Fox News misleadingly attributed a drop in McDonald's quarterly profits to widespread calls for a minimum wage increase, even though the company itself pointed to image problems as the major factor in the loss, not the minimum wage.
Fox Business host Maria Bartiromo appeared on the October 22 edition of Fox & Friends to discuss a 30 percent drop in McDonald's quarterly profits. Bartiromo and the hosts agreed that calls for a minimum wage increase caused profits to drop and forced McDonald's to turn to automation:
STEVE DOOCY: Meanwhile, McDonald's, the Golden Arches, reporting a 30 percent drop in corporate profits.
BRIAN KILMEADE: Why? Well, it turns out workers' wages might be to blame.
BARTIROMO: Well, the issue really is, this is the implication of raising the minimum wage for certain companies. I mean, something's got to give. The money comes from somewhere. At some point, a company will say, "OK, we have a higher expense rate because we are raising the minimum wage we've got to do something somewhere else." In this case, they are going to automation. They are changing certain jobs to computers.
AINSLEY EARHARDT: So it's really biting them in the tail. They were complaining, saying "we want more money," and as a result, McDonald's saying,"Hey, we're going to lose some of you guys, and we're going to replace you with machines.
Fox & Friends offered no evidence to connect calls for a minimum wage increase and the profit loss. In fact, McDonald's CEO Don Thompson "owned up to some corporate image problems" as an explanation for the drop in profits, according to Reuters. The AP also detailed the fast-food company's image problems:
One of its biggest challenges in the U.S. is long-held perceptions around the freshness and quality of its ingredients. The chain has been fighting to boost sales as people gravitate toward foods they feel are more wholesome. As a result, people have been gravitating to places like Chipotle, which markets its ingredients as being of superior quality.
The Fox hosts also left out another important detail -- earlier this year, Thompson announced McDonald's would "support legislation that moves forward" on a minimum wage increase:
McDonald's Chief Executive Don Thompson told students at Northwestern University's Kellogg School of Management that it could handle a theoretical bump in the minimum wage to, say, $10.10 an hour, the figure supported by President Barack Obama and others.
"McDonald's will be fine," Thompson said in the May 12 discussion. "We'll manage through whatever the additional cost implications are."
The Wall Street Journal editorial board is criticizing a new Supreme Court case by downplaying serious allegations in the case that Amazon.com engaged in illegal employment activities and complaining about class action lawsuits.
On October 8, the Supreme Court heard oral arguments in Integrity Staffing Solutions v. Busk, a case involving a class action lawsuit in which temporary contractors who worked in Amazon warehouses are accusing the retailer of wage theft. The lead plaintiff in the case, Jesse Busk, represents warehouse staffers who argue that they are owed back pay for the time they spent in lines for security checks after they had clocked out. Busk says he often waited upward of 25 minutes at the end of his shift to go through security, where guards checked each employee for stolen merchandise. Because the security screenings are mandated by company policy, Busk and the rest of the class argue they should be compensated for the time they spent waiting to be screened.
Although the court recently held that the time employees spend putting on and taking off protective gear is not compensable, the Busk case is far from a slam-dunk. But as far as the Journal editorial board is concerned, "this should be an easy call for the Justices." In an October 7 editorial, the Journal minimized how much time workers were required to wait in security lines, complained that suits to recover back wages for this unpaid time "benefit lawyers far more than workers," and misrepresented the holding in other wage theft cases to conclude that "[t]ime in security lines doesn't qualify" for compensation:
Standing in line might feel like work, but it isn't. Under the 1947 Portal to Portal Act, Congress specifically wrote rules to prevent employees from abusing an amorphous definition of work in the Fair Labor Standards Act (FLSA) to claim they were entitled to be paid for a wide range of activities on work premises. Congress said employers weren't expected to pay employees for "walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform."
That understanding has been upheld by both the Second and Eleventh Circuit Courts of Appeal. Workers must be paid only for activities that are "integral and indispensable" to their core job responsibilities. Time in security lines doesn't qualify.
This kind of FLSA litigation has been booming, especially as securities class-actions have become harder for the trial bar to win. From March 2011 to March 2012, 7,064 FLSA actions were filed in federal court, up from 2,035 a decade earlier.
If the Ninth Circuit's reasoning is upheld, it would encourage a wave of copycat suits and mean countless paydays for the trial bar. A similar lawsuit is pending against Apple, which checks employee bags for wayward iPhones. While the security delays are only minutes, a class-action suit would cost millions in settlements that would benefit lawyers far more than workers.
