A new study reveals how successful government safety net programs are at keeping people out of poverty, delivering an additional blow to the Fox News myth that government assistance cannot improve the lives of low-income individuals.
According to The Washington Post, researchers Christopher Wimer and Liana Fox of the Columbia Population Research Center found that from 1967 to 2012, the safety net reduced the poverty rate from 26 to 16 percent.
Official poverty measures did not take government programs used by low-income Americans into account before 2010, often giving the appearance that poverty rates have remained unchanged over the past 50 years. Wimer and Fox adjusted poverty rates going back to 1967 to take into account additional costs and the effect of safety net programs, revealing the 10-point drop in poverty. Previous research by the Center on Budget and Policy Priorities suggested that government programs reduce the official poverty rate, but Wimer and Fox found that the safety net has an even greater effect in reducing poverty.
The findings of the study reveal how crucial government anti-poverty programs are, undercutting the right-wing media myth rampant on Fox News that government programs cannot help low-income people.
Fox Business contributor Charles Payne made this point as recently as September, arguing that government assistance has been a waste because poverty numbers have not decreased since the "Great Society" in the 1960s, which implemented many anti-poverty measures.
In a discussion on The O'Reilly Factor, Fox Business' John Stossel recently railed against anti-poverty programs, claiming that government makes poverty "worse with these government programs" and that "we should get rid of most of government and allow poor people to become rich."
Indeed, the belief that government assistance cannot help low-income individuals is somewhat of a theme in the right-wing media, with figures continually questioning the efficacy of safety net programs.
The study also found that absent government safety net programs, 29 percent of Americans would be in poverty today -- an increase since 1967. These findings show that while the economy has grown tremendously in the past few decades, the gains have not reached those at the bottom.
The study reinforces previous research about the nature of growing income inequality in America. However, it is unlikely that voices in right-wing media will take notice of the findings as a problem, especially considering previous calls to reduce inequality have been met with staunch opposition and accusations of implementing a communist agenda.
While Fox News may continue to dismiss government assistance as wasteful, it doesn't change the fact that it plays a critical role in reducing poverty and inequality.
Fox News downplayed the gravity of income inequality -- proven insurmountable for a majority of the poorest Americans and detrimental to economic growth -- in order to tout a report which found that 20 percent of adults in the U.S. will be among the top 2 percent of earners at some point in their lives.
On December 9, NBC News published an Associated Press report which found that 20 percent of U.S. adults enter the wealthiest 2 percent of earners at some point in their lifetimes [emphasis added]:
Fully 20 percent of U.S. adults become rich for parts of their lives, wielding outsize influence on America's economy and politics. This little-known group may pose the biggest barrier to reducing the nation's income inequality.
Made up largely of older professionals, working married couples and more educated singles, the new rich are those with household income of $250,000 or more at some point during their working lives. That puts them, if sometimes temporarily, in the top 2 percent of earners.
On the December 9 edition of Your World, host Neil Cavuto touted the AP study as "good news" and ignored its negative implications, such as the finding that those in the top 2 percent are "less likely to support public programs, such as food stamps or early public education, to help the disadvantaged":
CAVUTO: You ever want to be in the top 2 percent? Well, you've got a 1 in 5 chance of making it -- it's true, 21 percent of Americans have been there, making the 250,000 bucks or so it takes to be among those rarefied few. That's good news, right? Well, not if you're the mainstream media. It's seen as a problem, not a triumph. To quote the Associated Press, this little-known group may pose the biggest barrier to reducing the nation's income inequality. Biggest barrier, so now, this is a problem?
Fox News contributor Charles Payne dismissed the importance of closing the income gap, saying, "People make it all the time in this country." But findings from a recent Pew report refute Payne's claim, particularly where Americans at bottom of the income ladder are concerned. According to the report, "43 percent of Americans raised at the bottom of the income ladder remain stuck there as adults, and 70 percent never even make it to the middle."
