Welcome to Mythbusting, where I don’t just tell the myths, I put them to the test. Um…actually….no, I’m pretty much am just going to tell you the myths and then why I think they are wrong. Hmm, now that I see it in writing, I understand why Discovery picked up Adam and Jamie’s show instead of mine. Anyway, on today’s show:
- Myth #1 – Raising the minimum wage is going to make my Big Mac cost a whole lot more money…like $10 or something! The first thing to know is that labor costs only make up the fraction of the costs of making a burger (maybe like 25%). Further, not all the labor is at minimum wage, so not everyone is getting an increase and not everyone is getting an increase from the current minimum wage. So it’s not like if you raise the minimum wage to $15, the cost of the Big Mac would double. You have different calculations out there, but let’s say maybe the cost of Big Mac’s would go up 70 cents or so.BUT, that’s the COST. Would the PRICE go up though? McDonald is in a very competitive market. And in an effort to maximize profits, they should ALREADY charge as much as they think they can get away with to maximize revenue. After all, they are not a charity. That doesn’t have anything to do with labor costs. So there’s a good possibility that the price of a Big Mac doesn’t go up at all, at least not in direct relation to minimum wage increases. Busted.
- Myth #2 – Half the people in this country do not pay taxes at all. First, anyone who says this is probably being purposely misleading. What they are not saying is that they are only referring to the FEDERAL INCOME tax. As we know, there are many, many, more kinds of taxes than that. Once you throw in things like payroll taxes, state taxes, local taxes, etc, then the reality is that the saying that the only certain things in life are death and taxes is still very truthy. Making a claim that half the people don’t pay taxes using just federal income taxes is like claiming 99.5% of people don’t pay taxes, using the federal estate tax as your basis.Further, the percent who don’t pay federal income taxes isn’t static. Factors like the economy and legislation change that percentage. Even further, it’s not the SAME people not paying federal income tax year after year. Chances are good that over your lifetime, you are going to pay federal income taxes. Sorry, no freebies. Busted.
- Myth #3 – We could balance the federal budget if we just stopped giving money to other countries. Oh, and also those filthy hippies at NPR and Sesame Street. The budget deficit for fiscal year 2014 was about $483 billion. Foreign aid expenditures was roughly $50 billion in total. Public television and radio? Around $450 million. In other words, you could cut both these to absolute $0, and you still have a long long way to go before you reach the balance. So if you want to cut these things because you think the money should stay at home (though I’m betting since we are already in deficit spending, it’s not an either/or situation) or because you hate Big Bird, go ahead. But not because you just want to balance the budget. Busted.
- Myth #4 – People on food stamps are lazy no good fraudsters! – First, while fraud isn’t non-existent, it is less than one percent. Also, 80 percent are working within 12 months before or after receiving food stamps. And the average length of time anyone is on food stamps is 8 to 10 months. So the reality is, the folks on food stamps are generally working class Americans who utilize a safety net only for as long as they have to. Busted.
So that’s it for today. Oh alright, here’s one big boom.