POLITICS FEBRUARY 8, 2011
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By now, it’s easy to be cynical about the Internet’s ability to degrade rational argument. After all, one can only read so many birther blogs without starting to go numb. Still, once in a while, the foggy chaos that is the online world parts, and we catch a glimpse of how the realm’s worst ideas form, adapt to the environment, and, despite their utter lack of fitness anywhere else (well, with the popular exceptions of AM radio and Fox News), thrive in cyberspace.
Perhaps the best recent example is a chart that has been racing around the conservative blogosphere for the last few months. According to its findings, a one-parent family with two children making $14,500 a year has more disposable income than an identical family making $60,000 a year; a family making just $3,625 a year doesn’t quite do as well as the one making $60,000, but it comes close. Those who publish the chart claim it shows that it pays to be poor in America because of government largesse, courtesy of Obama and the Democrats, that the middle class doesn’t have access to.
Problem is, the chart is full of errors. I traced it back to the man who made it, a newspaper publisher in Mississippi, and found that the math, methodology, and logic he used to generate the chart, as well as an op-ed he wrote to accompany it, are wholly unsound. To make matters worse, despite the chart’s cringe-worthy flaws, very few outlets on the Internet, from small-scope blogs to a handful of forums hosted by major national publications, bothered to fact-check it. The story of the chart is a distressing new Exhibit A for those who argue that, practically speaking, there’s no longer any such thing as objective reality in the digital age.
The sentiment that the poor are pampered by “big government” and simply mooch off the system isn’t new. But it took on a heightened resonance recently, as Congress sought to hammer out an agreement on the extension of unemployment benefits—and conservatives jumped at the chance to argue against them. “The truth is the unemployed will spend as little of that money as they possibly can,” Republican Representative John Shadegg of Arizona said on MSNBC. “I’m opposed to giving people money for doing nothing,” Newt Gingrich said in a speech.
Wyatt Emmerich was among those concerned that, with government benefits propping them up, poor people might not have an incentive to work. So the Harvard graduate, who was born into a newspaper-publishing business in Greenwood, Mississippi, and now runs a paper of his own, spent some time this fall playing around with online calculators that, he told me, allow people to determine, by plugging in family size and income, how much in government benefits they are eligible for. Wyatt then published the results he’d found in his newspaper, the Northside Sun. In an October 14 column headlined, “WITH WELFARE IT MAKES SENSE TO WORK LESS,” Wyatt spun out his theory about unemployment and the poor:
People don’t want to work. Especially in the Delta, people just won’t show up on time and often fail drug tests.
“How can this be?” you may ask. You have to work to eat. Well, that’s really not true anymore. In fact, our welfare state rewards not working. You can do as well working one week a month at minimum wage as you can working a $60,000-a-year, full-time, high-stress job. …
A one-parent family of three making $14,500 a year (minimum wage) has more disposable income than a family [of the same size] making $60,000 a year.
To back up this claim, Emmerich provided a chart ostensibly based on the numbers he’d uncovered during his online tinkering:
I sent the chart to the Center on Budget and Policy Priorities, and its researchers replied with a lengthy dossier of the chart’s errors. For starters, Emmerich overestimated the federal tax liability of the $60,000 family by failing to distinguish between gross and taxable income (the $60,000 family only has $40,400 in taxable income, according to the CBPP) and by ignoring the child tax credit, which benefits wealthier families more than poorer ones. The family making $60,000 would actually pay only about $8,043 in payroll and income taxes, not $13,034. As for Medicaid, CBPP pointed out that a family making $14,500 wouldn’t actually be eligible in Mississippi, where the cutoff level of qualifying income for a family of three is a paltry $8,064 per year. Even if that family were eligible, however, Emmerich’s estimate of their benefits is way off. Medicaid is a relative bargain for Mississippi—the state spends, on average, $2,510 a year per adult beneficiary and $1,659 per child beneficiary, according to the most recent numbers.
So how did Emmerich arrive at the inflated $16,500 number? I put the question to him, and he told me that he got it by estimating what it would cost the family to buy private insurance on the open market if they did not have Medicaid, applying his own copays and deductible to the equation. (Although Emmerich lumped CHIP into the same category as Medicaid in his chart, he didn’t consider the two benefits separately in this calculation—which is just as well, since children on Medicaid aren’t eligible for CHIP in the first place.) Even if we accept this dubious methodology, however, Emmerich’s numbers are extreme overestimates. I went to ehealthinsurance.com, a website that provides information on various insurance plans, and got price quotes for a 24-year-old woman with two young kids living near Jackson, Mississippi, where Emmerich’s newspaper is located. The costs were substantially lower than I expected—for less than $500 a month, the woman could cover herself and her kids, pay no coinsurance, and have only a $3,000 deductible. The grand total? Far less than $16,500. But getting roped into analyzing the costs is also problematic, since a mere 6 percent of working adults get health insurance on the private market, according to the Kaiser Family Foundation. An overwhelming majority get employer-sponsored insurance, which, because the government subsidizes it through the tax code, is cheaper: On average, according to Kaiser, Americans who get health care in this way paid just $3,997 for coverage in 2010.
