During a March 3 report on Sen. Edward Kennedy's (D-MA) proposal to increase the federal minimum wage to $7.25 an hour, Kathleen Schalch, national desk reporter for National Public Radio (NPR), repeated a pattern in the media of citing the Employment Policies Institute (EPI) without identifying the organization as an industry-funded, Republican-linked think tank.
After reporting that the "AFL-CIO's legislative director, Bill Samuel, agrees with Senator Kennedy that an increase in the minimum wage is long overdue" and airing a clip of Samuel voicing support for Kennedy's proposal, Schalch turned to EPI's Craig Garthwaite to present the opposing point of view.
From the March 3 edition of NPR's Morning Edition:
SCHALCH: But some business groups oppose raising the minimum wage at all. Some say it would cost too much and drive up prices for consumers. And some argue that it would actually hurt the poor.
GARTHWAITE: Decades of research on the increases in the minimum wage have shown that when you raise the minimum wage, you tend to hurt the very people you're trying to help.
SCHALCH: Craig Garthwaite is director of research for the Employment Policies Institute, a Washington think tank. He says adult high school dropouts and other vulnerable workers are typically the ones that get hurt.
While Schalch identified Garthwaite generally as representing "business groups," she did not note that EPI receives funding specifically from the fast-food and low-wage hospitality industry or that the institute is run by the public relations firm Berman and Company, which has strong ties to the Republican Party.
A July 8, 1995, National Journal report identified EPI as "[a]nother new think tank with even closer ties to industry," which was "started in 1992 by a group of restaurant companies that wanted an alternative source of research on labor issues." Los Angeles Times business columnist Harvey Bernstein referred to EPI in a September 15, 1992, column as the "recently created business-funded Employment Policies Institute" and as the "conservative EPI, financed mostly by low-wage companies such as hotels and restaurants." Bernstein noted that EPI "has come up with some misleading studies," including one that "hails as a great thing the distressing growth of part-time jobs because they offer 'flexibility' in economic planning for both workers and companies, and say that flexibility is vital 'in the growing and increasingly competitive global economy.'" Bernstein also noted: "Even the name of this new institute is misleading. It calls itself EPI, the same name used for years by the older and much more progressive Economic Policy Institute."
The address listed on the group's website is the same as the address for Berman and Company. According to the Institute's IRS Form 990, EPI paid Berman and Company $472,076 in management company fees in 2003. Richard Berman, a federally registered lobbyist who wholly owns Berman and Company, is EPI's executive director.
In 1993, Berman donated $25,000 to sponsor a college course taught by then-House Minority Whip Newt Gingrich (R-GA). That contribution and others like it sparked a House ethics investigation into the political goals of the course. The investigation ended in 1997 when the Ethics Committee recommended a reprimand and a $300,000 fine for Gingrich, which the House approved. According to The Washington Post, "Gingrich admitted that he brought discredit to the House and broke its rules by failing to ensure that financing for two projects would not violate federal tax law and by giving the House ethics committee false information."
Richard Berman has contributed $6,700 to political candidates since 2000 -- all to Republicans, according to the Center for Responsive Politics.
Berman and Company also runs the American Beverage Institute, a coalition of restaurant owners and alcoholic beverage makers that claims to, among other things, "expose and vigorously counter the campaigns of modern-day prohibitionists," and the Center for Consumer Freedom (CCF), which argues against efforts to regulate food and drink manufacturers. The Center for Media and Democracy, a public relations industry watchdog group, has published an overview of Berman's activities.
Aside from Berman, EPI's officers and staff include:
- Jacob Dweck, director, a partner at the law firm of Sutherland, Asbill and Brennan, LLP, who "had the lead role in significant matters for the Shell Oil group including Coral, the Statoil group, Calpine, PG&E National Energy Group (now NEGT), the Vitol group, NYMEX, and a substantial number of other major energy concerns."
- Michael Burita, who handles communications for EPI and CCF. Burita served as campaign manager for former House Rep. Bill Redmond's (R-NM) 1997 campaign [Santa Fe New Mexican, May 9, 1997].
- Richard Toikka, a member of the Republican National Lawyers Association, was quoted as an "Employment Policies Institute staff economist" in a May 2002 City Limits MONTHLY article. He is not listed on EPI's 990 for 2003.
- Craig Garthwaite, Schalch's source for the minimum wage story, who holds various titles including "director of research," "chief economist", and "secretary/treasurer." Garthwaite holds a master's degree in public policy from the Ford School at the University of Michigan, but according to his biography from his previous job at Public Sector Consultants in Michigan, he does not have a degree in economics.
According to the Institute's IRS Form 990, Berman works an average of an hour a week for EPI, and Garthwaite -- research director for what Schalch labeled a "think tank" -- works an average of a quarter of an hour a week. Neither Berman nor Garthwaite apparently collect a salary from the Institute. The three other people listed as "Officers, Directors, Trustees, and Key Employees" work an average of a quarter of an hour a week each, and each received $500 in compensation.
Many media outlets have cited EPI in 2005 without identifying its industry and partisan ties. Three newspapers have identified EPI as "a nonprofit research organization" (Business Insurance, February 28, 2005; Duluth News Tribune, February 19, 2005; Detroit Free Press, February 18, 2005); two have called the group a "Washington-based public policy organization" (The San Diego Union Tribune, January 12, 2005; Torrance Daily Breeze, January 9, 2005), and three reports attached no modifiers to the group (The Detroit News, February 16, 2005; The Associated Press, February 14, 2005; Public Radio International's Marketplace Morning Report, January 7, 2005).
Other news outlets have confused the industry-backed EPI with the progressive Economic Policy Institute. The Seattle Post-Intelligencer reported on February 9 that Jared Bernstein worked for the Employment Policies Institute, when in fact he works for the Economic Policy Institute. And The Washington Times called the Berman EPI a "union-backed think tank" in its January 8 report on the December jobs figures.