Washington Post columnist and former Republican speechwriter Marc Thiessen erroneously claimed that a recent report shows the Affordable Care Act (ACA) will reduce wages and cause a "$70 billion pay cut" when in fact the report shows that the health care law will result in increased compensation.
On February 4, the Congressional Budget Office (CBO) released its annual 10-year projection of current policy's impact on the budget and economy. The report garnered so much attention following its release that CBO Director Doug Elmendorf was forced to issue a public response refuting misleading allegations that the ACA would erase up to 2.5 million jobs over the next decade.
Having lost the battle to spin the ACA as a job killer, right-wing media have pivoted to a new erroneous claim: Americans will see a "$70 billion pay cut" thanks to the health reform law.
On February 10, Washington Post columnist Marc Thiessen published an op-ed claiming that "buried on page 117" of the CBO report was evidence of the ACA depressing American wages. Thiessen spun the report's mention of a "roughly 1 percent reduction in aggregate labor compensation over the 2017-2024 period" to mean that the health care law was taking money out of the pockets of working-class Americans. From The Washington Post:
Obamacare means a 1 percent pay cut for American workers.
How much does that come to? Since wages and salaries were about $6.85 trillion in 2012 and are expected to exceed $7 trillion in 2013 and 2014, a 1 percent reduction in compensation is going to cost American workers at least $70 billion a year in lost wages.
Economist Dean Baker of the Center for Economic and Policy Research was quick to note that the next decade will see relative compensation increase as a result of health reform. Had Thiessen included the CBO's actual conclusion in his analysis, he would have found that the CBO projects hours worked to decrease more than relative compensation. From CEPR (emphasis added):
"According to CBO's more detailed analysis, the 1 percent reduction in aggregate compensation that will occur as a result of the ACA corresponds to a reduction of about 1.5 percent to 2.0 percent in hours worked. (p 127)"
We checked with Mr. Arithmetic and he pointed out that if hours fall by 1.5 to 2.0 percent, but compensation only falls by 1.0 percent, then compensation per hour rises by 0.5-1.0 percent due to the ACA. In other words, CBO is telling us that for each hour worked, people will be seeing higher, not lower wages. That is the opposite of a pay cut.
In a February 6 New York Times op-ed addressing the CBO's findings, Nobel Prize-winning economist Paul Krugman arrived at a similar conclusion. Among numerous corrections of right-wing media distortion, Krugman noted that "wages will go up, not down" in response to a marginally and voluntarily diminished supply of labor over the next decade.
This sort of factual analysis is missing from a right-wing media landscape unilaterally aligned against every facet of the ACA. Right-wing media have spent years promoting an array of false claims about the calamitous effects of the health care law, and recent Media Matters research exposed conservative media turning to misrepresentations of the CBO's findings to support claims that the ACA is going to destroy the job market.
Congress is debating whether to give the president the authority to fast-track a massive free trade agreement -- the Trans-Pacific Partnership -- between the U.S., Canada, and 10 nations from the Asia-Pacific region. The nations involved in the talks account for nearly 40 percent of the world's GDP and 26 percent of the world's trade, but weekday evening television news broadcasts have largely ignored the topic.
Fox Business contributor Charles Payne argued that a businessman "may be a couple of years ahead of the curve" after he drew parallels between the treatment of the wealthy in America and "fascist Nazi Germany."
On January 24, The Wall Street Journal published a letter to the editor comparing the alleged "demonization of the rich" to the boiling over of European anti-Semitism that led to the Holocaust. The letter, written by billionaire venture capitalist Tom Perkins, questions whether a "Progressive Kristallnacht" looms on the horizon:
Progressive Kristallnacht Coming?
Regarding your editorial "Censors on Campus" (Jan. 18): Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its "one percent," namely its Jews, to the progressive war on the American one percent, namely the "rich."
From the Occupy movement to the demonization of the rich embedded in virtually every word of our local newspaper, the San Francisco Chronicle, I perceive a rising tide of hatred of the successful one percent. There is outraged public reaction to the Google buses carrying technology workers from the city to the peninsula high-tech companies which employ them. We have outrage over the rising real-estate prices which these "techno geeks" can pay. We have, for example, libelous and cruel attacks in the Chronicle on our number-one celebrity, the author Danielle Steel, alleging that she is a "snob" despite the millions she has spent on our city's homeless and mentally ill over the past decades.
This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendant "progressive" radicalism unthinkable now?
