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EMPLOYMENT POLICIES INSTITUTE

The Employment Policies Institute (EmPI) exists to provide economic research supporting the restaurant and retail industry bottom line on issues related to treatment of employees. EmPI funds and distributes research opposing raising the minimum wage, requiring paid sick leave for employees, and providing employees health care. In recent years, EmPI has sought to raise the salience of the national debt in the name of protecting the interests of the top 1% of U.S. taxpayers. Founded in 1991 and incorporated as a tax-exempt group in 1994,1 EmPI promotes itself as focused on studying public policy issues surrounding employment growth and issues that affect entry-level employment.2 For most of its history, EmPI has worked to undermine efforts to raise the minimum wage.3 According to Chain Leader, Richard Berman created EmPI because a number of industry leaders wanted more sophisticated research on labor issues.4 Berman serves as president and executive director of EmPI.5 In 2012, EmPI paid Berman and Company, Inc. (BCI) over $1 million, an amount equal to 44 percent of EmPIs expenses that year.6 EmPI is funded by corporate interests looking to protect their bottom lines. When EmPI first launched, National Journal reported it was supported financially by several large restaurant chains and was out to convince Congress that restaurants shouldnt have to pay their employees the minimum wage on top of tips, shouldnt have to levy the Social Security payroll tax on employees income from tips and shouldnt be required to provide health insurance to all of their workers.7 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.8 National Journal also noted EmPI gets 95 percent of its budget from corporate sources primarily restaurateurs and retailers.9 One of EmPIs first campaigns was to oppose requiring employers to provide health care for employees. In 1992, 35 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.10 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.11 Berman and EmPI have continually opposed

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Employment Policies Institute, IRS Form 990, Initial Return 2011, filed November 11, 2012. http://www.epionline.org/aboutepi/. 3 http://www.epionline.org/minimum-wage/minimum-wage-research/. 4 Charles Bernstein, The Zealot, Chain Leader, December 1999. 5 Employment Policies Institute, IRS Form 990, Initial Return 2012, filed November 8, 2013. 6 Id. 7 Rochelle Stanfield, Taking Some Lobbying Tips; Washington Inc., National Journal, November 23, 1991. 8 Louis Jacobson, Tanks On The Roll, National Journal, July 8, 1995. 9 Id. 10 Robert Rosenblatt, News Analysis: Firms Uniting for Attack on Compulsory Coverage, Los Angeles Times, November 16, 1992. 11 Id.

employer mandates since then.12 Demanding employers provide healthcare will not effectively increase healthcare coverage in todays economy, said Berman in a 2006 EmPI press release.13 Instead of mandates on businesses, lawmakers need to look toward consumer-driven solutions that wont result in job loss or reduced income for the nations low-skilled employees. In November 2009, EmPI announced a $10 million, high-saturation advertising campaign to scare the public about health care reform.14 The campaign, with the tagline Rethink Reform, was a joint project with Bermans Employee Freedom Action Committee (EFAC), which ran the similarly titled Committee to Rethink Reform campaign.15 EmPIs misleading $10 million anti-health care reform campaign in 2009 was funded by Bermans clients. EmPIs $10 million Rethink Reform ad campaign featured former Congressional Budget Office director June ONeill.16 Berman told Roll Call the ad campaign was funded by his clients, but he refused to say which ones.17 These are people we do business with and have an interest in the issue, said Berman. The Hill reported he hoped to raise $15 million in total for the campaign against Democratic healthcare proposals.18 One ad that was part of the campaign claimed reform would mean rationing of care for seniors.19 FactCheck.org responded by noting the rationed care myth had been debunked many times before.20 In a fact-check of an ad featuring ONeill, NPR said her claims that the health care bill will add to the nations debt ignore the projections by her former employer, the CBO, which estimated the legislation would lower the budget deficit.21 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.22 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 EmPIs website and found nearly ninety letters to the editor all written by the same researcher, Michael Saltsman.23 Many were duplicates that varied only to fit the subject matter of whatever article they were responding to, wrote Stoehr.