Fox News contributor Monica Crowley later described the administration's efforts to reduce income inequality as "a war on wealth" and "a war on success." However, many economists agree that policies aimed at reducing inequality also spur economic growth. Economist Robert Reich has argued for decades that economic inequality "is bad for everyone," including the very wealthy, because it hinders economic growth. Nobel Prize-winning economist Joseph Stiglitz has also contended that income inequality leads to "less growth and less efficiency."
During their discussion, Cavuto and his guests ignored the harsh realities faced by Americans excluded from the top income bracket. According to another AP report, "4 in 5 American adults struggle with joblessness, near poverty or reliance on welfare for at least part of their lives." And contrary to Cavuto's optimistic outlook, the U.S. Census Bureau found that the poverty rate increased by 2.7 percent from 2007 to 2012.
Fox News dismissed the economic benefits of long-term unemployment insurance, erroneously characterizing the program as a "crutch" holding back economic growth.
On December 6, the Bureau of Labor Statistics released its unemployment report for the month of November. The national unemployment rate edged down from 7.3 to 7 percent, while the economy added a total of 203,000 jobs month-to-month, beating economists' expectations.
On the December 6 edition of Fox News' Your World, host Neil Cavuto and Fox Business contributor Charles Payne used the better than expected report to cast doubt on Rep. Nancy Pelosi's (D-CA) recent call to extend long-term unemployment benefits set to expire at the end of the year. Cavuto claimed that Pelosi was misguided for "talking up the need for extending jobless benefits and all of that in the face of more jobs" before Payne launched an all-out attack on social safety net programs:
PAYNE: Yeah, you know, it's really interesting as people, as we get more and more people coming off these jobless benefits, what are they doing? They're going back into the job market. What's happening? More jobs are being created. It's the exact opposite of what they're preaching in Washington which is the defeatist attitude. They don't believe in the American economic system. You know, it doesn't need all these crutches, it doesn't need all these aids. Let people come back into the job market, that's a sign of confidence; confidence is what this is all about. That's what will spark a real recovery. Unlimited unemployment benefits, 50 million people on food stamps, that's nutty stuff, you can do the math, you can talk about multiplier effects all you want, that's not what America was built on. This stock market wants people to get off these unemployment benefits after three years and look for a job, because they will eventually find a job and that's better for all of us.
Cavuto and Payne's claim that the strong jobs report indicates that unemployment insurance doesn't have to be extended -- in addition to claiming that allowing the program to expire would help the economy -- is at odds with reality.
Despite recent months of relatively strong job growth, the long-term unemployed -- the same people who are facing benefit cuts when the Emergency Unemployment Compensation (EUC) program expires later this month -- have seen little gain. According to economist Chad Stone of the Center on Budget and Policy Priorities, long-term unemployment currently "equals the highest rate achieved in any previous recession since the end of World War II." Stone also noted that when previous emergency unemployment insurance programs expired, the long-term unemployment rate was at far lower levels.
As the Detroit bankruptcy moves forward, Fox News personalities have been quick to blame worker unions and political corruption for the city's unfunded pension liabilities. This discourse ignores the forces actually undermining Detroit's financial solvency: the dramatic reduction of the city's population and taxbase since its post-war peak.
From the December 3 edition of Fox Business' Varney & Company:
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From a November 15 speech at the Freedom Center's 2013 Restoration Weekend:
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Fox Business' Charles Payne questioned the need for fast food workers to rely on federal assistance, absurdly citing aggregate earnings of workers and ignoring the fact that many in the industry earn below subsistent wages.
On the October 25 edition of Fox Business' Varney & Co., guest host Charles Payne and Fox contributor Elizabeth MacDonald discussed a recently released audio recording from the advocacy group LowPayIsNotOK.org. In the recording, a long-time McDonald's employee is directed by a "McResources" representative to seek out federal benefit programs to augment her inadequate take-home income. MacDonald cited a statement from McDonald's disavowing the call before Payne launched into a slander-filled tirade against a stereotyped generalization of low-wage, fast food employees:
PAYNE: There is a lot of unfortunate parts of the story. If you want to create a society where these jobs -- $8 jobs go for $15. Then what you're saying to people is like, okay, "don't improve your life. Don't finish high school. Don't go to college. Don't, you know what, have three or four kids out of wedlock. Don't put yourself in a predicament where this is your only option. In fact, keep doing what you're doing, smoke weed all day if you want. Doesn't matter. You'll get rewarded because in this society Mickey D's has got the money. They owe it to you." And I think that's a work mentality.