Mr. Perkins is a founder of Kleiner Perkins Caufield & Byers.
In response to media criticism, Perkins defended his remarks during a January 27 interview with Bloomberg. Perkins admitted that Kristallnacht was a "terrible word to have chosen," but reiterated that he neither regrets nor retracts his core argument that the rich are being demonized and persecuted in the United States.
The sentiment that America's ultra-wealthy are being singled out for persecution is shared by some voices in the right-wing media. On the January 28 edition of Fox Business' Varney & Co., contributor Charles Payne glossed over Perkins' demeaning allusion to the horrific, racially-motivated violence that defined Nazi Germany at the onset of the Holocaust. Rather than criticizing the paranoia of Perkins' comments, Payne argued that the wealthy have "justified rage" and Perkins "may be a couple of years ahead of the curve":
Fox News has a history of facile and offensive comparisons of progressive economic or social policies with Nazi Germany. This is not even the first time a Fox employee has used Kristallnacht as the impetus for their faux outrage. In response to his recent indictment for violating campaign finance regulations, Fox darling Dinesh D'Souza wasted no time in parroting the "this is like Nazi Germany" line.
The fact remains, the United States in no way resembles Nazi Germany and there is no legitimate defense of Tom Perkins, or any other person, comparing Kristallnacht and other Nazi atrocities to protestors advocating in favor of better wages, affordable housing, and reasonable income tax rates for high earners. Perkins, a yacht-enthusiast who owns high-end property around the world as well as his own personal submarine, is not witnessing the sort of persecution faced by European Jews in the 1930s. The real Kristallnacht (November 9-10, 1938) saw intense racial violence in which 267 synagogues were destroyed, at least 91 innocent Jewish citizens of Germany were killed in the streets, and tens of thousands more were rounded up and placed in concentration camps. Most of them would die before Europe was liberated from Nazi oppression.
At Fox News, President Obama's push to increase the federal minimum wage for millions of American workers through legislative and executive action is merely a "symbolic" gesture.
On January 28, the White House announced that President Obama had authorized an executive order raising the minimum pay for federal workers to $10.10 per hour, a regulation that will be effective for all employees signing a new federal contract. According to the White House's official press release, the president hopes that this move will encourage Congress to take action on a proposal by Representative George Miller (D-CA) and Senator Tom Harkin (D-IA) to increase the federal minimum wage to $10.10 for all American workers.
On the January 28 edition of Fox News' America's Newsroom, co-host Bill Hemmer called the move a "shot across the bow" for congressional Republicans resisting an increase to the minimum wage. Fox Business' Stuart Varney questioned the White House's motivation, claiming that it was a "symbolic" move motivated by political circumstances and concluding that an executive order lifting wages for all federal employees was simply "not a big deal":
Varney's disregard for the impact of executive action on the minimum wage mirrors comments from other Fox News personalities. On the January 27 edition of The Real Story, contributor Charles Payne scoffed at the notion that lifting the minimum wage is an important goal, noting, "higher minimum wage is not the cure, we're talking about something that impacts less than 3 percent of real workers."
Demos' Heather McGhee hailed the Obama administration for lifting federal pay through executive order, noting that the decision "adds momentum to the fight for a federal minimum wage increase." According to research from the Economic Policy Institute, adopting a $10.10 minimum wage nationwide, which would require congressional legislative action, would positively impact the wages of more than 27 million workers while boosting overall economic growth by $22 billion and creating enough economic demand to support 85,000 new jobs.
Increasing the federal minimum wage to $10.10 nationwide also has the support of hundreds of economists around the country, including numerous Nobel Laureates.
In an economy as large as the United States, while it may be easy for right-wing media voices to shrug off the implications of minimum wage policies, the fact is that, according to the Bureau of Labor Statistics, roughly 3.6 million American workers currently work at or below the federal minimum wage of $7.25 per hour. After adjusting for inflation, the federal minimum wage is lower than at any point from the 1950s to the early 1980s.
Right-wing media's opposition to raising the minimum wage has grown as public sentiment has turned in favor of it. Varney's pattern of deriding both policies to lift wages and low-wage workers themselves appears to be par for the course.
New research reveals that the Affordable Care Act has a relatively strong effect on reducing income inequality and economic insecurity for low-income Americans. However, given past coverage of the law, this fact is likely to go underreported in media.
