By Doug Porter
Sometime over the next couple of months the San Diego City Council will consider a ballot measure for November raising the minimum wage. Although California has already enacted legislation boosting the minimum wage from $8 an hour to $9 next July and $10 by January 2016, research by the Center on Policy Initiatives indicates those raises fall way short of the $13 per hour wage necessary to live here without government assistance.
Raising the minimum wage polls well with the public. Just last week a limited advisory referendum urging the Chicago City council to raise the minimum wage to $15 an hour (for corporations with over $50 million in annual sales) passed with an overwhelming 87% approval. Nationally a variety of surveys indicate two thirds of voters favor increasing the mandated minimums.
Today we’ll take a look at how business interests both nationally and locally are working to defeat increases in pay for low wage workers. Given that a significant number of San Diegans were naive enough to believe that the US Navy was preparing to leave town (the Barrio Logan referendum), the downtown clowns who perpetrated that falsehood can be expected to roll out the mother of all shock and awe campaigns as fall approaches.
The Fear Factor
Wikimedia.org
At the heart of any good propaganda campaign is the creation of fear and doubt when challenging popular beliefs. Here in San Diego the fear part will most likely placed in the capable hands of former Mayor Jerry Sanders, who currently heads the Chamber of Commerce.
As the fall elections approach, we’ll be fed an increasing number of “news” stories about businesses that will either close or leave San Diego should any increase in the minimum wage occur.
Given that the hospitality industry funds much of the opposition to any improvements for working people, my bet is that we’ll see a high profile restaurant company promising to make their employees suffer instead of paying them a decent wage. And if they can find a place popular with with seniors or some other camera ready constituency they’ll get a real bang for their buck.
The chances are good to excellent that whatever company gets the honor of falling on its sword for the cause, will already be in financial trouble. But I’m certain that back story won’t get noticed by the media until after the fact.
The Doubt Factor
Joseph Sabia via KPBS
Our local Ebenezer Scrooge fan club is lucky to have one of the big names in Doubt Creation right here at in town: Meet Joseph Sabia, newly ensconced (August 2013) as Associate Professor of economics at San Diego State University.
He’s already been tapped for an appearance on KPBS’ Midday Edition, has been quoted in various local newscasts and will be undoubtedly be the voice of authority for future media coverage. He’s the author of seven published reports over the past decade examining various impacts of minimum wage.
You’ll also undoubtedly see Michael Saltsman, Economic Research Director for the Employment Policies Institute, an earnest young man, who’s trotted out in front of TV cameras to refute claims that minimum wage increases haven’t had the promised negative impacts.
The Employment Policies Institute just happens to have published SDSU’s Joseph Sabia’s studies on minimum wage, with titles like “Raising the Minimum Wage: Another Empty Promise for the Working Poor.”
“Just who is behind the Employment Policies Institute?’ you might ask.
From the New York Times:
The Employment Policies Institute, founded two decades ago, is led by the advertising and public relations executive Richard B. Berman, who has made millions of dollars in Washington by taking up the causes of corporate America. He has repeatedly created official-sounding nonprofit groups like the Center for Consumer Freedom that have challenged limits like the ban on indoor smoking and the push to restrict calorie counts in fast foods…
…The sign at the entrance is for Berman and Company, as the Employment Policies Institute has no employees of its own. Mr. Berman’s for-profit advertising firm, instead, “bills” the nonprofit institute for the services his employees provide to the institute. This arrangement effectively means that the nonprofit is a moneymaking venture for Mr. Berman, whose advertising firm was paid $1.1 million by the institute in 2012, according to its tax returns, or 44 percent of its total budget, with most of the rest of the money used to buy advertisements…
The Front Groups
Charity Navigator, an independent authority on charitable giving, has issued donor advisories against five Berman front groups:
- Center for Consumer Freedom
- Employment Policies Institute
- American Beverage Institute
- Center for Union Facts
- Enterprise Freedom Action Committee
Charity Navigator notes that, unlike most charities, Berman’s groups funnel significant amounts of their funds to a single company, Berman’s for-profit Berman and Company, Inc.
Michael Saltsman
The New York Times also explored Mr. Saltsman’s and Mr. Sabia’s relationship with Berman’s group:
Mr. Saltsman, 30, who has an undergraduate degree in economics from the University of Michigan and previously worked for the federal Bureau of Labor Statistics, drafts dozens of letters to the editor and opinion articles for newspapers, arguing that increasing the minimum wage would hurt more than help. Other special institute projects included a recent survey of lawmakers who support the minimum wage increase asking if they pay their interns — a report The Daily Caller, a conservative online publication, then released, calling out the lawmakers with unpaid interns as hypocrites.
