Throughout the month of July, a majority of Fox News' segments discussing minimum wage policy pushed the myth that increasing the minimum wage forces businesses to cut jobs. In fact, multiple economic studies confirm that raising the minimum wage has no effect on employment.
Majority Of Fox's July Reports On Minimum Wage Argued Wage Hikes Lead To Job Losses
A Majority Of Fox News' July Coverage Of The Minimum Wage Claimed Wage Hikes Increased Unemployment. A Media Matters count of Fox News segments covering the minimum wage during the month of July determined that 24 out of 37 segments -- 65 percent -- included the myth that increasing the minimum wage would cause job losses.
Only One Fox News Segment Acknowledged That Minimum Wage Raises Do Not Cause Unemployment. Only one segment, or just under three percent of Fox News' coverage, acknowledged the fact that minimum wage hikes are not correlated with unemployment.
68 Percent Of Fox News' Segments Focused On D.C.'s Effort To Enact A Living Wage. Twenty-five of the 37 segments concerning the minimum wage focused on the D.C. Large Retailer Accountability Act, a pending D.C. City Council bill to enact a living wage of $12.50 per hour for employees at big box retailers with annual incomes of at least $1 billion.
Of Those Segments, 72 Percent Claimed D.C.'s Living Wage Bill Would Lead To Job Losses. Eighteen of Fox's 25 segments discussing the D.C. Large Retailer Accountability Act claimed that the bill would increase unemployment.
Economic Studies Conclude Minimum Wage Increases Do Not Raise Unemployment Rates
CEPR Economist: Increasing The Minimum Wage Has “No Discernible Effect On Employment.” In a Center for Economy and Policy Research report titled “Why Does the Minimum Wage Have No Discernible Effect on Employment?” senior economist John Schmitt determined that there is “little or no employment response to modest increases in the minimum wage.” According to Schmitt, extensive research revealed that raising the minimum requirement has little or no statistically significant effects on employment at all. [Center for Economic and Policy Research, February 2013]
IRLE Experts: “No Employment Effects Of Minimum Wage Increases.” A 2010 Institute for Research on Labor and Employment study determined that minimum wage increases do not lower employment rates. The authors explained:
[O]ur results explain the sometimes conflicting results in the existing minimum wage literature. For the range of minimum wage increases over the past several decades, methodologies using local comparisons provide more reliable estimates by controlling for heterogeneity in employment growth. These estimates suggest no detectable employment losses from the kind of minimum wage increases we have seen in the United States. Our analysis highlights the importance of accounting for such heterogeneity in future work on this topic. [Institute for Research on Labor and Employment, November 2010]
EPI: More Than 650 Economists Agree That “Modest Increases In The Minimum Wage Have Had Very Little Or No Effect On Employment.” More than 650 economists -- including Nobel Laureates and former presidents of the American Economics Association -- signed a statement affirming that increasing the minimum wage would have little or no effect on employment but would improve workers' well-being:
We believe that a modest increase in the minimum wage would improve the well-being of low-wage workers and would not have the adverse effects that critics have claimed. In particular, we share the view the Council of Economic Advisors expressed in the 1999 Economic Report of the President that “the weight of the evidence suggests that modest increases in the minimum wage have had very little or no effect on employment.” While controversy about the precise employment effects of the minimum wage continues, research has shown that most of the beneficiaries are adults, most are female, and the vast majority are members of low-income working families. [Economic Policy Institute, 2006]
The D.C. Living Wage Would Help Low-Income Workers Without Threatening Employment
D.C. Workers Require A High Minimum Wage Because Of D.C.'s High Cost Of Living. According to the MIT Living Wage Calculator, which uses 2012 data to scale hourly wages to living expenses, the hourly wage that supports one adult in D.C. is $13.68 -- over five dollars higher than the city's current minimum wage. According to MIT, an adult requires a pre-tax annual income of $28,454 to live in D.C., yet a person who works 40 hours for the entire 52 weeks a year at D.C.'s current minimum wage of $8.25 earns only $17,160 annually. [The Living Wage Calculator, accessed 7/30/13]