A new study from the non-partisan Brookings Institution projects the Affordable Care Act (ACA, or "Obamacare") to positively impact low-income Americans. The research, performed by economists Henry Aaron and Gary Burtless, reviews a comprehensive income measure combining wages, the value of employer-provided health insurance, and the value of government-subsidized coverage. The authors project that the ACA will increase incomes in the bottom-fifth of the population by almost 6 percent, while increasing incomes in the bottom-tenth of the population by more than 7 percent.
Additionally, the authors found that positive "benefits of the ACA to low-income families would have been greater if the enacted version of the law had been put into effect." According to the study, the Supreme Court's landmark 2012 decision upholding the law, but allowing states to opt-out of expanding Medicaid to low-income residents, has dampened the effectiveness of health care reform -- preventing nearly 6 percent of the American population in the lowest 20 percent of income earners from accessing free health coverage through Medicaid. If not for the Supreme Court's decision, and corresponding "state inaction," the relatively strong impact of the ACA in reducing inequality for low-income Americans would have been greater.
The study concludes that, while the ACA does not positively impact the income of all Americans, the "small proportional drops in income" correspond with "larger proportional gains" for the poorest quarter of the working population. The graph below shows the average expected impact of the ACA on after-tax adjusted incomes for each tenth of the wage spectrum. The results show that corresponding positive impacts at the bottom of the income bracket more than make up for marginal decreases at higher income levels.
Previous Media Matters research has exposed how the media almost never mentions the positive impact of health insurance access on reducing economic inequality and strengthening economic security. Instead, media outlets opted to focus on the difficult rollout of Obamacare health care exchanges -- notably Healthcare.gov. The lack of discussion regarding the positive impact of the ACA on reducing economic inequality is particularly pervasive among right-wing media, where policy proposals aimed at reducing inequality are treated as trivial and unimportant.
Image via southerntabitha using a creative commons license
Fox News is misleadingly touting the results of a recent poll to falsely claim that a majority of Americans don't care about inequality and believe that government should do nothing to reduce it.
On the January 23 edition of Fox & Friends, hosts Brian Kilmeade, Steve Doocy, and Elisabeth Hasselbeck discussed the recent policy pivot by Republicans and Democrats toward addressing income inequality. During the segment, the results of Fox News poll in which respondents were asked to prioritize pressing economic issues were displayed on screen:
Doocy used the results of the poll to claim that Americans are unconcerned about rising income inequality:
DOOCY: This is what you're concerned about. Forty percent of you are worried most about jobs and unemployment. About the same number worried about the deficit and how much the government spends. Meanwhile, you wind up with "income inequality" at only 12 percent.
Later that day on America's Newsroom, co-host Martha MacCallum and Fox News contributor Monica Crowley returned to the poll, claiming that the results also showed most Americans do not want the government to take action to reduce income inequality. During the segment, the following graphic ran on the screen:
Fox, and the poll they cite, are creating a false choice between reducing income inequality, creating jobs, and addressing the deficit.
Numerous economists, including Jared Bernstein, former Labor Secretary Robert Reich, and Nobel Laureate Paul Krugman have argued that rising inequality is bad for the economy and creates a drag on economic growth. Furthermore, in their recent book, "Getting Back to Full Employment," Bernstein and economist Dean Baker outlined proposals that could create jobs while lifting wages and reducing reliance on government safety net programs, thereby positively impacting job creation while reducing some pressure from the federal budget. In the view of many prominent economists, Americans do not have to choose between jobs, deficit reduction, or reducing economic inequality; sensible policies can be implemented to address each issue.
Additionally, while MacCallum suggested that few Americans want government action to reduce inequality, the actual poll shows that participants were never asked about inequality. Instead of being asked "How do you feel about income inequality" as Fox showed on air, the actual question in the poll was "How do you feel about the fact that some people make a lot more money than others?"
Differences in individual earnings, which the poll asked about, and structural inequality -- the idea that a small share of earners at the top capture nearly all income gains -- are not the same thing.
When Americans are asked directly about whether or not government should do anything to mitigate income inequality, the results are quite different from what Fox claims. According to a January 23 poll conducted by the Pew Research Center and USA Today, 69 percent of Americans believe that government should do "a lot" or "some" to reduce inequality.
Furthermore, a majority of respondents -- 54 percent -- support raising taxes on the wealthy and expanding programs for the poor in order to help close the income gap.
Media Matters research shows that Fox, along with other right-wing media outlets, consistently misrepresents the issue of economic inequality. These skewed poll results are just the latest in a long line of examples.