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http://www.epionline.org/category/health-care/. Press Release, Employment Policies Institute, Research Reveals Folly of Managing Healthcare Through Employers, February 1, 2006. 14 Press Release, Employment Policies Institute, Employment Policies Institute Launches $10 Million Campaign Urging the Public to Rethink Health Care Reform, November 11, 2009. 15 http://www.bermanco.com/case-studies/. 16 Jordan Rau, Congress Former Fiscal Expert Attacks Health Overhaul Effort, Kaiser Health News, November 24, 2009. 17 Bennett Roth and Matthew Murray, K Street Files: Tea for $280K, Roll Call, November 16, 2009. 18 Alexander Bolton, Business Group Unveils $10 Million Campaign Against Health Reform, The Hill, November 12, 2009. 19 Justin Bank, Extras: Endorsements, Rockwell, Abortion, FactCheck.org, December 18, 2009. 20 Id. 21 Jordan Rau, Ad Watch: Fiscal Expert Says Health Overhaul Adds Costs, National Public Radio, November 24, 2009. 22 David Cohen, Chasing the Red, White, and Blue: A Journey in Tocquevilles Footsteps Through Contemporary America. New York: Picador, 2003, at 280282. 23 John Stoehr, Letter Man, Columbia Journalism Review, December 23, 2011.

All said raising the minimum wage leads to a paradoxical conclusion: job loss.24 According to a CREW analysis, in the first three months of 2013 alone, Saltsman published at least 50 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,25 but they rarely acknowledge that EmPI has provided Neumark funding and research support over the years.26 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.27 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.28 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.29 EmPIs ongoing campaign against minimum-wage increases recalls Bermans 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 Doesnt Make Sense.30 EmPI fights against paid sick leave for employees. Berman and EmPI have also focused on pushing back against requiring businesses to provide paid sick days to employees. In a 2007 oped for Retailing Today, Berman said that advocates of paid leave make moral arguments, but have a dangerous ignorance of how our companies actually operate.31 Berman claimed increased paid sick leave would likely lead to increased unemployment for less skilled, lowincome employees. In 2011, EmPI commissioned and promoted a poll they said demonstrated giving a new benefit of paid sick time to employees doesnt mean theyll 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 illnesssuch as extending their summer vacation.32 EmPIs Saltsman claimed this meant the public clearly understands that a mandated benefit that puts your income at risk is no benefit at all.33 In February 2013, EmPI released a pilot study of the effects of Connecticuts paid sick leave law claiming to show consequences for both employers and employees, though EmPI admitted the results should not be interpreted as being

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Id. Michael Saltsman, Another Voice: New Research Debunks Report Favoring Pay Increase, Buffalo News, January 23, 2013; Michael Saltsman, Minimum Wage: Credible Studies Show Raising It Costs Jobs, San Jose Mercury News, April 23, 2013; Michael Saltsman, Hiding Link Between Higher Minimum Wage, Job Loss, Orange County Register, January 11, 2013. 26 David Neumark, Curriculum Vitae, available at http://www.socsci.uci.edu/~dneumark/cv_107.pdf. 27 John McClain, Study Backing Wage Increase Flawed, Panel Told, Associated Press, April 5, 1995. 28 Chris Bragg, The Maze of Counterstudies and Conflicts of Interest on Living-Wage Fight Arrives in New York, City Hall News, December 17, 2010. 29 David Neumark, Ian Salas, and William Wascher, Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater, IZA DP No. 7166, January 2013. 30 Richard Berman, Minimum Wage Should Be Ended; It Doesnt Make Sense, The Sunday Telegraph, March 20, 1988. 31 Richard Berman, A Sickening Amount of Ignorance, Retailing Today, August 13, 2007. 32 Press Release, Employment Policies Institute, New Poll: Over Half of Americans Know Someone Thats Used Paid Sick Leave to Take a Paid Vacation, July 12, 2011. 33 Id.