Another big problem with the chart is the Section 8 portion. It probably shouldn’t have been included, given the scarcity of the vouchers and the complicated process required to obtain them. Seven out of 10 eligible families don’t receive Section 8 benefits, according to CBPP. But, even if the families in the chart were lucky enough to receive the vouchers, Emmerich botched this calculation by basing it on a percentage of each family’s income. This is not how Section 8 subsidies are determined; rather, eligibility and the subsidy amount are based on factors like family assets, the unit in question’s rental price, and the median income in a given county. In other words, Emmerich simply couldn’t have determined this amount with such limited information. (When I asked Emmerich to direct me to the online calculators, including the one for Section 8, that he had allegedly used to make the chart, he told me he didn’t know where they were because his browser history had expired. His column mentioned “[o]ne Web site … GovBenefits.org … [that] gave me a list of dozens of additional programs and private grants available to low-income family providers.” But plugging in that URL reveals that GovBenefits.org is a placeholder site with links to “Online College” and “Free Money.”)
Perhaps more frustrating than the chart’s numerical errors is the language that accompanies it. In the column he penned for his newspaper, Emmerich’s claimed that the family making $14,500 has more “disposable income” than the family making $60,000, a reference to the “total” numbers at the bottom of the chart. But the chart conflates disposable income with economic benefits. Some items on the chart, like the tax credit, are disposable income, unrestricted money the families can use as they please. But other items, like food stamps, are government benefits that must be used for specific purposes. Adding these two types of items together is like adding apples and oranges.
When I asked Emmerich about his decision to use “disposable income” in his column to describe the totals in his chart, he quickly acknowledged that “‘economic benefit’ … is the more precise term.” But this error had already done its damage: As Emmerich’s chart and column gained momentum around the Internet, people continued to refer to its totals as “disposable income.” Then, like Emmerich, they used this descriptor to take an absurd leap of logic, asserting that, with money in their pockets, poor people have no incentive to hold jobs.
If Emmerich did not have a particularly clear sense of his methodology, he was sure of his logic: that his numbers prove government benefits are discouraging the poor from working. What’s more, he was sure the numbers he’d uncovered (or concocted, depending on how you look at it) would have an impact. “I thought, ‘You know, I bet if I send this out on my e-mail chain, I bet this thing could get circulated,’” he told me, referring to an e-listserv he’s on that regularly sends out links.
Emmerich’s instinct was right. After about a month, his chart landed in a forum on Sean Hannity’s website. (“It demonstrates very nicely why productivity should never be taxed,” opined one poster. “And as a side demo, subsidy for sloth is another bad plan.”) It was also picked up by Yahoo! News via The Atlantic Wire. Countless other sites soon joined the list. And, somewhere along the way, the chart became credited to “Source: Wyatt Emmerich, theclevelandcurrent.com”—meaning even the citation got botched.
A major node in this great game of Internet telephone was the conservative blog Zero Hedge, where, on November 21, poster “Tyler Durden” noted:
Emmerich analyzes disposable income and economic benefits among several key income classes and comes to the stunning (and verifiable) conclusion that “a one-parent family of three making $14,500 a year (minimum wage) has more disposable income than a family making $60,000 a year.” … Ever wonder why Obama was so focused on health reform? It is so those who have no interest or ability in working, make as much as representatives of America’s once exalted, and now merely endangered, middle class.
From Zero Hedge, the chart ascended to one of the highest points on the right-wing totem pole: The Corner. Veronique de Rugy posted the chart on this well-read National Review blog on December 10, around the time that President Obama was in the final stages of hammering out a tax deal that would include cuts on high earners. “Maybe President Obama and Mr. Krugman should direct some of their attention to this problem,” snarked de Rugy, “rather than spending so much of their time complaining that the rich don’t get soaked enough.” In other words, she took Emmerich’s chart at face value.
