On Fox News, Economic Stimulus Is An Economic “Distraction”


Fox News host Jon Scott dismissed President Obama's efforts to raise the minimum wage and strengthen overtime pay protections for millions of workers as a distraction from the economy -- an unusual sentiment, given that experts believe both measures would have a stimulative effect on the economy.

On March 13, President Obama used his executive authority to direct the Labor Department to change standards in order to increase the number of salaried workers who qualify for overtime compensation under the Fair Labor Standards Act. From The New York Times:

Under the new rules that Mr. Obama is seeking, fewer salaried employees could be blocked from receiving overtime, a move that would potentially shift billions of dollars' worth of corporate income into the pockets of workers. Currently, employers are prohibited from denying time-and-a-half overtime pay to any salaried worker who makes less than $455 per week. Mr. Obama's directive would significantly increase that salary level.

In addition, Mr. Obama will try to change rules that allow employers to define which workers are exempt from receiving overtime based on the kind of work they perform. Under current rules, if an employer declares that an employee's primary responsibility is executive, such as overseeing a cleanup crew, then that worker can be exempted from overtime.

On the March 13 edition of Fox's Happening Now, co-host Jon Scott questioned whether raising the minimum wage would be “sufficient to distract people from the jobs and the economy and maybe Obamacare.” In a later discussion with Washington Times columnist Charlie Hurt, Scott derided President Obama's plans to strengthen overtime pay protections as a “political tactic” meant to “score political points.” Hurt agreed, and concluded that, like raising the minimum wage, expanding overtime pay rules “doesn't really help the economy in any great way”:

Expert opinion flies in the face of Hurt's claim and turns Scott's idea that raising the minimum wage is a distraction from the economy on its head. In addition to benefiting millions of workers by boosting incomes, over 600 economists agreed in an open letter to Obama and congressional leaders that an increase could have a “small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth.” The Economic Policy Institute (EPI) also found that Obama's proposal to increase the federal minimum wage would create approximately 140,000 jobs.

Revising overtime pay rules would also raise the pay of several million American workers, while helping to address income inequality and grow the economy. The EPI found that “about 10 million would benefit from a rule that made clear that anyone earning less than $50,000 a year is not exempt from overtime pay and must be paid time-and-a-half for overtime work.”  And according to Jeff Grabelsky, associate director of The Worker Institute at Cornell University, ensuring that employees receive overtime pay could help address income inequality and wage stagnation while promoting economic growth:

The president's decision could raise the pay of several million workers who may currently be misclassified as managers by employers hoping to avoid overtime requirements. Along with efforts to increase the federal minimum wage to $10.10 per hour, this executive order could help address the crisis of growing income inequality in the U.S.

Despite the fact that corporate profits have nearly doubled since the Great Recession ended in June 2009, workers have continued to suffer from wage stagnation. In fact, the share of gross domestic income that went to workers fell to a record low in 2012, just 42.6 percent.

Growing income inequality is a persistent problem in the United States and contributes to anemic economic growth. Every policy intervention that can help reverse that trend - more robust labor standards, stricter regulatory enforcement, raising the minimum wage, properly classifying employees - should be pursued. Obama's decision is a good one.

This attempt to dismiss raising the minimum wage and strengthening overtime protections as merely a distraction is nothing new for Fox, and reflects the network's tendency to mislead on policies that would fight income inequality and promote economic growth.