FACT CHECK: Pro-Puzder Ad Funded by Restaurant Industry Astroturf Group, Relies on Suspect Research

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Today a cable television ad campaign launched in Washington, D.C., in an effort to bolster the nomination of Andy Puzder for Secretary of Labor. The ad leans heavily on a survey of Carl’s Jr and Hardee’s employees performed by CorCom Inc., but entities behind the survey cast doubt on the independence of its data. Furthermore, the $40,000 ad buy is funded by Employment Policies Institute (EmPI), an astroturf front group funded by the restaurant industry, among others. In the past, EmPI has led campaigns to oppose increases in the minimum wage, establishment of paid sick leave, and the requirement of employers to provide employees with health care. As one might expect, EmPI has had its research called into question by experts in the past.

Entities Behind Survey Cited in Ad Cast Doubt on Data Independence

Respondents for the survey cited in the ad were furnished by “franchisees,” as well as the Employment Policies Institute, which “is run by a public relations firm that also represents the restaurant industry.”

  • The ad attempts to back up its claims by citing a survey administered by CorCom, Inc., on behalf of the Employment Policies Institute.[1]
  • The study begins with a “methods” caveat that the list of people contacted for phone interviews was “provided by client/Employment Policies Institute.” The press release for the survey also references “franchisees who provided the contact information.”[2]
  • Employment Policies Institute (EmPI) “is run by a public relations firm that also represents the restaurant industry.” The institute was “founded two decades ago” and is led by “advertising and public relations executive Richard B. Berman, who has made millions of dollars in Washington by taking up the causes of corporate America.”[3]

President of Company That Conducted Research Is Anti-Minimum Wage Activist and Former Republican Elected Official

The president of the company that conducted research for the Employment Policies Institute is an anti-minimum wage activist and former Republican elected official from Pennsylvania.

  • The President and CEO of CorCom, Inc., is Lloyd Corder, Ph.D.[4]
  • Corder ran as a Republican and was elected to the Ben Avon, PA, Borough Council where he served from 1998 through 2013, including a stint as Council President.[5]
  • Corder is an anti-minimum wage activist who has written extensively on, and been frequently quoted by reporters concerning, his views.[6]

Employment Policies Institute Has Had Its Research Questioned in the Past

Employment Policies Institute had its 2012 research on the economic impact of raising the minimum wage questioned by experts.

  • In 2014, the New York Times cited “a 2012 paper funded in part by the institute” that was criticized by a University of Delaware economics professor who “concluded that the narrow cut of data . . . 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.”[7]

The following research from Citizens for Responsibility and Ethics in Washington (CREW)[8] reveals Employment Policies Institute is a restaurant industry-funded astroturf group that fights against policies that would help workers get ahead. EmPl is led by veteran Washington, D.C., lobbyist and consultant Richard Berman, known for his sketchy and deceptive public relations campaigns.

Employment Policies Institute Is a Restaurant Industry-Funded Astroturf Group

  • “EmPI is funded by corporate interests looking to protect their bottom lines. When EmPI first launched, National Journal reported that it was ‘supported financially by several large restaurant chains’ and was ‘out to convince Congress that restaurants shouldn’t have to pay their employees the minimum wage on top of tips, shouldn’t have to levy the Social Security payroll tax on employees’ income from tips, and shouldn’t be required to provide health insurance to all of their workers.’[9] In 1995, National Journal reported EmPI had been started ‘by a group of restaurant companies that wanted an alternative source of research on labor issues.’[10] National Journal also noted EmPI ‘gets 95 percent of its budget from corporate sources– primarily restaurateurs and retailers.’”[11]

Employment Policies Institute Fought Efforts to Have Employers Give Workers Health Care

