Tonight’s post is about poor reporting of the news and some probable misrepresentation of the facts or lack of knowledge about the facts by a U.S. Senator. All the direct information comes from the newspaper article so if any of it is incorrect or incomplete it is because the information was incorrect or incomplete in the article. The headline in the Peoria Journal Star reads “Senate fails to raise the minimum wage.” (story from the Associated Press, 10/20/05, page A8.) This is not about whether the minimum wage should or should not be raised. It is about reporting the story and the statement that the Senator allegedly made.
Here are the facts as given in the article. The minimum wage is currently $5.15 per hour. The proposal is to increase it by $1.10 over eighteen months to $6.25 per hour. Here is the quote, (Senator Edward) “Kennedy, D-Mass., … pointed out that a single parent with two children working a minimum wage job earns $10,700 a year, $4,500 below the poverty line.”
Here is the situation that Senator Kennedy certainly should know about (I do) and yet he seems to ignore it to try to achieve his goal. Also, any good reporter should know this and certainly should have reported it if he is going to report the $4,500 below the poverty level remark because it makes a difference in the statement. The amount of money earned by wages can not be adequately understood without looking at the entire picture.
Congress a number of years ago passed the “earned income credit” provision for the federal income tax system to encourage people to work. Using the figures for a 2004 income tax return, a family of two children with one adult working would pay no income tax. They would however receive from the federal government through the income tax system $4,290 (based on total income between $10,700 & $10,750) as an “earned income credit.” Consequently, unless that was figured into the equation by Senator Kennedy and the article is totally silent on that so there is no way for the reader to know, his statement is misleading. Counting the $4,290 in ‘earned income credit,” the family is not $4,500 below the poverty level but just $210 under. That is a great deal of differ when one is talking about such figures. In fact, the family makes up over 95% of the difference through the “earned income credit.” The story and/or Senator Kennedy’s statement is totally slanted unless the “earned income credit” is accounted for. Yet, the article does not mention it at all.
Here is some additional information that has impact on this article and yet was ignored. If the minimum wage was $6.25 under the 2004 tax provisions, that family would have earned $2,288 more over the year. They would still have paid no federal income tax. The earned income credit would have actually given the family more money—$4,300 which is the maximum amount a family with two children could have received in 2004 under the law. Also, this family would have received an additional $338 through the “additional child tax credit” provision. Consequently, under such a minimum wage increase, the family income would have increased in 2004 from the originally implied income of $10,700 (implied because it did not account for the $4,290 of “earned income credit”) to $17,626 including a $2,288 wage increase, $4,300 in “earned income credit,” and $338 in “additional child tax credit.” Also, many government aid programs take into account three basic factors which are income for that year, total assets, and number of members in the immediate family. An increase in the minimum wage may or may not impact any of these programs and that information was not mentioned. Finally, we probably all know or have heard of individuals who are living with someone else (who may or may not be earning additional money) who is not being factored into the situation.
The point is this: the whole question of increasing the minimum wage (I did not begin to mention all of the factors including the government’s definition of the poverty line.) is much more complex than the article implies and that the Senator is quoted as understanding it. It is difficult for the general public to reach a valid conclusion unless they have all the information available. My conclusion; that article did more to muddy the facts than to bring them forward for intelligent decision making.
Here are the facts as given in the article. The minimum wage is currently $5.15 per hour. The proposal is to increase it by $1.10 over eighteen months to $6.25 per hour. Here is the quote, (Senator Edward) “Kennedy, D-Mass., … pointed out that a single parent with two children working a minimum wage job earns $10,700 a year, $4,500 below the poverty line.”
Here is the situation that Senator Kennedy certainly should know about (I do) and yet he seems to ignore it to try to achieve his goal. Also, any good reporter should know this and certainly should have reported it if he is going to report the $4,500 below the poverty level remark because it makes a difference in the statement. The amount of money earned by wages can not be adequately understood without looking at the entire picture.
Congress a number of years ago passed the “earned income credit” provision for the federal income tax system to encourage people to work. Using the figures for a 2004 income tax return, a family of two children with one adult working would pay no income tax. They would however receive from the federal government through the income tax system $4,290 (based on total income between $10,700 & $10,750) as an “earned income credit.” Consequently, unless that was figured into the equation by Senator Kennedy and the article is totally silent on that so there is no way for the reader to know, his statement is misleading. Counting the $4,290 in ‘earned income credit,” the family is not $4,500 below the poverty level but just $210 under. That is a great deal of differ when one is talking about such figures. In fact, the family makes up over 95% of the difference through the “earned income credit.” The story and/or Senator Kennedy’s statement is totally slanted unless the “earned income credit” is accounted for. Yet, the article does not mention it at all.
Here is some additional information that has impact on this article and yet was ignored. If the minimum wage was $6.25 under the 2004 tax provisions, that family would have earned $2,288 more over the year. They would still have paid no federal income tax. The earned income credit would have actually given the family more money—$4,300 which is the maximum amount a family with two children could have received in 2004 under the law. Also, this family would have received an additional $338 through the “additional child tax credit” provision. Consequently, under such a minimum wage increase, the family income would have increased in 2004 from the originally implied income of $10,700 (implied because it did not account for the $4,290 of “earned income credit”) to $17,626 including a $2,288 wage increase, $4,300 in “earned income credit,” and $338 in “additional child tax credit.” Also, many government aid programs take into account three basic factors which are income for that year, total assets, and number of members in the immediate family. An increase in the minimum wage may or may not impact any of these programs and that information was not mentioned. Finally, we probably all know or have heard of individuals who are living with someone else (who may or may not be earning additional money) who is not being factored into the situation.
The point is this: the whole question of increasing the minimum wage (I did not begin to mention all of the factors including the government’s definition of the poverty line.) is much more complex than the article implies and that the Senator is quoted as understanding it. It is difficult for the general public to reach a valid conclusion unless they have all the information available. My conclusion; that article did more to muddy the facts than to bring them forward for intelligent decision making.
posted by Christian Gunslinger at 11:05 PM
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