Payne concluded his screed by referencing the aggregate wages of fast food employees nationwide to support his claim that they don't actually need taxpayer-subsidized assistance programs:
PAYNE: By the way, people should know. They say it's between $3 to $7 billion that fast food workers get in care from the government. In the same time though, these fast food workers make between $41 and $46 billion. So who is subsidizing who?
While Payne is quick to dismiss that workers need these programs, absurdly citing aggregate earnings of fast food workers, facts show that they are indeed essential.
According to a recently released study by economists at the University of California, Berkeley and the University of Illinois, Urbana-Champaign titled "Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast Food Industry," "annual earnings in the fast food industry are well below the income need for self-sufficiency," and after accounting for limited work hours, the median annual earnings of a fast food worker stands at just $11,056 -- below the federal poverty threshold for an individual. Couple those low earnings with the fact that workers in the industry are twice as likely to be in households with total income below the poverty line, and it becomes clear that reliance on federal programs is necessary.
Indeed, fast food workers are overwhelmingly more reliant on public assistance programs than other segments of the workforce.
From the September 28 edition of Fox News' Cavuto On Business:
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From the September 21 edition of Fox News' Cavuto on Business:
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Fox News' Neil Cavuto trotted out well-worn falsehoods about the successful auto rescue, casting doubt on claims made by Ford CEO Alan Mulally on Cavuto's own show a year earlier.
On September 20, President Obama delivered a speech on the economy at a Ford Motors plant in Liberty, Missouri. During the speech, he noted that while Ford did not accept a bailout in the wake of the financial crisis, if General Motors (GM) and Chrysler had not accepted federal funds, it "would have had a profound impact on Ford."
Discussing the president's speech on Fox News' Your World, host Neil Cavuto was joined by Fox Business contributor Charles Payne and Wall Street Journal editorial board member Stephen Moore. Cavuto criticized the President's remarks about Ford being affected by GM and Chrysler's decision to accept federal funds. Cavuto acknowledged that Obama's remarks were similar to Mulally's, who credited the auto rescue for preserving the industry, but dismissed the statement, asking "how do you know that? It was my question then, it remains my question now."
While Cavuto cast doubt over whether or not Ford would have gone under, the fact that Ford would have been imperiled by the disintegration of the other "Big Three" automakers is not only well-established, Cavuto was told as much by Mr. Mulally himself on an edition of Your World taped one year previously.
During their interview, Mulally stated, "if GM and Chrysler, who were completely bankrupt, went into free fall they could have taken down the industry and the U.S. economy from a recession into a depression." He went on to state that all of the remaining automakers "would have been in real trouble."
In addition to downplaying the necessity of the auto rescue, the panelists hypothesized that private capital could have been raised to shore up teetering automakers. This opinion, voiced by Charles Payne stating, "I honestly believe that the private sector would have stepped up and funded General Motors the way that bankruptcies have been funded in the past," also does not comport with the facts.
When the auto rescues were first designed in late-2008 the financial industry was in the midst of a free fall of its own, which Fox has also recently downplayed. There was very little private capital available in the United States for any large-scale bankruptcy and American automakers, unlike the subsidiaries of Toyota, Honda, and other auto transplants, could not draw credit from foreign governments or headquarters.
The auto bailouts, which were initially extremely unpopular, are now widely lauded as successful government responses to the myriad crises facing the economy in 2008 and 2009. Despite Fox's attempts to undermine the administration's handling of the auto industry, the rescues are popular in areas heavily reliant on the auto-industry and often credited for swinging key states toward Obama in the 2012 Election.
