With a string of cities and states recently raising their minimum wages, businesses are facing the possibility of higher payroll costs in the future. By early next decade, several places like New York and Los Angeles will have local minimum wages double the current, depressingly low federal rate of $7.25.
But, if companies are worried that they might be forced to actually pay their workers enough to live, they have a willing ally in the Employment Policies Institute. Based in Washington D.C., and funded by restaurant groups, the institute has been leading the charge against minimum wage raises. That includes drawing attention to supportive academic research, paying for large newspaper ads (like this one warning how companies will automate jobs before paying higher wages), and now an app called “Wage Engage.”
Wage Engage allows business owners to track minimum wage legislation in states relevant to them, and to offer their opinion about the impact of such increases. “You have an asymmetric battle. You have organized labor groups who can devote their entire days to advocating for a higher minimum wage. Then you have small business owners who didn’t have the time, or didn’t know about [the legislation]. The app lets restaurant owners tell their story in a personal way,” says Michael Saltsman, the group’s research director.
A few things should be clear about the Employment Policies Institute, though. First, it’s not to be confused (obviously) with the left-leaning Economic Policy Institute, which supports completely opposite goals. Second, it doesn’t actually produce original research, despite calling itself a research group (it does fund outside researchers it agrees with).
And, third, it was set up by Richard Berman, a notorious PR guru who sometimes goes by the name “Dr Evil.” As well as the Employment Policies Institute, Berman also founded the Center for Consumer Freedom, which lobbies for meat, drink and tobacco industries, and the Center for Union Facts, which lobbies against unions. As nonprofits, these groups don’t have to disclose their donors, even though they’re controlled by Berman’s main PR operation.
While the case for raising minimum wage all the way to $15 isn’t open and shut, raising the minimum wage is incredibly important. We do have some recent data from Seattle, which is in the process of raising its wage. The University of Washington studied the effect of the recent increases and found that while workers saw income gains and businesses didn’t increase prices, there was some evidence businesses didn’t hire as many workers as they might have. That speaks to the EPI’s point that minimum wages are a crude way to help workers as a whole. Saltsman argues instead for expanding the Earned Income Tax Credit, which already goes to many restaurant workers with families.
“Because customers are price-sensitive, companies have to take offsetting steps, automating jobs that were once done by employees,” Saltsman argues. “I’d rather [people] earn a wage that provides a partial subsidy [the EITC], rather leaving people entirely reliant on government when they lose their job.”
There may be some value to this argument, but it’s hard to take Saltsman too seriously, given his employer. The Employment Policies Institute is a wholly disingenuous group funded by companies that stand to lose from minimum wage increases. If he really believed in helping workers, he’d lobby for the EITC. Instead, he’s spending lots of money fighting the one thing communities can easily do to help workers lives get better right now.