Great Myths and Misleading Information fed to you by politicians

I know what is best, trust me
People are greatly influenced by propaganda, especially when it fits nicely into their well-established perceptions. Politicians are masters of using such information especially the political left which tends to sound more sympathetic and concerned.

Here are a few examples. While there are real issues and concerns with each of the following, they are presented in a very misleading light for political purposes only, not to focus on the real problems.

You can decide what’s meaningful or not, but consider the more complete story.

Wasting time on misleading information does nothing but keep us from solving real problems.

The minimum wage must increase to $15.00 an hour to help middle class families. 

Fact is if you adjust the current minimum for inflation using various starting points of past minimums, you get about $9.25-$11.25 as justified with no other criteria. In addition, the claim about helping working families is misleading because very few families or heads of households earn the minimum wage. In addition, a very small percentage of the workforce earns the minimum wage. Also, the consequences of a $15.00 minimum in the short-term (rising prices, lost eligibility for current entitlements, higher taxes on earnings and overall pay compression) are largely ignored.

According to the BLS.

Age. Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the federal minimum wage or less. Among employed teenagers (ages 16 to 19) paid by the hour, about 11 percent earned the minimum wage or less, compared with about 2 percent of workers age 25 and older.

Gender. Among workers who were paid hourly rates in 2015, about 4 percent of women and about 3 percent of men had wages at or below the prevailing federal minimum.

Race and Hispanic or Latino ethnicity. The major race and ethnicity groups had similar percentages of hourly workers paid wages at or below the federal minimum. About 3 percent of White, Asian, and Hispanic or Latino workers earned the federal minimum wage or less. Among Black workers, the percentage was about 4 percent.

Education. Among hourly paid workers age 16 and older, about 6 percent of those without a high school diploma earned the federal minimum wage or less, compared with about 3 percent of those who had a high school diploma (with no college), 3 percent of those with some college or an associate degree, and about 2 percent of college graduates.

Marital status. Of those paid an hourly wage, never-married workers, who tend to be young, were more likely (5 percent) than married workers (2 percent) to earn the federal minimum wage or less.

Full- and part-time status. About 7 percent of part-time workers (those who usually work fewer than 35 hours per week) were paid at or below the federal minimum wage, compared with about 2 percent of full-time workers.

Occupation. Among major occupational groups, the highest percentage of hourly paid workers earning at or below the federal minimum wage was in service occupations, at about 9 percent. Almost two-thirds of workers earning the minimum wage or less in 2015 were employed in service occupations, mostly in food preparation and serving related jobs.

CEOs are the cause of inequality and are paid tens of millions of dollars. 

Yup, there are some CEOs out there who earn tens of millions in total compensation. In fact, there are less than 500 of them, the largest companies in the US. The headlines typically fail to mention they are talking about the S&P 500. Here’s the full story:

According to Chief Executive Officers in the United States can expect to earn a very comfortable salary, with average salaries (in the ballpark of $163K) surpassing six figures annually. Cash earnings for Chief Executive Officers — including $146K in bonuses and $118K in profit sharing proceeds near the top of the pay scale — generally stretch from $75K to $409K depending on individual performance. This group’s pay is mainly influenced by the particular firm, followed by career length and location.

In addition, those tens of millions represent total compensation, not cash which is the smallest percentage. Most of the rest of the “pay” is deferred pension compensation or various stock awards the value of which is at risk. For example, when I retired part of my pension was considered deferred compensation and I was required to pay Medicare tax on the full current value even though I may never collect it. That amount was seven times my actual salary. If I had been a senior officer that amount would be reported as compensation. 

By using the total compensation standard as pay, public employees are way overpaid and their compensation costs more directly impacts working Americans than any CEO.

Women earn 79% of what men earn. 

Okay, on a macro basis that’s true. But that is a small part of a long-term complex issue affecting women. The claim implies current day outright discrimination in pay despite scores of long existing federal and state laws making such a practice illegal. The reality is that length of time in the workforce, type of job held, and other factors over time are the cause of that accumulated difference in pay. A man and a woman doing the same job and all other factors being equal but the woman is paid 79% of the man, if you can find it, is a real problem, but you would never know that from the propaganda. If five women are doing the same job and one is achieving exceptional results, are the other four entitled to equal pay? Is that our goal?

Social Security is actually running a surplus. 

This is a clear case of creative accounting and intentionally misleading. The Social Security Trust will be out of money if things don’t change by 2035 and only about 77% of earned benefits will be paid at that point. If you want to consider that interest payments on the Trust bonds today are surplus because it helps pay benefits, be my guest, but it doesn’t change the status of the trust one bit and shortly those bonds will start to be redeemed.  The trust has not run a true surplus (incoming taxes exceeding paid benefits) since 2010. This kind of propaganda prevents us from seeking honest solutions which logically should include higher payroll taxes nobody wants to talk about.

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