Recently there was a piece by TownHall on how liberals are wrong about income inequality (feel free to spam their comments section with this post). It was such a hack job that it is was hardly worth mentioning but because I saw it all over Facebook I thought I would create my own counter to it. The piece didn’t have any single study cited or historical examples, it just relied on basic rhetoric and common memes spread through right wing media that they are exposed to on a daily basis and believe it as if it is gospel.
Lie number 1 – The higher the government mandated minimum wage/living wage, the more people it prices out of jobs:
This is already a debunked myth dating as far back as 1998, when David Card and Allen Krueger did a case study on minimum wage and found that there was no immediate change in employment from increasing the minimum wage.
In the Townhall piece there were no links to countering data or studies that showed why Card and Krueger may have been wrong in their conclusion. The author just relied on rhetoric and typical talking points.
One of those talking points was in referencing companies going to automation, via technology, to replace those jobs. While it is true that many jobs are being lost to automation, it was not because of high wages, it is because no matter what wage someone earns, a machine is always going to be cheaper and perfectly obedient. So if the minimum wage remained the same or reduced, the incentive to replace them with automation will still exist.
There is also the great example of Australia, which has double the minimum wage we have and a lower unemployment rate.
Lie number 2 – It emphasizes making people more comfortable, not helping them succeed:
In this instance the author tries to lay claim to the myth that if you work at a minimum wage job it isn’t supposed to be to support yourself. The author seems to think that all minimum wage earners are teenagers or people using it as supplemental income.
More than three quarters of minimum wage earners are 25 years and older. This is when people are out of college making a living and supporting themselves.
Lie number 3- The more government becomes involved, the more it stagnates the economy:
This is really a strange claim as it doesn’t grow the size of the government, it only changes how the income pie in the private sector is distributed. Most people, both liberal and conservative, can’t stand having the government more involved in the economy, so claiming that liberals want more government involvement is simply not true. With more income at the bottom there would be LESS involvement in the form of fewer dollars needed for food stamps and other welfare benefits.
Lie number 4 – The more the government focuses on income inequality, the harder it is to get ahead:
Oh I thought this section was great. They use a Thomas Sewell quote, the republicans way of pretending to have a more racially diverse economic support in their tent. Then they go on to lay the claim that doubling the pay at Walmart will have an adverse effect on the poor. While Wal-Mart will no doubt see a rise in prices from increasing the minimum wage it is far too small to make a dent in the increase the poor would receive in higher wages. The same university that helped Card and Kreuger conduct their study also did one on what minimum wages would do to poor people who shopped at Wal-Mart:
[box type=”shadow”] “Even if Walmart were to pass 100 percent of the wage increase on to consumers, the average impact on a Walmart shopper would be quite small: 1.1 percent of prices, well below Walmart’s estimated savings to consumers. This works out to $0.46 per shopping trip, or $12.49 per year, for the average consumer who spends approximately $1,187 per year at Walmart. This is the most extreme estimate, as portions of the raise could be absorbed through other mechanisms, including increased productivity or lower profit margins.”[/box]
Lie number 5 – It ignores the real causes of poverty:
In this section the author tries to claim that poor people are poor because of life choices. While this may be true for some (anyone who went to college should have experience being poor), it is not backed up by any real study or correlation. The fact is when you are poor and you screw up, it makes it much more harder to recover than if one is middle class, upper middle class, or rich.
And what really constitutes a poor life choice? Is it an emergency medical bill? Graduating from college with a degree in a field that disappeared after the economic crash? Increased living expenses? Or does the author mean people buying expensive shoes and living beyond ones means? There are numerous reasons why people end up being poor, but it isn’t because people are consuming themselves into debt ridden poverty.
So if you see a friend of yours use the TownHall piece please respond with this piece, as misinformation needs to be fought with hard facts and empirical data.