  • “One of EmPI’s first campaigns was to oppose employers being required to provide health care for employees. In 1992, thirty-five companies, including IHOP, Olive Garden, and TGI Fridays, bankrolled an EmPI campaign on health care seeking to promote alternatives to employer mandates, according to the Los Angeles Times.[12] American Express, ‘concerned that its restaurant clients could lose substantial business if they are forced to boost menu prices to pay for health policies,’ was also part of the coalition.[13] Berman and EmPI have continually opposed employer mandates since then.[14] ‘Demanding employers provide healthcare will not effectively increase healthcare coverage in today’s economy,’ said Richard Berman in a 2006 EmPI press release.[15] ‘Instead of mandates on businesses, lawmakers need to look toward consumer-driven solutions that won’t result in job loss or reduced income for the nation’s low-skilled employees.’ In November 2009, EmPI announced a ‘$10 million, high-saturation advertising campaign’ to scare the public about health care reform.[16] The campaign, with the tagline Rethink Reform, was a joint project with Berman’s Employee Freedom Action Committee (EFAC), which ran the similarly titled Committee to Rethink Reform campaign.”[17]

Employment Policies Institute Attacked Efforts to Raise the Minimum Wage

  • “EmPI attacks efforts to raise the minimum wage wherever they occur. ‘One of the most hotly contested issues for my clients is the bid to increase the minimum wage,’ Berman told a reporter back when he was a registered lobbyist. ‘It comes up all the time. My job is to jump all over it.’[18] EmPI maintains the website MinimumWage.com, which includes a section that claims to bust ‘myths’ about the minimum wage. John Stoehr, the editor of the New Haven Advocate, described in the Columbia Journalism Review how, after his alt-weekly received a letter from a researcher at EmPI, he looked at EmPI’s website and ‘found nearly ninety letters to the editor’ all written by the same researcher, Michael Saltsman.[19] ‘Many were duplicates that varied only to fit the subject matter of whatever article they were responding to,’ wrote Stoehr.‘All said raising the minimum wage leads to a paradoxical conclusion: job loss.’[20] According to a CREW analysis, in the first three months of 2013 alone, Saltsman published at least fifty op-eds and letters to the editor critical of raising the minimum wage. Saltsman and EmPI often cite research by economist David Neumark and his colleagues to argue raising the minimum wage has negative effects,[21] but they rarely acknowledge that EmPI has provided Neumark with funding and research support over the years.[22] As far back as 1995, Neumark and Federal Reserve economist William Wascher used data provided by EmPI to challenge a prominent study that supported minimum-wage increases.[23] Though Neumark told City Hall News in 2010 that EmPI once spiked one of his studies on the minimum wage because they did not like the findings, he continues to work with the Berman group.[24] As recently as January 2013, a discussion paper released by Neumark, Wascher, and University of California, Irvine, graduate student Ian Salas, acknowledged, ‘Neumark and Salas’ work on this project received support from the Employment Policies Institute.’[25] EmPI’s ongoing campaign against minimum-wage increases recalls Berman’s position in the late 1980s as the head of the Minimum Wage Coalition to Save Jobs. During that period, he authored an op-ed titled, ‘Minimum Wage Should Be Ended; It Doesn’t Make Sense.’”[26]

Employment Policies Institute Fought against Paid Sick Leave for Workers

  • “EmPI fights against paid sick leave for employees. Berman and EmPI also have focused on pushing back against requiring businesses to provide paid sick days to employees. In a 2007 op-ed for Retailing Today, Berman said that advocates of paid leave make ‘moral’ arguments, but have ‘a dangerous ignorance of how our companies actually operate.’[27] Berman claimed increased paid sick leave would likely lead to increased unemployment for ‘less skilled, low income employees.’ In 2011, EmPI commissioned and promoted a poll they said demonstrated giving ‘a new benefit of paid sick time to employees doesn’t mean they’ll use that benefit as intended,’ since a majority of respondents claimed they knew ‘someone that has used paid sick time for reasons other than an illness—such as extending their summer vacation.’[28] EmPI’s Saltsman claimed this meant ‘the public clearly understands that a mandated benefit that puts your income at risk is no benefit at all.’[29] In February 2013, EmPI released a ‘pilot study’ of the effects of Connecticut’s paid sick leave law claiming to show ‘consequences for both employers and employees,’ though EmPI admitted the ‘results should not be interpreted as being representative’ since they only spoke to business owners who were on a list provided by the Connecticut Business and Industry Association and the Connecticut Restaurant Association.”[30]

End Notes

[1]Carl’s Jr/Hardee’s Employee Survey Summary,” Employment Policies Institute’s MinimumWage.com website, accessed February 9, 2017.