Granted, The Corner doesn’t always comport itself in an impressive manner, but it’s still a blog for a major national publication. One would hope such a forum would check the numbers that supposedly back up a claim as provocative as Emmerich’s. And The Corner wasn’t the only website that disseminated Emmerich’s chart to a broader audience: The post on The Atlantic Wire (which was later mirrored by Yahoo! News) conveyed some skepticism about the chart and eventually linked to a handful of rebuttals, but the author of the post clearly didn’t look into the chart’s veracity for himself before publishing it. Instead, by posting the chart largely unchallenged, the blog implied that it might hold some relevance and legitimacy.
Indeed, the real story here isn’t necessarily Emmerich’s fuzzy math; as important is the fact that the chart was posted again and again with so little discussion of its accuracy. If those who pushed the chart along in its Internet journey cared about its content and the methodology, rather than its underlying political message, they could have done a little Googling. It wouldn’t have taken much to crack the surface, get below the presumption that poor people are coddled by the government, and find the beginning of a long list of problems with Emmerich’s work. But, perhaps because of ideological bent or maybe due to simple laziness, people decided that no fact-checking was required.
Emmerich, it turns out, was partially right. In Obama’s America, there are people who have little incentive to work: Internet pundits, particularly conservative ones—and especially those who think poor people are a threat to America.
Jesse Singal writes for The Boston Globe’s opinion pages. He can be reached at jsingal@globe.com. Alexander C. Hart, a reporter-researcher for The New Republic, contributed research to this article.
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25 comments
Good journalism. Funny conclusion. Like Lewis Lapham said, "People who think money is good for the rich and bad for the poor."
- Nusholtz
February 8, 2011 at 8:14am
Jesus' admonition to provide for the least among us notwithstanding, it's human nature to believe that "others" are gaming the system and freeloading on the hard work of people like you and me. "Others" not like you and me. African Americans, Hispanics, single-parents, all those "others". Of course, Emmerich and his enablers could have turned the chart upside-down and compared the benefits derived by the affluent as compared to the middle class. Benefits such as lower marginal federal tax rates (in some cases much lower rates), appreciably higher mortgage interest deductions, mortgage interest deductions on second homes, tax-free Cadillac health care plan benefits including generous dental benefits, higher quality public schools and other public services provided in counties and districts where only the affluent can afford to reside. But the affluent, being like us, aren't gaming the system but reaping the benefits they, like us, deserve because of their hard work. Unlike the "others" who are freeloaders.
- rayward
February 8, 2011 at 8:18am
So the lying teabaggers (that's like saying "tooth dentist") say it makes more sense to give up your $60k job and get all of these government goodies. So here's the offer to the liars: do it. See how well it works out and then come back to tell us how you were right. We all know the answer: they're lying and won't try it because deep down they know it's a lie.
- tnmats
February 8, 2011 at 8:53am
It's remarkable how quickly made-up facts that fit a pre-conceived notion get promoted to "common knowledge" in the blogosphere. Good catch in tracking this one down. I strongly fear that "Disposable Income" will become the new "Welfare Mother" or "Anchor Baby" phrase, despite your excellent debunking.
- AllanL5
February 8, 2011 at 9:18am
I heartily encourage Emmerich and de Rugy and co. to quit their jobs (please) and live off welfare.
- frippo
February 8, 2011 at 9:22am
Very interesting article, but I wonder if Singal ever determined what conclusions an accurate set of numbers would lead to.
- hsny
February 8, 2011 at 9:36am
The reason for concocting this chart is the same reason conservatives have for doing many of these things--they must make the middle class despise and resent the poor, because if they don't, the middle class may realize how much closer their lot is to that of the poor that it is to that of the rich. If the middle class and poor band together to elect and support measures that improve their wellbeing at the expense of the rich, we would have income distributions that were much less distorted, and that is NOT OKAY with rich. Hence, the constant efforts to pit the rest of against each other. It works, too!
- ReganaD
February 8, 2011 at 11:19am
First, page 2 doesn't link to page 3 so most readers will think the article ends after page 2. Page 2 is full of typos. And while the author refers several times to the inaccurate math of the chart, they never actually address that in any specific way. I am sympathetic to the idea that the chart is false, but don't write an article asserting that without at least a few examples. Please start over and try this one again.
- lbevans@earthlink.net-old
February 8, 2011 at 11:50am
lbevans....what article did you read? The 2nd page does link to the 3rd page and the 2nd page has several citations of where the numbers are refuted in the graph. So I'm not sure what you imply by saying you're "sympathetic to the idea that the chart is false" and then claim there are no examples of numbers that refute the chart errors. Please start over and re-read this one again.
- singlspeed
February 8, 2011 at 12:04pm
The most bizarre claim is that people who are WORKING at a minimum wage job, which invariably sucks, are somehow not working because they don't get paid much. It is called the Earned Income Tax credit and is based on the fact that the minimum wage is a disgrace with asshole Republicans not wanting to pay a decent wage. As was pointed out let these assholes work a minimum wage job themselves and see how long they last.