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.34 EmPI ran an ad campaign defending the top 1 percent of taxpayers. In 2009, as part of its Defeat the Debt campaign, EmPI paid for national newspaper ads asking Who is John Galt? in reference to Ayn Rands famous character.35 The ad copy complained about how the top 1% of American earners pay 40% of all federal income taxes.36 When the ad campaign launched, Berman explained the thinking behind the ad: The thing that got me was the last statistic I saw the one about how much the top 1% of the US taxpayer base is carrying, Berman said. I thought, this really is kind of crazy that were getting to the point that looks like an Atlas Shrugged scenario. With this much debt somebodys going to have to pay for it.37 Berman has long been concerned that high deficits could negatively affect the restaurant industry. In 1989, he warned dozens of chain restaurant executives the governments deficit could harm their businesses.38 The federal government is saying and you wont see it written this way that we want to shift more of the responsibility for social problems onto business, Berman said.39 Whats driving this? Social Security is looking more and more like a failed program. The problem is that the [Social Security] revenues are not being put in the bank. This money is going on the books and is then being lent to the government to pay the deficit. Berman warned the deficit could lead to a push for mandated health benefits for retirees or a requirement that businesses offer pensions.40 EmPIs name regularly causes confusion with the Economic Policy Institute. After EmPI first launched, Los Angeles Times labor reporter Harry Bernstein 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, wrote Bernstein.41 According to PR Watch, Bermans EmPI not only used the same acronym and very similar name as the Economic Policy Institute, it also used the same typeface for its logo.42 The Economic Policy Institute wrote to Berman, telling him, Your choice of name for your organization is causing serious and unfortunate public confusion. Reporters, leaders of public interest groups, [c]ongressional staffers and members of the public have all expressed to us surprise and puzzlement as a result of mistakenly thinking our organization to be responsible for the public activities and publishing of your organization, said then-communications director Roger Hickey.43 Reportedly, Berman eventually agreed to change the logo, but confusion between the two EPIs persisted.44

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http://www.epionline.org/study/paid-sick-leave-connecticut/. http://www.defeatthedebt.com/our-ads/; Matthew Bandyk, John Galt Not Hiding From The Public Eye, U.S. News and World Report, September 2, 2009. 36 http://www.defeatthedebt.com/our-ads/. 37 Ben Smith, Group Promotes Debt Worries, Rand, Politico, September 1, 2009. 38 Peter Romeo, Execs Plot to Defuse Legislation, Nations Restaurant News, October 2, 1989. 39 Id. 40 Id. 41 Jon Thurber, Harry Bernstein, 83; Veteran Labor Reporter For The Times, Los Angeles Times, May 4, 2006; Harry Bernstein, Troubling Facts on Employment, Los Angeles Times, September 15, 1992. 42 Sheldon Rampton and John Stauber, Berman & Co.: Nonprofit Hustlers for the Food & Booze Biz, PRWatch, First Quarter 2001, Volume 8, No. 1. 43 Id. 44 Raphael Schweber-Koren, NPR, Media Quoted Think Tank Without Noting Industry, GOP Ties, Media Matters, March 4, 2005.

Berman and EmPI played a role in Newt Gingrichs mid-1990s ethics problems. In 1993, when then-House Republican whip Gingrich (R-GA) sought to set up a satellite college course, his political aides solicited financial support from individuals, corporations and foundations.45 In a memo, an employee of Gingrichs political organization, GOPAC, wrote that Berman had expressed interest in donating $20,000 $25,000 if the course incorporated Berman-endorsed research.46 Gingrichs course eventually used material Berman provided on restaurant mogul Norman Brinker, a Berman client.47 When Berman eventually sent a $25,000 check on behalf of EmPI to Gingrich, he scrawled a thank you to Gingrich: Newt, thanks again for the help on todays committee hearing.48 Berman told the New York Times the note referred to Gingrichs help in getting him called as a witness at a House hearing on drunk driving.49 Bermans note led to accusations of a quid pro quo and was featured in an investigation by the House Ethics Committee. The charge of a quid pro quo with Berman was dismissed, but the ethics investigation led to a reprimand of Gingrich and a $300,000 penalty.50 EmPI has intricate financial ties with Bermans other nonprofit groups. In 2009, EmPI received a $6.9 million grant from Berman-run CCF to support employment and consumer issues.51 That same year, EmPI spent almost the same amount of money to fund anti-health care reform efforts, which included the RethinkReform website, five print ads, three TV ads, and one radio ad.52 In 2010, another Berman organization, the Family Coalition, gave EmPI $1.24 million to support its health care public education.53 That same year, EmPI reported spending $1.74 million on anti-health care reform efforts. Between 2006 and 2010, EmPI issued grants totaling more than $2.6 million to the Center for Union Facts, supporting program services, research on public policy issues related to labor unions/distribution of information re same, and educational issues regarding unionization of employees.54