The 9th Circuit applied a two-part test in in its opinion to determine whether an on-the-job activity is "integral and indispensable" -- it must be both "necessary to the principal work performed" and "done for the benefit of the employer." In Amazon's case, the employees are arguing that the security checks meet this test, because the checks arise from their work in the warehouse, and uncovering theft is solely for the company's benefit.
From the October 7 edition of Fox News' The Five:
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Fox News misled viewers about trends in household income, job creation, and the use of food stamps while claiming that President Obama's policies are to blame for a supposedly stagnant economy.
During an interview that aired on the September 28 edition of CBS' 60 Minutes, Obama argued that the United States "is definitely better off" economically than it was when he took office in 2009. The president said he would compare the success of his response to the "terrible, almost unprecedented financial crisis" that he inherited to the response by "any leader around the world."
On the September 30 edition of Fox & Friends, co-host Steve Doocy and Fox Business anchor Stuart Varney attempted to refute Obama's claim of economic achievement over the past six years, citing three major indicators -- household income, part-time job creation, and food stamp participation -- to make their case.
In each instance, Fox cherry-picked data to obscure positive trends in the overall economy:
From the September 26 edition of Fox News' The O'Reilly Factor:
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From the September 19 edition of Fox News' The O'Reilly Factor:
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Conservative media are claiming that unemployed Americans are "lazy" because they supposedly spend too much time "shopping" and not enough time working or looking for work. But the data they cite includes the activities of stay-at-home parents, students, people with disabilities, and retirees who are "not employed."
On September 8, fringe conservative website CNS News published an article claiming "an unemployed American is more likely to be shopping ... than to be looking for a new job. " The article ostensibly cited data from the American Time Use Survey (ATUS), an annual survey conducted by the Bureau of Labor Statistics (BLS). CNS claimed that "only 18.9 percent of Americans who were unemployed" engaged in job searches or job interviews on "an average day." Meanwhile, according to CNS, 22.5 percent of the "unemployed" engaged in shopping "for items other than groceries" on "an average day."
Unfortunately, CNS did not link to its internal data or provide methodology for its reporting, leaving readers to take the website's claims at face value.
Digging into the technical notes of the ATUS reveals that the BLS does not categorize individuals as "unemployed," but rather as "not employed." This distinction is important, as it includes individuals who fit the classification of being unemployed -- not working but actively looking for work -- as well as individuals who are "not in the labor force" for other reasons, including retirement, educational pursuit, and disability. So-called "discouraged workers," the small percentage of the population who involuntarily leave the labor force due to a lack of opportunity, would also count as "not employed" by ATUS classification.
CNS' insinuation that the so-called "unemployed" spend too much time engaged in non-work activities like "shopping" is based on a fatally skewed statistical error. But that fact has not stopped right-wing media outlets from using CNS' assumptions to fuel their campaign against the unemployed.
From the September 5 edition of Fox News' The O'Reilly Factor:
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The Congressional Progressive Caucus (CPC) responded to guest radio host Erick Erickson's recent remarks that people who work in fast food have "failed at life," calling the statement "degrading" and "out of touch" with hard working Americans.
On the September 4 edition of The Rush Limbaugh Show, Fox News contributor Erick Erickson called minimum wage workers failures stating:
If you're a 30 -something year- old person and you're making minimum wage, you've probably failed at life. It's not that life dealt you a bad hand. Life does not deal you cards. It's that you failed at life.
The Congressional Progressive Caucus co-chairs Reps. Raúl M. Grijalva (D-AZ) and Keith Ellison (D-MN) released a statement on Erickson's "degrading remarks" about fast food workers.
Fast food workers often work 2 to 3 jobs just to put food on the table and to take care of their families. Erick Erickson is clearly out of touch if he thinks this is something to attack. He ought to interview these workers on his radio show - maybe then he will learn what real work is.
Over the last year, the Progressive Caucus has been privileged to stand side by side with Americans from all across the country as they organize and rally for fair wages. We have met thousands of hard working men and women, many of whom work far more than 40 hours per week. Contrary to Erickson's remarks, not one of them has failed at life.
From the September 4 edition of Premiere Radio Networks' The Rush Limbaugh Show:
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From the August 28 edition of Fox News' Special Report with Bret Baier:
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Fox News turned to misleading statistics and sensational rhetoric in a renewed attack on government anti-poverty relief programs, federal workers, and public pensions.