CLRE: A Living Wage Would Help Low-Income Families. In 2011, the UC Berkley Center for Labor Research and Education reviewed a metro area with a high cost of living and concluded that instituting a living wage at Walmart in that location would help low-income workers:
Our analysis reveals that establishing a higher minimum wage for large retailers like Walmart would have a significant impact on workers living in poverty or near-poverty. We find that 41.4 percent of the pay increase would go to workers in families with total incomes below 200 percent of the federal poverty level (200 percent FPL). These poor and low-income workers could expect to earn an additional $1,670 to $6,500 a year in income for each Walmart employee in the family, before taxes. [Center for Labor Research and Education, April 2011]
Economist Mark Brenner: “To Date There Has Been No Evidence Of” Living Wage “Laws On The Books Leading To Systematic Job Losses.” In an interview conducted by the Political Economy Research Institute, Brenner argued that living wage laws would not harm unemployment. According to Brenner, economists who argue otherwise rely on “weak” evidence and inaccurate models. [Political Economy Research Institute, accessed 7/30/13]
EPI: “There Have Been Either No Or Only Small Employment Losses As A Result Of Adopting Living Wages.” In a comprehensive analysis examining how a living wage affected businesses, the Economic Policy Institute found an agreement among economists that instituting living wages, even in specific sectors, resulted in little to no employment loss:
A frequently expressed concern about living wage ordinances is that the increased cost might decrease employment opportunities for low-skilled workers by causing employers to hire fewer workers or even lay off employees. The employment impact of living wage ordinances is a primary focus of most recent living wage studies. In attempting to answer the question of whether or not living wage ordinances have a significant impact on employment, different researchers have used a variety of approaches, ranging from qualitative interviews with service contractors and affected workers, to detailed before-and-after analysis of impacted firms, to econometric analyses of readily available labor market data. Most of the available studies have concluded that there have been either no or only small employment losses as a result of adopting living wages. [Economic Policy Institute, 2/15/06]
Economists Find Presence Of Walmart Not Tied To Increased Prosperity, May Increase Poverty
Economists: “Each Wal-Mart Worker Replaces Approximately 1.4 Retail Workers.” Many of Fox News' segments focused on Walmart's announcement that it would not move forward with plans to build at least three stores in D.C. because D.C.'s proposed living wage bill required big box retailers to pay workers a living wage. But according to a Journal of Urban Economics study by economists David Neumark, Junfu Zhang, and Steven Ciccarella, the presence of Walmart's stores would have increased unemployment in DC:
The employment results indicate that a Wal-Mart store opening reduces county-level retail employment by about 150 workers, implying that each Wal-Mart worker replaces approximately 1.4 retail workers. This represents a 2.7 percent reduction in average retail employment. [Journal of Urban Economics, July 2007]
Economists Stephan Goetz And Hema Swaminathan: Presence Of Walmart Is Linked To Higher Poverty Rates. Contrary to the assertions by Fox News pundits that the D.C. living wage bill harmed low-income job seekers, a 2006 study published by the Social Science Quarterly found that counties with Walmarts are correlated with higher poverty rates. According to the economists Stephan Goetz and Hema Swaminathan, “counties with more initial (1987) Wal-Mart stores and counties with more additions of stores between 1987 and 1998 experienced greater increases (or smaller decreases) in family-poverty rates during the 1990s economic boom period.” [Social Science Quarterly, 5/9/06]
METHODOLOGY: Media Matters searched internal video archives of all Fox News Channel recordings from 7/1/13 to 7/31/13 for the terms “wage” or “wages,” and “wal-mart” or “walmart.” Only segments that included discussion of minimum wage policy were included, and repeated shows and teases were excluded. Segments predicting a slowdown in future hiring from minimum wage increases were counted as segments describing job losses.