News-Record.com

A couple weeks ago, I started getting mail and e-mail from a group called the Employment Policies Institute, most of it focuses on the much-talked-about minimum wage increase that the General Assembly will take in the session that starts next week.

Who is the Employment Policies Institute? That's the question I was asking anyway, since I'd never heard of these folks.

On their web site EPI calls itself " a non-profit research organization dedicated to studying public policy issues surrounding employment growth. In particular, EPI focuses on issues that affect entry-level employment."

Typical of their pitch is this from an e-mail today:

Decades of economic research conclude that mandated wage hikes eliminate entry-level jobs, putting particular pressure on minorities and the low-skilled. A Cornell University study found that black young adults typically bear almost four times the employment loss of their non-black counterparts after a minimum wage increase. Specifically, they found that a 10% increase in the minimum wage will result in an 8.5% decrease in employment for black young adults and teenagers.

“The truth of the matter is that minimum wage hikes make it more difficult for young adults to get their foot in the door and start acquiring the skills they need to get ahead in life,” said Michael Flynn, Director of Legislative Affairs for the Employment Policies Institute. “Policymakers must focus on the conditions of the nation's least skilled employees—those who will actually be affected by an increase. The most recent data from the Labor Department shows that these individuals are simply not enjoying the gains of the recent positive employment news.”

Really? You know, I hadn't heard any of this from the folks pushing the minimum wage in North Carolina, not that one expects and advocacy group to push against their own interest.

So who is EPI again?

Well, according to the Center for Media and Democracy EPI is a custom made think tank created by Restaurant-industry lobbyist Rick Berman of Berman & Co. (Btw...a critique of the Center for Media and Democracy is here, but to cut to the chase, they're a progressive think tank that does some pretty good investigation of corporate communication strategies.) And yes, the restaurant and bar lobby in North Carolina are some of the most vocal advocates opposing the minimum wage here.

So...EPI is a lobbyist-funded group. There's nothing about that on their "About Us" page.

So I sent an e-mail off to Alison Preszler, the group's communications director:

Alison:

Thanks for getting in touch. I had never heard of your group before and so took a look about, finding this report on the Center for Media and Democracy’s web site: http://www.prwatch.org/prwissues/2001Q1/berman1.html

Needless to say, that report doesn’t paint your group in a positive light and gives me a bit of heart burn in using any of your figures. Do you wish to straighten me out on some fact I may be missing?

Please keep in mind that in addition to writing for the newspaper I write a blog for our company (http://blog.news-record.com/staff/capblog/) and may use your response there.

Thanks very much.

--mark

I've not gotten a response as of this posting, but it has not been all that long and it is Friday afternoon.

Update: Alison e-mails back:

Mark –

Thanks for emailing me back.

The Employment Policies Institute was indeed founded by Rick Berman. We’ve never attempted to hide the fact that we are funded by businesses in many industries, foundations, and individuals. EPI does not conduct any research. EPI commissions research from leading economists at universities across the country.

We have a distinguished Advisory Board which includes a Nobel Laureate, a 2005 MacArthur Genius, and a former congressional budget office director. We have presented our research in testimony on the hill many times including just this week.

John Stauber obviously has an agenda and an axe to grind with any pro-business group. It’s safe to say that if you can’t beat the message then you’re forced to shoot the messenger. The truth of the matter is that minimum wage increases kill jobs and history and economics prove this fact. I will gladly bore you with studies dating back to the very first minimum wage increase in 1939 that attest to this economic fact.

Again, I appreciate the fact that you emailed me. If I can leave you with anything it’s the point that all of the research EPI promotes was conducted by economists at leading universities, all of whom will handily defend their work against the kind of anti-business smear campaigns such as Stauber’s.

If there are any particular points in Mr. Stauber’s blog that you would like me to address, please let me know.

Thanks.
Alison

So what of this Cornell study she mentions? As it turns out, it exists and was done by Richard Burkhauser. It has been cited in other places, like Cox News Service. The report is called "The Diminishing Target Efficiency of Minimum Wage Hikes: The Case of Single Mothers," and is listed as a "Working Paper" on Burkhauser's Curriculum Vitae. (NY's Gov. George Pataki listed it as a reason for opposing a minimum wage hike in his state.)

So, is the minimum wage really a bad thing?

Well, that's where you can play dueling experts. If you take Burkhauser to be credible (and I do) are there equally credible experts who take the opposite point of view?

Yes.

For example David Card and Alan Krueger have published on the topic and come to different conclusions from Burkhauser.

So what conclusions to draw. Right now, here's where I am:

There is economic research by some credible folks on both sides of the minimum wage debate. From my reading, it seems you're hard pressed to make a case that business suffers under such an increase, but you may also be equally hard pressed to prove that such an increase helps all those you're aiming at.

As for EPI, I continue to be leery of any group trying to appear non-partisan when they appear to have quite a large axe to grind.