The above image was part of a full-page ad produced by the Employment Policies Institute (EPI) that appeared in the New York Times last Tuesday. In addition to the photo, the ad condemns the push from Congressional Democrats and President Obama to raise the federal minimum wage to $10.10 an hour by 2016 and index it to inflation going forward. My first thought (after resisting the urge to just rip the ad right out of the paper) was: I wonder how many actual unemployed and minimum wage workers the ad's creators surveyed before deciding what they need and don't need. What do you think?
The ad cites "most studies" as showing that a minimum wage hike doesn't actually help poor people, and then claims "The Best Weapon in the War on Poverty Is a Job." What the ad is actually trying to do is pit the unemployed against minimum wage workers seeking a living wage. There's a lot of bunk being peddled here. Let's unpack it piece by piece.
First, the academic, nonpartisan-sounding assertion about poverty and raising the minimum wage is simply incorrect. This Washington Post article by the Roosevelt Institute's Mike Konczal makes quite clear that the scholarly consensus is, in fact, the opposite. Even among scholars who disagree over whether raising the minimum wage has an effect on employment, there is no debate that doing so would reduce poverty, according to a recently published, comprehensive survey of relevant academic studies.
Konczal, relying on the data produced in the survey article, estimates that the Democratic minimum wage proposal would raise 4.6 million Americans above the poverty line, and increase by $1,700 a year the income of people at the tenth percentile from the bottom. More broadly, enacting the proposal would result in a noticeable increase in what folks in the bottom 30 percent would earn, and would have no discernible impact on households at the median income level.
Additionally, seventy-five top economists -- including seven Nobel Prize winners -- recently came out in support of the Democratic proposal (conservatives from Bill O'Reilly to Phyllis Schafly to Ron Unz, have also endorsed raising the minimum wage to at least $10/hour, which tells you which way the wind is blowing). The economists' letter noted:
The vast majority of employees who would benefit are adults in working families, disproportionately women, who work at least 20 hours a week and depend on these earnings to make ends meet.
The economists' statement, released through the Economic Policy Institute (EPI [look familiar?]), also cites "the weight of evidence" indicating that raising the minimum wage has little to no impact on employment rates among low wage workers. This study from the Center for Economic Policy and Research demonstrates why this is the case. Of course, the people behind the anti-minimum wage ad claim that raising the minimum wage hurts job creation. More bunk.
So, where exactly did that ad -- the one whose claims directly contradict the findings of economists -- come from? The ad came from the EPI, as I said above. But didn't I cite two different organizations claiming to be serious, nonpartisan economic research institutes that both share the acronym EPI? Yep. The ad came from the Employment Policies Institute (founded in 1991), while the economists' statement in support of raising the mininum came from the Economic Policy Institute (founded in 1986, five years earlier). So who is the Employment Policies Institute, and why might they have chosen a name that echoes an already existing think tank, one founded by progressive economists known for serious research?
The Employment Policies Institute is little more than a shill, a front group for the restaurant industry and other corporate, right-wing interests, as documented by the Center for Media and Democracy's SourceWatch. Here's more on these shills:
The Employment Policies Institute operates from the same office suite as Berman and Co., a public relations firm owned by Richard Berman. This is not an opinion; it's a fact anyone can verify by viewing EPI and Berman and Co.'s websites.
(snip) At the Center for Media and Democracy, we have spent 20 years tracking disinformation and spin, and Richard Berman has long been one of our favorite research subjects. Berman came out of the restaurant industry, spending several years as a top executive at Steak and Ale before launching Berman and Co. to help advocate for corporate America. His clients have included tobacco companies (for which he formed an entity he called the Center for Consumer Freedom) and the alcoholic beverage industry (for which he created the American Beverage Institute). He was once profiled on a 60 Minutes piece titled "Dr. Evil." But one of his most successful products has been the Employment Policies Institute.
EPI regularly opines in the press on a host of topics. Recently it has been working to show that restaurant workers don't need higher wages or paid sick days, but few Americans are informed by the press that this "think tank" is just one or two individuals working for spinmeister Berman.
Berman's Employment Policies Institute opposes not only an increase to the minimum wage, but a minimum wage of any kind. Previously, it has lined up with the right wing against health care reform, and -- in what may be a first for a self-described "nonprofit research organization dedicated to studying public policy issues surrounding employment growth" -- took out a full page ad attacking ... wait for it ... ACORN.
CREW (Citizens for Responsibility and Ethics in Washington) has created a website called "Berman Exposed" that offers the following:
Richard Berman is a Washington, D.C.-based hired gun who uses front groups to defend his corporate clients against the public interest. Using his lobbying and consulting firm, Berman and Company, as a revenue vehicle for his activities, Berman runs at least 23 industry-funded projects...and holds 24 "positions" within these various entities.
The anti-minimum wage ad is part of a larger push by corporations -- spearheaded by the U.S. Chamber of Commerce -- to attack the interests of workers. The lead article in Friday's New York Times Business section examines the push in detail. For good measure, that article notes that Berman has been paid millions of dollars by corporate interests to oppose labor unions and push hard against an increase in the minimum wage.
On the merits, the case for raising the minimum wage to (at least) $10.10 an hour and indexing it to inflation going forward is a no-brainer. The purchasing power of the minimum wage is barely two-thirds what it was at its high point in 1968, and has been essentially flat since 1990.
The ad created by corporate shill Richard Berman also says we should focus on creating jobs, not raising the minimum wage. Never mind that, according to the real EPI, enacting the Democratic minimum wage proposal would increase GDP by $22 billion over the next three years, resulting in the creation of 85,000 net new jobs. That's in addition to lifting millions out of poverty.
Corporations don't want the American people to hear that reality. So what do they do? Follow the same playbook as they do on climate change, or as they did for decades on tobacco. Pay millions of dollars to their hacks and shills to create "institutes" designed to look like independent, non-partisan, research organizations, and spread their propaganda to the point that too many in the media just go ahead and report both sides of the controversy.
Imagine if, instead of pumping millions of dollars into public relations and fake science, these corporations just put those funds into the wallets of their employees. The reality is that increasing the take home pay of low-wage workers will lead them to spend more money. That increased demand will create more jobs, as well as greater profits for those business owners who oppose raising the minimum wage. This is what economists call a virtuous cycle.
Beyond that, there is a broader moral truth. No one should work forty hours a week and be stuck in poverty. An honest day's pay for an honest day's work. I know I've heard that somewhere. When it comes to anti-worker propaganda disguised as independent research, honesty is what's sorely lacking.