- blackton
February 8, 2011 at 12:30pm
Conservatives are people who look at all the primo parking reserved for the handicapped and mutter to themselves about how unjust it is that they have to park so far away from the front door while the handicapped get all the breaks.
- Geoff G
February 8, 2011 at 2:35pm
What Blackton said. PS sheese. These geniuses obviously haven't worked at minimum or lower wage jobs have they or they wouldn't come up with this total baloney, which has attached The Morality of Wealth besides: if you are poor you DESERVE it (similarly, those of us with money are obviously virtuous and DESERVE it) and oh ps your backbreaking working-poor type job isn't "productive" so YOU are not "productive" unlike us well to do capitalists who can sit on our bums and make a fortune from the labor of others - now THAT is productive and SHOULD be rewarded. Right? It kills me when I hear things like "the productive classes" or "the most productive people." Uh huh. Who's REALLY productive are people now doing the work of 4 or 5 people - getting sick in the process - it's just wrong. But who cares about them anyway? they are replaceable! Just ask any overworked secretary or produce clerk! Who are doing so much better on their little salaries than a poor manager making twice or three or four times the salary! RIGHT. Sure they are. Just look at the fine houses a Walmart clerk can afford! Right? Better yet - speaking of "productive people," let THAT money earn interest on interest - THIS is productive whereas working your buns off for a low end insecure job which may not even have benefits is not productive - clearly! - because otherwise you would be WEALTHY as befits a PRODUCTIVE person - on the other hand, obviously people with large portfolios which maybe they inherited are "productive" and deserve to be wealthy right? Unlike you "other" guys. Gah. This is spilling over into the anti-immigration debate too - Send All Those Anchor Babies Home And Save Our (backbreaking minimum wage jobs that we poor persecuted Euro-Christian white guys wouldn't be caught dead doing in the first place.) Gah.
- Sophia
February 8, 2011 at 2:49pm
Well, I'll repeat the question Mickey Kaus just tweeted about this article: so what are the REAL numbers for the chart? I wondered about that when I first read this article this morning. Lots of snarking here about the baloney-ness of the chart, but no effort to provide a correct chart or explain a better approach.
- rriley
February 8, 2011 at 3:28pm
It's bad enough that people's BS detectors are so abysmally low. But one should expect more from pundits who have significant readerships. When an assertion seems improbable on its face, it should trigger at least a modest concern about accuracy. Sure, some things that are improbable turn out to be true, but wouldn't it make sense to check first? And it isn't like this isn't the first time bad information has made the rounds. There was the $200,000,000 a day figure for Obama's India trip floated around and repeated by people who should have known better, especially since that figure is absurd on its face. Nor is it restricted to the right, though it may be more prominent on that side; I recall getting an email about the books Palin supposedly asked to be barred from the local library which looked an awful lot like a standard banned books list to me. About one minute of research showed that it would have been hard to ban books that hadn't yet been published at the time. In this case, if there were no economic incentives to earn more than $14,500, then no one would do it--and yet there are plenty of people making $60k. The fact that few people earning $60k are abandoning their jobs for the equivalent of minimum wage should generate at least a little skepticism. That so few people are willing to ask such basic questions when faced with such improbable assertions says a lot about the power of ideology over concern for facts. rriley: the point isn't really what the correct numbers are. The point is that the chart got such wide circulation without many people asking what the correct numbers are. As the author wrote, it shows that people failed to fact-check, either out of laziness or because it confirmed what they wanted to believe anyway.
- dsimon
February 8, 2011 at 4:10pm
People do not want to admit a few simple facts: 1. $60,000 = better than minimum wage PERIOD 2. Minimum wage/other low paying jobs often are harder and more stressful than jobs that pay more. 3. Being poor totally sucks. 4. Example: when you go to get credit, ie to buy a house, they look at your total income not your "disposable income." Duh. Finally - yeah - if being poor is so awesome why aren't the well-to-do rushing to join our ranks? Most worrisome though - the idea that being poor = being "lazy" or otherwise morally corrupt. PLEASE.
- Sophia
February 8, 2011 at 4:39pm
Mistakes always made in one direction are not mistakes, but rather evidence of dishonesty. This chart is dishonest, not just inaccurate. rriley asks for what the correct numbers, but for the most part you could figure that out from the text, at least for the $14.5k and $60k columns. The total for the $14.5k column would be about $20,000, and for the $60k column about $40,000. (This is from memory, to do it more carefully I would print out the post and apply the corrections.) The other question not addressed here is what it costs to house and feed a family of 3 in Mississippi (basic survival). I'm guessing it would be $15,000 per year or thereabouts for basic survival, assuming you didn't need a car, which you might note is pretty darn close to the real total for the poor working family. All of which makes it pretty clear why we are not all rushing out to get minimum wage jobs so we can live the easy life.
