From the October 27 edition of Premiere Radio Networks' The Rush Limbaugh Show:
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From the October 27 edition of Fox News' Fox & Friends:
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Mainstream media figures, following in the footsteps of conservative media, are trying to manufacture a scandal out of former Secretary of State Hillary Clinton's recent argument against trickle-down economics by stripping her comments of context to falsely cast them as a controversial gaffe or a flip-flop on previous statements about trade.
Conservative media outlets rushed to vilify Clinton's stance after she pushed for a minimum wage increase and warned against the myth that businesses create jobs through trickle-down economics at an October 24 campaign event for Massachusetts gubernatorial candidate Martha Coakley (D). Breitbart.com complained, "Clinton told the crowd ... not to listen to anybody who says that 'businesses create jobs,'" conservative radio host Howie Carr said the comments showed Clinton's "true moonbat colors," while FoxNews.com promoted the Washington Free Beacon's accusation that she said "businesses and corporations are not the job creators of America."
Mainstream media soon jumped on the bandwagon.
CNN host John King presented Clinton's comments as a fumble "a little reminiscent there of Mitt Romney saying corporations are people, too," and USA Today called the comments "An odd moment from Hillary Clinton on the campaign trail Friday - and one she may regret." In an article egregiously headlined, "Hillary Clinton No Longer Believes That Companies Create Jobs," Bloomberg's Jonathan Allen stripped away any context from Clinton's words in order to accuse her of having "flip-flopped on whether companies create jobs," because she has previously discussed the need to keep American companies competitive abroad.
Taken in context, Clinton's comments are almost entirely unremarkable -- and certainly don't conflict with the philosophy that trade can contribute to job growth, as Allen suggests. The full transcript of her remarks shows she was making the established observation that minimum wage increases can boost a sluggish economy by generating demand, and that tax breaks for the rich don't necessarily move companies to create jobs:
CLINTON: Don't let anybody tell you that raising the minimum wage will kill jobs. They always say that. I've been through this. My husband gave working families a raise in the 1990s. I voted to raise the minimum wage and guess what? Millions of jobs were created or paid better and more families were more secure. That's what we want to see here, and that's what we want to see across the country.
And don't let anybody tell you, that, you know, it's corporations and businesses that create jobs. You know, that old theory, trickle-down economics. That has been tried. That has failed. That has failed rather spectacularly.
One of the things my husband says, when people say, what did you bring to Washington? He says, well I brought arithmetic. And part of it was he demonstrated why trickle down should be consigned to the trash bin of history. More tax cuts for the top and for companies that ship jobs over seas while taxpayers and voters are stuck paying the freight just doesn't add up. Now that kind of thinking might win you an award for outsourcing excellence, but Massachusetts can do better than that. Martha understands it. She knows you have to create jobs from everyone working together and taking the advantages of this great state and putting them to work.
Economic experts agree that job growth is tied to the economic security of the middle class.
U.S. economic growth has historically relied on consumer spending, and middle class consumers are "the true job creators," Nobel Prize winning economist Joseph Stiglitz points out. Right now, the U.S. economy is "demand-starved," as Economic Policy Institute's (EPI) Joshua Smith puts it. Steiglitz says that, of all the problems facing the U.S. economy, "The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth."
In a testimony before the Senate Committee on Health, Education, Labor, and Pensions, economist Heather Boushey noted that "It is demand for goods and services, backed up by an ability to pay for them, which drives economic growth" and "The hollowing out of our middle class limits our nation's capacity to grow unless firms can find new customers."
UC Berkeley economist Robert Reich agrees that the problem in the U.S. economy is demand. "Businesses are reluctant to spend more and create more jobs because there aren't enough consumers out there able and willing to buy what businesses have to sell," he writes, and places the blame on low paychecks and growing inequality: "The reason consumers aren't buying is because consumers' paychecks are dropping... Consumers can't and won't buy more." He says the key to job growth is "reigniting demand" by "putting more money in consumers' pockets." From The Huffington Post:
Can we get real for a moment? Businesses don't need more financial incentives. They're already sitting on a vast cash horde estimated to be upwards of $1.6 trillion. Besides, large and middle-sized companies are having no difficulty getting loans at bargain-basement rates, courtesy of the Fed.
In consequence, businesses are already spending as much as they can justify economically. Almost two-thirds of the measly growth in the economy so far this year has come from businesses rebuilding their inventories. But without more consumer spending, there's they won't spend more. A robust economy can't be built on inventory replacements.
The problem isn't on the supply side. It's on the demand side. Businesses are reluctant to spend more and create more jobs because there aren't enough consumers out there able and willing to buy what businesses have to sell.
The reason consumers aren't buying is because consumers' paychecks are dropping, adjusted for inflation.
Clinton's emphasis on the minimum wage is supported by economic experts as well. Reich says that raising the minimum wage is an effective way to generate the consumer demand that would spur job growth. It "would put money in the pockets of millions of low-wage workers who will spend it -- thereby giving working families and the overall economy a boost, and creating jobs." He also rejected critics' claims that giving low income-earners a raise hurts job growth: "When I was Labor Secretary in 1996 and we raised the minimum wage, business predicted millions of job losses; in fact, we had more job gains over the next four years than in any comparable period in American history."
EPI called the minimum wage a "critically important issue" that "would provide a modest stimulus to the entire economy, as increased wages would lead to increased consumer spending, which would contribute to GDP growth and modest employment gains" (emphasis added):
The immediate benefits of a minimum-wage increase are in the boosted earnings of the lowest-paid workers, but its positive effects would far exceed this extra income. Recent research reveals that, despite skeptics' claims, raising the minimum wage does not cause job loss. In fact, throughout the nation, a minimum-wage increase under current labor market conditions would create jobs. Like unemployment insurance benefits or tax breaks for low- and middle-income workers, raising the minimum wage puts more money in the pockets of working families when they need it most, thereby augmenting their spending power. Economists generally recognize that low-wage workers are more likely than any other income group to spend any extra earnings immediately on previously unaffordable basic needs or services.
Increasing the federal minimum wage to $10.10 by July 1, 2015, would give an additional $51.5 billion over the phase-in period to directly and indirectly affected workers, who would, in turn, spend those extra earnings. Indirectly affected workers--those earning close to, but still above, the proposed new minimum wage--would likely receive a boost in earnings due to the "spillover" effect (Shierholz 2009), giving them more to spend on necessities.
This projected rise in consumer spending is critical to any recovery, especially when weak consumer demand is one of the most significant factors holding back new hiring (Izzo 2011). Though the stimulus from a minimum-wage increase is smaller than the boost created by, for example, unemployment insurance benefits, it has the crucial advantage of not imposing costs on the public sector.
The economic benefits of a minimum wage increase are widely accepted. Over 600 economists signed a recent letter supporting an increase, arguing, "Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front."
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.