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Waging War
City Hall News
Chris Bragg

December 17, 2010
View the Original Article

The maze of counterstudies and conflicts of interest on living-wage fight arrives in New York

In late October, the Fiscal Policy Institute and the National Employment Law Project released a report claiming that the two researchers being paid $1 million by the city's Economic Development Corporation to study the effects of the living wage bill are biased.

In particular, the two groups noted that one of the economists on the EDCbacked study is Dr. David Neumark of the University of California at Irvine, whom they accuse of having a long pattern of releasing reports slanted against workers for the Washington, D.C.-based Employment Policies Institute. That institute is led by D.C. lobbyist Richard Berman, who has set up a myriad of front non-profits that lobby for business groups.

Though Neumark's studies for the EPI were not on the living-wage issue, progressives have tarred Neumark with this association.

"This is a put-up job to try and come up with arguments against the proposal," said Council Member Oliver Koppell.

Even some veterans of these battles have been surprised with how intense the discrediting effort has gotten so far in advance of the new study's release, expected for the spring.

The living-wage bill is gearing up to be the next major clash between progressives and the Bloomberg administration, following the death of the paid-sick-leave bill, which Council Speaker Christine Quinn shelved following a $100,000 study funded by the Partnership for New York City that showed the legislation would cost the city $789 million annually.

Similar battles over minimum-wage and living-wage laws played out in the late 1990s in San Francisco and Baltimore, each time with some Washingtonbased think tank jumping into the fray, releasing studies and counter-studies that inevitably managed to support the ideology of the groups behind them. All the conflicts of interests have made it difficult to evaluate whether a truly objective study of the effects of a living-wage bill has ever been done, or is even currently in the works.

And now the fight has come to New York City.

The Fiscal Policy Institute and the National Employment Law Project, the two organizations that funded the report exposing Neumark, derive much of their own funding from union interests that support the living-wage bill. The campaign for the bill is being run from the offices of the Retail, Wholesale and Department Store Workers Union.

Meanwhile, in late November, the progressive Center for American Progress put out its own report showing that living-wage standards would have no negative effect on the city's economy.

The Council's Progressive Caucus praised the results as fair and unbiased, even though one of the lead researchers on the Center for American Progress report is a former spokesman for a livingwage campaign in San Francisco. But supporters of the study say these ties in no way compromise the objectivity of its researchers or methodology.

The Bloomberg administration, meanwhile, has its own credibility problems on the issue. The mayor is already on record against the living-wage bill. Even if Neumark's study is conducted objectively, he will still be accused of bias if the result is not to the unions' liking, said Andrew White, director of the New School's Center for New York City Affairs.

"It's chronic in politicized areas that people create studies to back up their perspectives," he said. "Nine out of 10 times, when something is published by an organization that has a stake in the issue, they get attacked. But the way to judge these things is looking at whether people who are experts in the field think there is a valid methodology."

But there is no study done anywhere on living wage that is universally agreed to be comprehensiveand that is part of the reason why the EDC says it commissioned Neumark's study after suffering what it says were unfounded attacks during the Kingsbridge Armory battle.

David Lombino, an EDC spokesman, said the organization competitively bid a handful of different vendors for the livingwage study before awarding it to a Boston firm, Charles River Associates, that has put six different economists on the project. (Neumark is not actually leading the study, though he is the only expert on living wage of the six.) Lombino argued that there is a fairly narrow field of people who have experience studying the livingwage issue to select from, many of whom have records that detractors can cast as biased.

"This is an area of labor economics that is highly politicized at the national level," Lombino said.

Neumark, for his part, has termed his past work on living wage as "wishywashy," according to a recent New York Times article.

A 2005 study on living wage he conducted found that living-wage minimums did help low-wage workers, though they could have adverse effects on the least skilled workers because they were less likely to be employable after a mandated wage is increased.

Neumark defended his past work to City Hall, noting that the living-wage study he put out in 2005 was not for the businessbacked EPI, but rather the non-partisan Public Policy Institute of California. And in 2006, Neumark said the EPI spiked one of his studies on minimum wage because it did not like the conclusions.

Neumark said he has been taken aback by all the controversy surrounding his past association with the EPI, and Berman, its principal, months before his study is even set to come out.

"It's crazy to be arguing when the study isn't done yet," he said.

Berman, meanwhile, has a complicated relationship of his own with Bloomberg. Even as Neumarkand, by extension, the EDCis tarred with associations to Berman, Berman frequently criticizes the mayor through one of his other businessbacked lobbying front groups, the Center for Consumer Freedom.

In one Nov. 9 post, Berman accused Health Commissioner Thomas Farley of "conspiring to cover up the truth about the nutritional content of soda in order to shamelessly scaremonger about sugary drinks." In an Oct. 13 post, he called Bloomberg a "colossal hypocrite."

Berman said that he was simply being set up as a straw man by proponents of the living-wage bill here.

"The amount we're giving for people's studies isn't buying anyone's results," Berman said. "There are not that many good labor economists out there, and they're inevitably going to cross over with organizations like mine."