- JEFF FREY
February 8, 2011 at 10:30pm
seattleeng made this very claim in a recent discussion, yet again, about US tax rates. I ridiculed as stuff he gets from the right-wing echo chamber on the internet, without knowing its specific origins. Now I know its specific origins. Thanks for a great peace of research.
- roidubouloi
February 8, 2011 at 11:52pm
"It demonstrates very nicely why productivity should never be taxed ..." Untax the employed and tax the unemployed, is my motto. People on welfare should be forced to pay into the system, while the product John Galts should be relieved of their tax burdens.
- icarusr
February 9, 2011 at 2:04am
While Emmerich may have used "back of the envelope" calculations, his points are still valid. Welfare benefits received by lower-income families are not considered when determining how much disposable income they have, yet they should be. Economist Laurence Kotlikoff has written about the high marginal tax rates low-income families face when they earn extra income, due to the loss of benefits. See the NCPA study here.
- richard2w
February 9, 2011 at 9:29am
Nice try, richardw. Your claim that Emmerich used "back of the envelope" calculations is insulting to back of the envelope calculations. He used dishonest calculations -- all of his "errors" were in the same direction. He also used a blatantly wrong definition of disposable income. Even if 10% of a fradulent argument might be correct, it's still a fraud. Redo the charts honestly and correctly, and then make an honest argument.
- JEFF FREY
February 9, 2011 at 11:57am
Roid writes: "seattleeng made this very claim in a recent discussion, yet again, about US tax rates." Which point was that? I've always claimed our middle class tax rates are very low. There is a reason the author of this piece didn't re-tally the numbers. Because they are still very scary close. How about it Jesse....now that you've given this a good scrubbing, show us the numbers. I just ran them based on your adjustments and...man...
- seattleeng
February 9, 2011 at 6:02pm
Sophia writes: "$60,000 = better than minimum wage PERIOD" Yeah, and minimum wage is better than a farmer's salary in African. And looking like Brad Pitt is better than looking like me. And even a crappy Ford that works is better than a bike with a flat tire. But you are missing the larger point: If someone can get a degree, and get stuck in a bad middle management job, and really make not much more than someone who works at an ACE hardware store, then the incentive to go to college is diminished. And the incentive to become a doctor is diminished even further. And on and on. that is the worry here. If you make the pay delta between jobs that require little qualification and lots of qualification very small, then society stops moving forward. Nobody will invest the time and money needed to do the jobs that require more qualification. How many doctors would we have if medical school cost $100K and it paid $60K per year? Not many.
- seattleeng
February 9, 2011 at 6:06pm
That is a great argument - about the delta in pay differentials. It leads to the question: What is responsible for it? Is the money from a "bad middle management job" low because it's been drained away by entitlements to low-income people? Or has it been drained away by entitlements to the highest-income people? And how would you know?
- art.kleiner@booz.com-old1
February 10, 2011 at 5:18am
Seattle - by all means, please post your revised numbers rather than throwing red herrings into the situation. People will College degrees only ending up as Managers as ACE? Doctors paid $60K? Comparing US minimum wage with an African farmer? What? Where did that any of that come from? And what does it have to do with the point of the article? If someone has to make up numbers to make their point, they probably don't have one.
- Nari224
February 10, 2011 at 2:25pm
seattleeng: "If you make the pay delta between jobs that require little qualification and lots of qualification very small, then society stops moving forward. Nobody will invest the time and money needed to do the jobs that require more qualification." True. But where is the evidence that that's what's going on? As I wrote above, if there was really no advantage to working a $60k job over a $14.5k job, and the $60k job required more "qualification" if not more work, why would anyone do it? Or just do the $60k job half-time? And yet I don't see very many people scrapping their $60k jobs for lower income jobs. Shouldn't that be prima facie evidence that the numbers are off? As for doctors, they don't get paid $60k, and even if they did some people might still choose to become doctors. After all, starting teacher salaries aren't $60k, and yet people still join the profession (though not as high quality as I would like, which I think is due in part to the pay). There's more to a job than just the salary--such as working conditions, the sense of satisfaction, etc. Doctors elsewhere get paid less than they do here and yet deliver fine service according to outcome measurements (though many of them also have no debt when they get out of school...something to consider...).
- dsimon
February 10, 2011 at 7:59pm