Kudos -- 05/01/1996 - MediaNomics

What The Media Tell Americans About Free Enterprise


May 1996

Kudos

What would someone with one foot in the civil rights community and one in the business world think about proposals to raise the minimum wage? Reporter Michael Winsop, in the May 10 New York Times, sought to answer that question. He interviewed Robert Bobbitt, Sr., past president of the board of the Canton, Ohio Urban League and now an owner of four McDonald's franchises in Canton's suburbs.

Winsop explained that "being the boss changed Mr. Bobbitt's politics. Nearly a decade ago he began voting Republican. The Democrat's current push in Washington to raise the minimum wage to $5.15 an hour from $4.25 illustrates why." According to Bobbitt, "Before, I would have thought of the minimum wage as a social issue. Then you start working for yourself, and all the risk and responsibilities are on you."

Winsop told how Bobbitt and another businessman went to see their Congressman. "They explained that 60 percent to 70 percent of their employees were suburban teenagers, many living at home and working to pay for a car and insurance."

In the May 5 Washington Post, staff writer Steven Pearlstein poked holes in the conventional wisdom about falling wages. Pointing to studies showing falling wages, he wrote that "by measuring only cash wages, the median wage series ignores the fact that employees have been receiving a greater share of their compensation in the form of tax-free fringe benefits." According to Pearlstein, "Most economists now agree that the government's main inflation gauge, the consumer price index, overstates the rise in the cost of living. And because income data are adjusted by the CPI, the effect of overstating inflation is to understate income."

Kudos to Winsop and Pearlstein for showing underreported sides of economic stories.

— Rich Noyes