[2] Ibid.; and MinimumWage.com, “National Survey of Franchisee Employees Finds Overwhelming Satisfaction,“ news release, January 10, 2017.

[3] Eric Lipton, “Fight Over Minimum Wage Illustrates Web of Industry Ties,” New York Times, February 9, 2014.

[4]Lloyd Corder, Ph.D.,” CorCom, Inc. website, Staff section, accessed February 9, 2017.

[5]Alleghany County Primary Candidates: North Region, Communities A-K,” Pittsburgh Post-Gazette, April 16, 2009; Lcorder01 YouTube channel, “Lloyd Corder, Ph.D., Ben Avon Borough Council,” YouTube video, 4:14, posted February 17, 2009; and  Lloyd Corder, Ph.D. LinkedIn page accessed February 10, 2017.

[6] Lloyd Corder, “Superficial Minimum Wage Mandates Based on Brand Names,” Forbes, January 22, 2016; and Michael Saltsman, “Minimum Wage Hikes Hit Franchises Harder,” Orange County (CA) Register, January 22, 2016.

[7] Lipton, “Fight Over Minimum Wage.”

[8]Employment Policies Institute” report, Citizens for Responsibility and Ethics in Washington, bermanexposed.org website, accessed February 10, 2017.

[9] Rochelle Stanfield, “Taking Some Lobbying Tips; Washington Inc.,” National Journal, November 23, 1991.

[10] Louis Jacobson, “Tanks On The Roll,” National Journal, July 8, 1995.

[11]  Ibid.

[12] Robert Rosenblatt, “News Analysis: Firms Uniting for Attack on Compulsory Coverage,” Los Angeles Times, November 16, 1992.

[13]  Ibid.

[14] Health Care Category, Employment Policies Institute website, accessed by CREW in 2009.

[15] Employment Policies Institute, “Research Reveals Folly of Managing Healthcare Through Employers,” news release, February 1, 2006.

[16] Employment Policies Institute, “Employment Policies Institute Launches $10 Million Campaign Urging the Public to Rethink Health Care Reform,” news release, November 11, 2009.

[17]Rethink Reform,” overview of Public Relations Campaign sponsored by Employment Policies Institute and the Employee Freedom Action Committee,  Berman and Company website from September 2010, accessed February 13, 2017.

[18] David Cohen, Chasing the Red, White, and Blue: A Journey in Tocqueville’s Footsteps Through Contemporary America. New York: Picador, 2003, 280–282.

[19] John Stoehr, “Letter Man,” Columbia Journalism Review, December 23, 2011.

[20] Ibid.

[21] Michael Saltsman, “Another Voice: New Research Debunks Report Favoring Pay Increase,” Buffalo News, January 22, 2013; Saltsman, “Minimum Wage: Credible Studies Show Raising It Costs Jobs,” San Jose (CA) Mercury News, April 19, 2013 (updated August 12, 2016); and Saltsman, “Hiding Link Between Higher Minimum Wage, Job Loss,” Orange County (CA) Register, January 11, 2013.

[22] David Neumark curriculum vitae, University of California, Irvine, School of Social Sciences website, accessed February 10, 2017; and John McClain, “Study Backing Wage Increase Flawed, Panel Told,” Associated Press, April 5, 1995.

[23]  John McClain, “Study Backing Wage Increase Flawed, Panel Told,” Associated Press , April 5, 1995.

[24] Chris Bragg, “Waging War: The Maze of Counterstudies and Conflicts of Interest on Living-Wage Fight Arrives in New York,” City Hall News 5, no. 7 (December 13, 2010) 2-3.

[25] David Neumark, J. M. Ian Salas, and William Wascher, “Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater,” National Bureau of Economic Research, working paper 18681, January 2013.

[26] Richard Berman, “Minimum Wage Should Be Ended; It Doesn’t Make Sense,” Sunday Telegraph, March 20, 1988.

[27] Richard Berman, “A Sickening Amount of Ignorance,” Retailing Today, August 13, 2007.

[28] Employment Policies Institute, “New Poll: Over Half of Americans Know Someone That’s Used Paid Sick Leave to Take a Paid Vacation,” news release, July 12, 2011.

[29] Ibid.

[30] http://www.epionline.org/study/paid-sick-leave-connecticut/ (Details at Way Back Machine)

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