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Peter Applebome, Gingrich Plan for Satellite Lessons Arouses Critics, New York Times, September 4, 1993; Angie Drobnic Holan and Louis Jacobson, Did Newt Gingrich Pay A $300,000 Ethics Fine Back in the 1990s?, Politifact, February 7, 2012. 46 Letter from Pamla Prochnow to Joe Gaylord, Tim Mescon, and Jeff Eisenach, May 10, 1993, available at http://ethics.house.gov/sites/ethics.house.gov/files/_Exhibits%2047-95.pdf, at 272; Glenn Bunting and Alan Miller, Gingrichs College Course Linked to Republican PAC, Los Angeles Times, February 19, 1995. 47 Glenn Simpson, The Berman Letter: Thanks For Your Help!, Mother Jones, July/August 1995. 48 Id. 49 Stephen Engelberg, Democrat Seeks Outsider for Gingrich Inquiry, New York Times, December 9, 1994. 50 Michael Ross, Rival Calls for Probe of Gingrich Book Deal and Ties to Lobbyists, Los Angeles Times, January 27, 1995; House Ethics Committee, 104th Congress, Inquiry Into Various Complaints Filed Against Representative Newt Gingrich, Report No. 104-401, December 12, 1995, available at http://ethics.house.gov/sites/ethics.house.gov/files/Hrpt104-401.pdf; Drobnic Holan and Jacobson, Politifact, Feb. 7, 2012. 51 Center for Consumer Freedom, IRS Form 990, Initial 2009 Return, filed November 9, 2010. 52 Employment Policies Institute, IRS Form 990, Initial 2009 Return, filed November 8, 2010. 53 Family Coalition, IRS Form 990, Initial 2010 Return, November 10, 2011. 54 Employment Policies Institute, IRS Form 990, Initial 2006 Return, filed November 8, 2007; Employment Policies Institute, IRS Form 990, Initial 2007 Return, filed November 10, 2008; Employment Policies Institute, IRS Form 990, Initial 2008 Return, filed November 12, 2009; Employment Policies Institute, IRS Form 990, Initial 2010 Return, filed November 10, 2011.

EmPI has also done business as The Center for Economic and Entrepreneurial Literacy, Defeat the Debt, and Citizens for Workplace Democracy.55 According to Mother Jones, the Center for Economic and Entrepreneurial Literacy claims to advance economic literacy, but in practice they promoted payday loans as a lifeline for desperate borrowers using talking points that are strikingly similar to the ones that payday lenders have been repeating for years.56 Additionally, in 2012, EmPI developed and launched the Interstate Policy Alliance, an effort to coordinate and promote state-specific economic research efforts to a wider audience.57 EmPI maintains the following websites: EPIonline.com, DefeatTheDebt.com, RethinkReform.com, VoteOurFuture.com, RottenAcorn.org, Econ4U.org, MinimumWage.com, TippedWage.com, BadIdeaCA.com, and PolicyAlliance.org. LivingWage.org redirects to EPIonline.com. EmPI also owns the domain TeenUnemployment.com and in the past ran or owned the domain for Debt-Clock.com, US-Debt-Clock.com, LivingWageResearch.com, and GatewayJobs.org.

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Employment Policies Institute, IRS Form 990, Initial 2008 Return, filed November 12, 2009; Employment Policies Institute, IRS Form 990, Initial 2009 Return, filed November 8, 2010. 56 Daniel Schulman, Dr. Evils Payday, Mother Jones, September/October 2009. 57 Employment Policies Institute, IRS Form 990, Initial Return 2012, filed November 8, 2013.