The major reports released by the institute are prepared by outside academics, like Joseph J. Sabia, an associate professor of economics at San Diego State University, who has collected at least $180,000 in grant money from Mr. Berman’s group over the last eight years to deliver seven separate reports, each one concluding that increasing the minimum wage has caused more harm than good — or at least no significant benefit for the poor.
Where Does the Money Come From?
An article in the Boston Globe describes Berman’s enterprises as “a case study of what critics say is an industry of distortion in Washington.”
EPI is described by Nation’s Restaurant News as a “research organization funded by restaurants, retailers and manufacturers.” Some of their other research efforts have included disseminating information opposing employer Health Care for Restaurant employees
He started out the Guest Choice Network in 1995 with at least $600,000 from Big Tobacco’s Philip Morris to fight smoking-related legislation. According to Philip Morris documents obtained via a lawsuit settlement, Berman has received at least $2,950,000 from the company.
According to Berman Exposed a web site created by Citizens for Ethics and Responsibilities in Washington (CREW),
- GCN attacked Mothers Against Drunk Driving, calling MADD a group of “professional fund-raisers” who try to “scare us away from even responsible drinking.”
- GCN characterized former New York Mayor Rudy Giuliani’s proposal to confiscate the vehicles of people convicted for drunk driving as a “car-theft ring.”
- GCN criticized the U.S. Centers for Disease Control and Prevention (CDC) for its warnings about salmonella-related food poisoning, stating “For nearly three decades, [CDC] has been whipping up fear over food while remaining virtually unchallenged by the press or the scientific community. By generating more heat than light, [CDC] helps create fear . . . over . . . food products.”
- In an editorial appearing on Center for Consumer Freedom’s website, Berman referred to a “lack of evidence that second-hand smoke causes cancer.”
GCN is now repackaged as the Center for Consumer Freedom, whose known donors include Coca-Cola, Wendy’s, Tyson’s Foods, Cargill, and Outback Steakhouse.
The Al Capone Method of Persuation
Perhaps Mr. Berman’s most notorious public battle concerned his full-frontal attack on the Humane Society of the United States.
The Boston Globe story quotes the HSUS president Wayne Pacelle as saying Berman was hired by corporate interests such as agri-business and restaurant chains that don’t like the way the Humane Society has influenced food- and agricultural-related legislation in Congress and state legislatures.
Pacelle was featured in an ad that compared him to Bernie Madoff, implying HSUS was misusing donor funding. The Better Business Bureau cried foul over the claim.
Via CREW:
In a meeting with the Wise Giving Alliance, a transcript of which was given to the Boston Globe, Mr. Berman said BBB would “become collateral damage” in his campaign to tar the HSUS on behalf of the “big companies” for whom he is working. It shouldn’t be surprising that Mr. Berman relied on such a mob-like tactic. In another instance, he once told the Nebraska Farm Bureau, “We can use fear and anger — it stays with people longer than love and sympathy.”
According to the Las Vegas Sun, at a 2007 conference during which he announced his plans to go after teachers unions nationwide, Mr. Berman favorably quoted infamous mobster Al Capone: “You can get further with a kind word and a gun than you can with just a kind word.”
That wasn’t the only time Mr. Berman approvingly quoted Capone. In November 2012, Mr. Bermanspoke at the Minnesota Agri-Growth Council’s annual meeting, telling the food and agriculture industry representatives they needed to attack animal welfare activists on a personal level. “We should attack their credibility using ridicule and humor not for what they’ve said but for who they are,” Mr. Berman declared. The Minnesota Agri-Growth Council posted a PowerPoint presentation prepared by Mr. Berman on SlideShare.net, though it has since been removed. One of the slides featured Mr. Berman’s favorite Al Capone quote.
Dare to Be Fat
In case you aren’t sold on just what a bad guy operation Berman’s front companies are, here’s one last tidbit, via Berman Exposed:
CCF launched 2005 ad campaign challenging “myth” of obesity crisis. CCF purchased ad space in Washington DC’s Metro rail during the summer of 2005 and ran ads charging that the obesity epidemic in the United States is a myth propagated by the “food police.”
Back to the Minimum Wage
SDSU Associate Professor Sabia told the NY Times that his research conclusions were developed independently and asserted they were peer reviewed.
Saul D. Hoffman, a professor of economics at University of Delaware, examined the employment data Mr. Sabia used for a 2012 paper funded in part by the institute. Mr. Hoffman concluded that the narrow cut of data Mr. Sabia picked was perhaps unintentionally skewed, and once corrected, it would have showed that the 2004 increase in New York State’s minimum wage had no negative impact on employment — the opposite of the conclusion the institute had proclaimed in its news releases.
