed by CNN’s Christine Romans, who noted that middle-class income “began declining actually under George W. Bush” and “more recently, it has started to climb again.” Sessions’ misleading talking point seemed to be taken directly from Fox News, which regularly blames Obama for income stagnation witnessed during the Bush administration and promoted the exact same fallacy just last month.

    The Republican National Convention has come under intense scrutiny from the media for its antics and lack of coherence or coordination. The second night of the convention -- with the theme “Make America Work Again” -- drew ridicule from journalists for not actually talking about the economy, and media denounced the night’s “mock trial” against Hillary Clinton, which featured delegates shouting “lock her up,” as a “mob” and a “festival of hating Hillary.” The first night of the convention saw even more intense pushback, with media calling the evening “disastrous” for its lack of message and saying the plagiarized speech by Trump’s wife, Melania, turned the “night into a catastrophe.”