Conservative media figures have sharply criticized the recent push by Democratic politicians to alleviate poverty and reduce economic inequality. However, most of this criticism is grounded in a number of myths about the causes, effects, and importance of growing economic inequality in the United States.
In the second half of 2013, weekday broadcast and cable evening news discussed Social Security in a largely negative light by repeatedly insisting that the program is insolvent, must be cut, or poses a risk to long-term fiscal security.
Fox News' Neil Cavuto continued to ignore the desperate need for infrastructure investment in the United States, repeatedly arguing instead that the government is stealing or misappropriating existing resources.
On the January 13 edition of Fox News' Your World, host Cavuto invited former Secretary of Transportation Ray LaHood to discuss proposals to raise the federal gas tax to fund construction, repair, and renovation of America's crumbling transportation infrastructure. Rather than acknowledging the need to raise revenue to fund necessary projects, Cavuto made the unsubstantiated claim that federal, state, and local funds for infrastructure investment are being stolen or abused:
The paranoid and unsupported claims made by Cavuto during the segment echo his comments from a contentious December 3 interview with Representative Earl Blumenauer (D-OR). On both occasions, Cavuto claimed without evidence that "someone" in the government had "stolen," "abscond[ed]," or "[run] off with" billions of dollars earmarked for vital improvements to roads, bridges, dams, and other infrastructure systems.
Once again, the only proof that Cavuto provided to support his claims is the fact that American infrastructure is in a state of disrepair. As Media Matters has shown in the past, the dilapidated condition of America's infrastructure is entirely the result of insufficient funding, not the alleged fraud, theft, or misappropriation suggested by the Fox host.
According to the American Society of Civil Engineers (ASCE), the public infrastructure of the United States earned a D+ grade in 2013 and is in need of $3.6 trillion worth of investments and upgrades by 2020. The ASCE estimates the cost of modernizing only America's bridges to be $121 billion, roughly equivalent to all of the revenue streams cited by Cavuto as excessive and wasteful during his tirade against the gas tax.
The reason that former Secretary LaHood, Representative Blumenauer, and others advocate raising the gas tax is precisely because the amount currently raised and spent by the federal government on infrastructure investments is too small. The federal tax, which has not be raised in 20 years, is one of many proposals to close this funding gap.
Instead of engaging in a substantive and important policy discussion, Fox News would rather promote its own narrative that all federal spending is riddled with fraud and abuse.
Right-wing media have spent the last few years baselessly dismissing the decades-long push to alleviate poverty as not worth the fight, despite evidence showing that government efforts to reduce poverty have been successful.
On January 8, 1964, President Lyndon B. Johnson used his State of the Union address to enumerate proposals that would come to be known as the War on Poverty. Many of the proposals and policy prescriptions outlined in the president's speech were eventually signed into law.
Recent research from the Columbia Population Research Center at Columbia University reveals the extent to which anti-poverty programs since the 1960s have alleviated poverty for millions of Americans. The study, titled "Trends in Poverty with an Anchored Supplemental Poverty Measure," uses a uniform measure of poverty (supplemental poverty measure or SPM) to show a dramatic drop-off in poverty rates from 1967 to 2011. From the study (emphasis added):
The OPM shows the overall poverty rates to be nearly the same in 1967 and 2011 -- at 14% and 15% respectively. But our counterfactual estimates using the anchored SPM show that without taxes and other government programs, poverty would have been roughly flat at 27-29%, while with government benefits poverty has fallen from 26% to 16% -- a 40% reduction. Government programs today are cutting poverty nearly in half (from 29% to 16%) while in 1967 they only cut poverty by about one percentage point.
Today, despite mounting evidence of their success, the corresponding anti-poverty programs created during the War on Poverty face incessant and withering criticism from conservative politicians and their right-wing media allies. Conservative media voices regularly repeat the claim that anti-poverty programs are useless, or that after 50 years they are no longer working. In fact, as recently as January 7, Fox News host Martha MacCallum cast doubt on whether or not lowering the poverty rate over the past five decades was worth the effort, but the following graph from The New York Times' Economix blog shows just how effective these programs have been:
Source: The New York Times, Economix Blog, "The War On Poverty at 50"
In addition to questioning the general efficacy of anti-poverty relief efforts, right-wing media voices have targeted specific Johnson-era programs and initiatives like Social Security, Medicare and Medicaid, expanded food stamps and welfare, and an increased minimum wage in their coordinated attempt to undermine the social safety net, effectively stymying the purpose of the War on Poverty.