Richard Berman Misleads on Restaurant Opposition to Higher Wages

By Jessica Mason and Kim Haddow

Richard Berman, whose PR firm and endless industry-backed front groups have led the fight against raising the minimum wage, sinks to a new low with a website that features restaurant owners ostensibly opposed to a $15 minimum wage.

The problem? Many of these restaurant owners, when contacted by the Center for Media and Democracy (CMD), turned out to support the higher wage and were not happy to hear that their businesses were caught up in Berman's spin machine.

Richard Berman, a.k.a. "Dr. Evil," Strikes Again

Berman’s lobbying and public relations firm, Berman & Company, serves clients in the fast-food, alcohol, and tobacco industries, all with a stake in keeping the minimum wage as low as possible. He has long been known for creating front groups and attack-dog websites to bedevil industry targets including consumer groups, environmental groups, the Humane Society, and even CMD. He was dubbed "Dr. Evil" by 60 Minutes in 2007 and exposed more recently in the New York Times.

A former restaurant industry executive, Berman also created a corporate-funded "think tank" the Employment Policies Institute (EPI) run by Michael Saltsman out of Berman's office, who presents himself as a "scholarly researcher" instead of a flack on the attack paid by Berman’s industry clients to pen endless op-eds warning of the dire consequences of raising the minimum wage.

Faces of 15 Website Misleads

In April EPI launched the new website, "Faces of 15" (facesof15.com), ostensibly to highlight "The consequences of minimum wage hikes" on small businesses. The website features more than two dozen "struggling" small businesses in L.A., Oakland, and Seattle that it presents as the real faces of the national campaign dubbed the "Fight for $15."

Contacted by CMD about the use of their stories in an anti-minimum wage PR campaign, representatives of several of the businesses on "Faces of 15" had no knowledge of the website and in fact disagreed with its message.

Jeremy Price, co-owner of Seattle-based restaurant The Walrus & The Carpenter, told CMD "we were not aware" the restaurant was being used in an anti-minimum wage PR campaign.

"In point of fact, Walrus voluntarily adopted the $15/hr wage a few years ahead of Seattle's min wage ordinance," said Price. "It has been a positive change for our staff and our business. We expect others to follow our lead here in Seattle over the next 6 months."

The owners of Pizzaiolo of Oakland, California, who favor a minimum wage increase, likewise did not know about the website and felt their views were misrepresented.

Other restaurants featured on "Faces of 15" have also had their responses to the wage hike misrepresented by the PR campaign, including Ivar’s Salmon House. According to the right-wing Washington Free Beacon, which covered the roll-out of EPI's new website, "Seattle’s Ivar’s Salmon House will raise prices 21 percent and discourage tipping to deal with costs."

In fact, like many other restaurants adapting to higher minimum wages Ivar's eliminated tipping and adjusted prices accordingly. The net price hike at Ivar's came out to about 3 percent, since customers were paying an average of 17 percent in tips prior to the change, and the change allows for greater parity between servers and the hard-working kitchen staff.

"[It] created tension in the restaurant. We wanted to address that tension. The people in the kitchen are becoming much closer to the people in the front of the house. So that discrepancy is lessening," Ivar's President Bob Donegan told King 5 News.

The wage increase was such a "struggle" for Ivar's that it not only raised its wages before the deadline, but voluntarily extended the raise to employees at locations outside of Seattle.

Another "small business" on the site was in fact a Seattle franchise of national chain Z Pizza. It closed earlier this year only to be replaced by another pizza place whose owners appear not to be too worried about the minimum wage hike.

A representative of the incoming restaurant, Wisconsin-based Ian's Pizza, told CMD the company was "very excited and enthusiastic" about entering the Seattle market. They're not alone: new data show Seattle's restaurant sector has added almost 2,000 jobs since January.

The site also features the restaurant industry's newest bogeyman, automation. "A new McDonald’s on Sutter Street in San Francisco uses touch-screen kiosks rather than entry-level employees to take customer orders," reads Faces of 15.

But according to the store's owner, Scott Roder, the store is actually running a pilot for a new customizable menu and had to hire more employees than a typical McDonald's.

Using misinformation about real businesses without their knowledge in a campaign purporting to defend small business is a dirty trick. Yet again, Berman & Company is willing to win ugly, even if it means losing the truth.

Industry Strategy Defending Corporate Profits in the Name of Small Business

Economists say some small number of firms will have a hard time adapting their business models to provide a living wage for their workers. This is why cities like Seattle have worked to alleviate concerns expressed by truly small, locally-owned businesses by allowing them longer phase-in periods for wage hikes. But it simply isn't true that small business owners as a group oppose a higher minimum wage. Polls show about half of small business owners nationwide actually support raising the minimum wage.

If Berman wanted to create a website illustrating the real opponents of the Fight for $15, he would create one featuring the International Franchise Association, the American Hotel and Lodging Association, the National Federation of Independent Business, the National Restaurant Association, and the Job Creators Network. These trade associations lobby hard for lower wages and provide a smoke screen for the involvement of member companies such as McDonald's, Coca Cola, Choice Hotels, Marriott, and other corporations whose profits rely on low-wage work.

Fortunately, CMD has profiled these groups and their tactics on a new website called WageCrushers.org.