NBC/BayArea ran a story recently examining the impact of last year’s increase of the minimum wage in San Jose.
Here’s what we found:
- According the San Jose Downtown Association, registered businesses were up 3 percent from 2012 to 2013, but a healthy 19 percent in the retail sector, which includes restaurants
- The City of San Jose reported 75,000 businesses registered at the start of 2013 prior to the hike, and 84,000 to begin 2014, following the hike (although city officials question any connection between minimum wage policy and new business registration)
- On a broader level, the latest unemployment figures in the San Jose Metropolitan Area show the unemployment rate dropped more than 1 percent since the hike went into effect, per the California Economic Development Department
- In the sector most influenced by wage fluctuation – restaurants and hospitality – the California EDD shows more than 4,000 jobs were created year-over-year
- The most recent figures for average weekly hours for all employees in the metro area, kept by the U.S. Bureau of Labor Statistics, are virtually identical now to what they were back in March
Michael Saltsman, Berman/EPI’s Research Director, appeared on screen to rebut the facts as portrayed in the story. EPI’s support from the restaurant industry is almost never mentioned in media stories quoting their research.
Saltsman responded that we’re not looking at the right figures, especially given the fact that a minimum wage hike affects such a small percentage of workers.
“You can’t look at the overall growth of a city and say, well, it keeps growing so it must not have had an effect,” he said. “What you have to do is look specifically at those businesses where the impact was felt.”
Specifically, Saltsman points to younger, part-time workers who might be particularly hard hit by small changes in hours or staffing.
And so it goes. Get ready for a Tsunami of denial and distortion on the minimum wage issue. No matter how sincere these industry funded talking heads appear, just remember who’s putting money in their pockets. And if your local media outlet fails to identify EPI/Berman as the source of their information, call ’em up and give them hell.
I’ll be here, calling them out one at a time as they appear.
NOTE: There is another group called the Economic Policy Institute (the word ‘policy’ is singular). It is an liberal policy group openly funded by organized labor and foundation grants. This EPI (.org) was founded in 1986 by economists Jeff Faux, Lester Thurow, Ray Marshall, Barry Bluestone, Robert Reich, and Robert Kuttner. The other EPI (Employment Policies Institute) was founded in 1991. Many believe it was deliberately named to create confusion in the eyes of journalists and the general public.
On This Day: 1965 – More than 3,000 civil rights demonstrators led by the Rev. Martin Luther King Jr. began a march from Selma to Montgomery, AL 1984 – Part of Central Park in New York was renamed Strawberry Fields in honor of John Lennon. 2000 – The Supreme Court ruled 5-4 that the U.S. Food and Drug Administration had overstepped its regulatory authority when it attempted to restrict the marketing of cigarettes to youngsters.
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Doug Porter
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Other cities that saw unemployment go down after minimum wage was lifted are Washington and San Francisco, but
not as dramatically as San Jose.
Having read a couple dozen of these studies on the impact of increasing minimum wage, I’d say the impact is likely really zero, as long as it doesn’t exceed growth of GDP. And from that perspective, we’ve got a lot of catching up to do.
The thing that these anti-minimum wage academics tend to gloss over is increasing the minimum wage affects virtually all low wage workers. Lots of companies pay people just a pittance about the legal minimum so they can say they don’t offer min. wage job.
At a minimum, any of us who are shocked by Berman and Co’s. reckless distortion of fact– and their near-felonious determination to undo government protection from destructive and dangerous practices — should be sending copies of this Doug Porter gem to City Council members, and to Jerry Sanders at the Chamber of Commerce and to, of course, Joseph Sabia, alleged economists, at SDSU. Thank you Doug, for keeping the doings of criminals like Berman in front of your readers.
Berman and his local mouthpiece and pseudoeconomist, Joseph Sabia(nada), remind me of Dan Akroyd’s character who advocated dangerous toys for children on SNL back in the… 80s(?). All three defy both common sense and data to pursue the interests of their employers, without shame or second thoughts. These are the psychopaths we heard about who dominate the upper echelons of what used to be known as industry and must now be viewed as organized theft and mayhem.
I agree that Employment Policy Institute was deliberately named to create confusion between it and the older Economic Policy Institue in the eyes of journalists and the general public.
Unfortunately, even you got confused (or your computer) so correction needed … see quote from your piece:
“The Economic Policies Institute [sic] just happens to have published SDSU’s Joseph Sabia’s studies on minimum wage, with titles like “Raising the Minimum Wage: Another Empty Promise for the Working Poor.”
Good job on column. Berman is POS.
Raise Up San Diego!
oops. thanks for catching. I had too many tabs open while writing this morning.
You are a privilege to read. Thank you.