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What The Media Tell Americans About Free Enterprise

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April 1996


Issue Analysis: Network Reporting a Slave to Wages
Income Stories Ignore Total Compensation

Last month, MediaNomics reported that there were 19 stories about layoffs during the first two months of 1996, but only two stories about job growth. We noted how such a focus on the negative offered a distorted picture of the true nature of a competitive economy, which does destroy some jobs, but always creates more jobs.

The sister issue to job creation is living standards. A competitive economy would be of little benefit to workers if it caused their standard of living to decrease. Media Research Center analysts reviewed every story that focused on wages and incomes on network morning and evening shows during the first three months of 1996. Ten of the 11 stories stressed the alleged wage stagnation of average workers over the last few decades. Only one story pointed out that opportunities have been increasing. No story pointed out that when benefits and payroll taxes are included, workers' total compensation has been steadily increasing.

A lack of diversity in guest selection kept the morning shows from giving viewers a balanced story. For instance, on the March 12 Today, Bryant Gumbel interviewed only Jared Bernstein of the liberal Economic Policy Institute. Introducing the segment, Gumbel pointed out that the U.S. economy has created eight million new jobs over the last three years, adding that "the quantity of jobs is not being questioned, but the quality is."

Bernstein then said that "wages and compensation have been falling in our labor market since 1979 for most workers. yet in the current economy, profit rates, or corporate profits, are at a 30-year high." Bernstein also claimed that "this is a long-term trend and workers are experiencing falling wages and compensation and even increased turnover. That is, we have less stable employment and the typical American family is really running faster just to stay in place."

Gumbel's reaction: "OK, so let us accept all of that as fact. Could it be otherwise?" Since Gumbel didn't provide an alternative opinion, viewers had no choice but to accept Bernstein's assertions as fact.

Other reporters also seemed to assume that accounts of workers' falling wages was a fact. On the February 26 CBS Evening News, Dan Rather concluded that "the fear and anger of some American workers over layoffs and barely rising wages have emerged as a campaign issue." Earlier, on the February 22 CBS Evening News, Rather said: "Millions of American workers know it. Despite soaring profits and a record Wall Street, U.S. businesses are still cutting good jobs and barely raising wages."

On that same broadcast, correspondent Wyatt Andrews portrayed "an increasingly anxious middle class, whose dreams of upward mobility have met a downward reality." According to NBC's Mike Jensen, on the March 4 Nightly News, "William Young of California is typical -- 50, a victim of downsizing, laid off by Northrup after 29 years in the aerospace industry."

On the February 25 World News Sunday, ABC's Jeff Greenfield, normally one of the most balanced reporters at the networks, also bought the party line. He reported "something very disturbing behind the record Wall Street numbers and corporate profits." He interviewed a Wall Street economist who said, "This surge in financial markets was really based on an untenable situation of workers taking a real squeeze in living standards to improve corporate profit margins and competitive prowess." Greenfield called this the "dark side of productivity."

But just how dark is the American wage and income picture? According to Federal Reserve Bank of Dallas economists W. Michael Cox and Beverly J. Fox, writing in a January National Center for Policy Analysis Policy Backgrounder, it's not as bad as many have been led to believe. The problem with most analyses of stagnating wages is they don't look at benefits. Cox and Fox pointed out that "employee benefits have grown from 20 percent of payroll in 1953 to more than 41 percent today." Since benefits aren't taxed, they argue, employees have sought benefit increases. Increasing payroll taxes have also taken a bite out of wages.

Cox and Fox also maintain that looking at stagnating household income, as Bernstein apparently was, is misleading. "Today's households are nearly 15 percent smaller than they were in the 1970s -- so household income is spread over fewer people," they report. "The median family income statistics for yesterday's Brady Bunch cannot be accurately compared with those of today's Murphy Brown." Overall, Cox and Fox demonstrate that "per capita real personal income increased an average of 1.4 percent a year" from 1974 through 1993. Unfortunately neither they nor like-minded economists were interviewed by network reporters.

Only NBC's Jim Avila, on the March 4 Nightly News, gave any hint that the job and wage picture for American workers was not completely bleak. Though he didn't point out that total compensation has been increasing for American workers over the last few decades, he did look at small businesses creating jobs and noted that "many of the new jobs being created provide good salaries, full benefits, and something some of the old jobs did not provide -- a piece of the action. Often small companies offer new employees stock options and other incentives." According to Avila, "The workplace has changed, perhaps forever. The job security of the past replaced by uncertainty and, more often than you might think, also replaced by new opportunity." But, of course, Avila was the exception.


Rich Noyes


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