Fox News promoted various falsehoods about poverty and anti-poverty programs, erroneously claiming that government programs cannot and have not reduced poverty levels.
On the September 19 edition of Fox News' America Live, guest host Alisyn Camerota hosted a panel discussion over House Republicans' plan to reduce funding for the Supplemental Nutrition Assistance Program (SNAP) -- formerly known as food stamps -- by nearly $40 billion over 10 years.
Camerota introduced the discussion by noting that the Census Bureau recently reported that the national poverty rate in 2012 remained at 15 percent. She then claimed that poverty in America is a problem "that growing government assistance programs cannot fix." Fox Business' anti-food stamp crusader Charles Payne then claimed that poverty rates have remained unchanged since the 1960s, casting doubt over the efficacy of anti-poverty programs. Payne later claimed that people living in poverty have a strong disincentive to work because of government programs.
Virtually every statement made by Camerota, Payne, and subsequently by Wall Street Journal editorial board member Mary Kissel about anti-poverty programs is false.
First, Camerota's claim about government assistance not lifting Americans out of poverty is directly contradicted by the very census report she cites. While it is true that 15 percent of Americans remain in poverty -- unchanged from 2011 -- the fact is that absent government anti-poverty programs, the number of Americans living in poverty would be millions greater. From the annual census report on income, poverty, and health insurance coverage:
- If unemployment insurance benefits were excluded from money income, 1.7 million more people would be counted as in poverty in 2012.
- If SNAP benefits were counted as income, 4 million fewer people would be categorized as in poverty in 2012.
- Taking account of the value of the federal earned income tax credit would reduce the number of children classified as in poverty in 2011 by 3.1 million.
Payne's claim that the rate has remained unchanged since the 1960s despite anti-poverty programs also doesn't stand up to scrutiny. Previewing the release of the annual census report, the Center on Budget and Policy Priorities (CBPP) anticipated such falsehoods, pointing out that they are "simply not valid or accurate." According to CBPP:
Comparing today's official poverty rate with those of the 1960s yields highly distorted results because the official poverty measure captures so little of the poverty relief that today's safety net now provides.
CBPP also included a chart showing just how effective anti-poverty programs have been at reducing poverty, and how rates would be reduced even further if the census accounted for noncash transfers.
Payne's statement about government assistance discouraging people from working is also dubious, given that he ostensibly cited the findings of a misleading report from the Cato institute that has been thoroughly debunked by economists as overstating benefits from welfare programs.
Fox has ramped up its misleading coverage of anti-poverty programs in recent weeks, going so far as to distribute its incredibly inaccurate special report on SNAP to members of Congress to assist efforts to reduce funding for the program.
From the September 19 edition of Fox's America Live:
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Fox News psychiatrist Keith Ablow used the anniversary of the September 11 attacks to smear President Obama with the accusation that "he hates us," but was elected because Americans suffered from Stockholm Syndrome.
In a discussion on Fox Business' Varney & Co. about the anniversary of the September 11 terror attack, host Stuart Varney asked Ablow whether America's psyche had changed in the twelve years after the attack. Ablow responded that America suffers from a "captive mentality" like Stockholm Syndrome. As evidence, Ablow pointed to the election of Obama, who he claimed "doesn't even like us, he hates us," concluding that "when things get bad enough," America "will elect a patriot" (emphasis added):
ABLOW: Yes, but I hope not irrevocably so. Because I think what it set in motion is a kind of captive mentality. The same kind of thing that happens when a plane is hijacked and people aboard say "You know what? I am starting to think like the people who took this plane over." Why? Because they want to be safe and they want to endear themselves to their adversaries. And I think that the whole Obama apology tour, the election of Barack Obama was a manifestation of us wanting to say, "Look, we are not that bad, don't hurt us. Here is this guy, how bad can we be? He doesn't even like us, he hates us and we are electing him president."
CHARLES PAYNE (Fox Business contributor): When do we come out of this Stockholm Syndrome that you are talking about, when do we escape it?