On the August 21 edition of Fox News' Happening Now, co-host Jon Scott invited Fox Business contributor Charles Gasparino to discuss concerns regarding the scope and sustainability of government benefit programs. The two falsely portrayed government employment as a "growth industry" and made a confusing comparison between the total number of Americans receiving so-called "welfare" and the population of Russia. Gasparino lamented that more "stigma" is not attached to receiving federal aid or "living in a housing project," before falsely concluding that public pensions face a "huge looming crisis" and are, in essence, "Ponzi schemes":
GASPARINO: I don't think Americans are against handing people a check if they really need it, if they're starving, if they need welfare, if they need a helping hand. But we have a cultural situation in this country where it is more than that, where it is almost acceptable. The stigma is gone about accepting that check.
GASPARINO: We've become the old Soviet Union! If you threw in the state numbers, it would even be bigger. The pension issue that I brought up is one of the huge looming crisis out there. It's essentially a Ponzi scheme.
Scott's initial claim that "nearly 110 million Americans live in households on welfare," is misleading. According to the United States Census Bureau, in the fourth quarter of 2012 roughly 109.6 million Americans resided in a household receiving "one or more means-tested programs." These include housing assistance, disability and survivor benefits, numerous nutritional assistance programs, Medicaid, and forms of "cash assistance." Only 5.4 million individuals lived in homes receiving from the benefit program Temporary Assistance for Needy Families (TANF), commonly referred to as "welfare."
The portrayal of government employment as a "growth industry" is also false. According to the Federal Reserve Bank of St. Louis, total government employment across local, state, and federal agencies has declined significantly during the Obama administration and over the past seven years. Total government employment was roughly 22.6 million when President Obama took office in 2009, declining to 21.9 million today:
Gasparino's final claim that public employee pensions are "a Ponzi scheme," is incorrect. A February 2011 report by economist Dean Baker of the Center for Economic and Policy Research (CEPR) demonstrated that most of the long-term funding shortfall in public pensions is a result of the 2007-2009 economic crisis and the accompanying stock market downturn. Baker concluded that the debate on pensions had been "seriously misrepresented" and that most public pensions appeared "easily manageable" over the long term.
Fox News and Gasparino have a long history of misappropriating terms like "welfare" and relying on sensational comparisons of pensions to "Ponzi schemes," in addition to unsubstantiated correlations between the number of recipients of a government program with completely unrelated population statistics.
In the past two months, Washington Post political reporter Chris Cillizza has used his platform at The Fix to obsess over the question of whether Hillary Clinton has sufficiently explained her family's wealth, dismissing Clinton's comments on income inequality while offering conflicting advice on how she should answer the question in a way that satisfies Chris Cillizza and The Washington Post.
Cillizza's latest post came in response to an interview Hillary Clinton gave to Fusion TV host Jorge Ramos that aired July 29. "Hillary Clinton still hasn't found a good answer to questions about her wealth," according to the July 29 headline over at The Fix. After crediting GOP opposition research firm American Rising with focusing his attention on Clinton's wealth, Cillizza concluded: "Until she finds three sentences (or so) to button up any/all questions about her wealth, those questions will keep coming. And that's not the way Clinton wants to run-up to her now all-but-certain presidential bid."
This is the third time in two months that Cillizza has posted a column fixated on Clinton's wealth and his belief that she is struggling to explain it -- and the third time since June 22 that The Fix has turned to America Rising to help define Hillary Clinton. Meanwhile, a June NBC News/Wall Street Journal/Annenberg poll found that 55 percent of Americans say that Clinton relates to and understands average Americans.
"The Clintons are not 'average' people," Cillizza warned just a week before that poll came out. He concluded by advising Clinton to stop talking about her wealth and move on: "Instead of spending her time litigating just how wealthy she is, Clinton should acknowledge her wealth and then spend the vast majority of her rhetorical time making the case that through the policies she has advocated and pursued, she has never lost sight of the middle class."
The reality is that Clinton has already done exactly what Cillizza advises; he just largely chooses to dismiss it. When Clinton has been asked about her wealth, she has consistently paired her personal finances with discussing her lifelong advocacy and work on behalf of the poor and middle class.
Heritage Foundation chief economist Stephen Moore was caught using incorrect statistics to mislead readers about the relationship between tax cuts and job creation in the United States.