ABLOW: It's good to be with another psychiatrist. Stockholm Syndrome -- We escape it when things get bad enough from that failed psychological attempt. Right? what is it? It's a form of denial. Bad enough that, just like an alcoholic falling on the pavement, you say, "You know what, oh my God, this didn't work. Trying to dodge and weave around who we are and pretend we're other than that by electing someone friendly to adversaries is not working, hence we will elect a patriot, someone very high on the Constitution and someone who isn't afraid to use power when it's indicated." And then we'll set things right.
Fox's Charles Payne attempted to discredit fast-food workers' planned attempt to organize for union representation and a higher minimum wage by falsely claiming workers are arguing for a sliding scale of extra income.
Neil Cavuto hosted Fox Business contributor Charles Payne on the August 28 edition of Fox News' Your World with Neil Cavuto to discuss protests planned by fast-food workers, who are demanding higher pay and the right to unionize. Payne claimed during the segment that employers don't owe a debt to their employees and mischaracterized the minimum wage increase as a sliding scale of pay:
PAYNE: Listen, I don't begrudge anyone for trying to earn extra money, but what they're essentially saying is that their salary should be doubled from where they are. It doesn't match the skill set. Now, if we start to talk about this -- and listen, it's something that's been echoed all day long with theme of the March on Washington -- that somehow corporations owe a debt to people who work for them. So if Susan has two kids, she gets X amount of income, then she has another child, then the corporation should pay more money specifically because they owe her a debt and she had another kid -- sort of the responsibility or the welfare state that's been such a burden on America is now being thrusted, or attempted to be thrusted on the shoulders of corporate America.
But workers aren't demanding a sliding scale of income. They're organizing for fair representation at work and a single minimum wage increase. As Ezra Klein explained: "most workers have less power to negotiate raises than they did a generation ago":
Fox News hosts mislead viewers and each other by hyping the cost of a White House plan to fund high-speed Wi-Fi for schools while obscuring the plan's small impact on individual taxpayers.
On June 6, the White House unveiled the ConnectED initiative, a plan that would give 99 percent of American students access to "high-speed broadband and high-speed wireless" at school by 2018. The plan would be funded through a minimal tax increase on mobile phone users, which the as The Washington Post reported, "could work out to about $12 in fees for every cellphone user over three years."
Fox News similarly reported on the August 15 edition of Fox & Friends First that the initiative would only cost individual consumers about five dollars per year.
But a few hours later on Fox & Friends, the hosts and contributors seemed unable to accurately report what the predicted cost would be for individuals. Though co-host Gretchen Carlson asked Fox Business contributor Charles Payne to specify how much the initiative would "cost each of us as individuals," Payne claimed the "administration doesn't say" and instead hyped the program's net cost and unspecified higher taxes on the middle class:
PAYNE: The administration doesn't say. There's some estimates say it costs like $6 billion but you know how these estimates are when the government gets involved. We know It's going to be multibillions and billions of dollars. It's going to hit individuals, this brings us to the third point. Middle-class taxes, you know, there won't be middle-class tax hikes, but we know already there have been. These are the kinds of things that are taxes on normal, regular people. This would be a tax on every single person watching the show who didn't get a free phone from the government, they are going to have to chip in.
Later, a Fox News reporter once again explained that the increase would only be about five dollars per year, but Carlson remained confused about the ConnectED program's expected cost to individual consumers, saying in a subsequent segment: "I think it would be about $5 a year, or maybe $5 a billing cycle. I'm not exactly sure. But the entire cost is $4 to $6 billion."
Payne and Carlson both followed the media's common practice of relying on abstract and sensational raw number figures when discussing budgetary issues while either ignoring or misreporting the context that would make those figures relevant to viewers. Economists have noted that focusing on raw numbers rather than budgetary percentages or individual costs in economic reporting is often little more than a scare tactic intended to drum up fears about the economy. And Dean Baker of the Center for Economic and Policy Research has noted that the reliance on raw numbers also increases the likelihood that outlets will misreport information.