On July 7, Moore published an op-ed in The Kansas City Star attacking economic policies favored by Nobel Prize-winning economist Paul Krugman. The op-ed claimed that "places such as New York, Massachusetts, Illinois and California ... are getting clobbered by tax-cutting states." Moore went on to attack liberals for "cherry-picking a few events" in their arguments against major tax cuts, when in fact it was Moore who cited bad data to support his claims.
On July 24, The Kansas City Star published a correction to Moore's op-ed, specifically stating that the author had "misstated job growth rates for four states and the time period covered." The editorial board of the Star inserted this annotation to Moore's inaccurate claims:
Please see editor's note at the top of this column. No-income-tax Texas gained 1 million jobs over the last five years, California, with its 13 percent tax rate, managed to lose jobs. Oops. Florida gained hundreds of thousands of jobs while New York lost jobs. NOTE: These figures are incorrect. The time period covered was December 2007 to December 2012. Over that time, Texas gained 497,400 jobs, California lost 491,200, Florida lost 461,500 and New York gained 75,900. Oops. Illinois raised taxes more than any other state over the last five years and its credit rating is the second lowest of all the states, below that of Kansas! (emphasis original)
On July 25, Star columnist Yael Abouhalkah explained the correction in more detail. Abouhalkah wrote that Moore had "used outdated and inaccurate job growth information at a key point in his article" and that Moore should have used data from 2009 to 2014, rather than from 2007 to 2012. Abouhalkah also argued that "the problems with Moore's opinion article damaged his credibility on the jobs issue."
Moore's credibility on "the jobs issue" is not the only troubling aspect of his economic punditry. Moore was recently brought on as the chief economist at the conservative Heritage Foundation after serving for many years on the right-wing editorial board of The Wall Street Journal and as a go-to economic commentator on Fox News. Moore has a history of disparaging reasonable economic policies in favor of fiscally irresponsible tax cuts for the wealthy and painful spending cuts to vital programs.
Moore has referred to unemployment insurance as a "paid vacation" for jobless Americans and bizarrely claimed that laws guaranteeing paid sick leave for full-time workers were "very dangerous for cities." Moore spent years basely claiming that the Affordable Care Act would reduce job creation, seamlessly transitioning from one debunked talking point to the next along the way. He is also an outspoken opponent of increasing the minimum wage, claiming that even a moderate rise in wages would result in a "big increase" in unemployment. In a recent foray out of the safety of right-wing media, Moore's anti-living wage spin was easily cut down by CNN anchor Carol Costello.
The original intent of Moore's Star op-ed was to garner support for tax cuts enacted over the past two years by Gov. Sam Brownback (R-KS), which The New York Times and other outlets have labeled "ruinous." The tax cuts have been such a dramatic failure that more than 100 members of the Kansas Republican Party have sworn to help replace Brownback with a Democrat willing to reinstate taxes and spending at their previous levels.
Fox News misleadingly attacked the federal food stamp program for being wasteful and unaccountable despite reports that the program achieved the lowest payment error rate in its history in the most recently available data.
Fox New complained about the findings of a report from the U.S. Department of Agriculture (USDA) on quality control in the Supplemental Nutrition Assistance Program (SNAP), previously known as food stamps. The USDA report clearly states that the 2012 fiscal year was "another year of excellent performance in payment accuracy" before noting that the most recent payment error rate of 3.42 percent was once again "the lowest National payment error rate in the history of SNAP."
On the July 24 edition of Fox News' Fox & Friends, co-host Brian Kilmeade cast the findings in a negative light, stressing that "the government is overpaying on food stamps by about $2 billion." Co-host Steve Doocy then questioned whether the Obama administration could "be trusted with more money," given the overpayments. Fox Business anchor Stuart Varney went on to chastise the Department of Agriculture for labeling the food-stamp payment error rate of 3.42 percent "excellent," wondering aloud "since when has that been good?"
Fox News' mischaracterization of the SNAP report continued throughout the day. On Happening Now, co-host Jenna Lee called the USDA report "startling" and said that "the administration is having a tough time managing its funds." On The Real Story, host Gretchen Carlson claimed that federal spending on nutrition assistance was "reaching a breaking point" before highlighting the growth of participation in the food stamp program since 2007.
Far from indicating a managerial flaw in the Obama administration, the 2012 payment error rate in SNAP is evidence of success in rooting out improper payments. According to the report being derided on Fox News, the national payment error rate in SNAP during President Obama's first year in office was 4.36 percent. That error rate then fell to 3.81, 3.80, and 3.42 percent in fiscal years 2010-2012, respectively.