Did KSTP Get The “Facts” Right When Reporting How Minimum Wage Affects Restaurants?

KSTP LOGOLast night KSTP Television ran a story about restaurant owners’ take on what an increase in minimum wage would mean to their business.  Restaurant owners, like anyone else, are entitled to their opinions so I won’t question their pessimistic outlook.  (Although I think we should.)  I grant them the right to grumble.  Instead I want to talk about how a  story like this is presented overall and also point out at least one point in this story when information was reported so that it might be confused as fact when it wasn’t.

First, I am going to stick to my premise that these restaurant owners are expressing opinions, not facts, about their business.  When they say an increase in wages will prevent them from hiring, expanding, getting loans and so on, I don’t know what facts they are basing those statements.  They don’t tell us and maybe it would make for a long, dull story if they did.

Restaurant Workers1However, the tight correlation between higher wages and lost business opportunity isn’t that simple.  Other business costs rise (and fall) in the cycle of an enterprise, but every increase in the cost of some input — say cheese for the pizza business — does not uniformly correlate in the closing of x per cent of pizza businesses throughout that market.  Often what happens is the increased cost of production gets passed down to consumers which changes demand for the product and that then might lead to loss of employment.  It’s an indirect correlation between the costs of production and the profitable productivity of the worker.

But let me back off on that position a little.  I know my supply/demand curves well enough to know that in aggregate, higher wages often does have a negative impact on business choices, usually hiring (but not always).  If there is minimum wage set above the real wage determined by the supply/demand equilibrium in the labor market, employers might find ways to use less labor, for example.  However this isn’t necessarily the case.  If the unit of labor remains product and profitable, there is no reason to cut that labor.  Many factors get involved, including a glut in labor supply, which defines the current labor market, especially on low skill end of today’s labor market.

Restaurant Worker Minimum Wage has Not Risen i...

Anyway, to assess what would happen if minimum wage rises — and I hate to say it — requires more investigating and reporting than just asking the guys who are doing the hiring.  And I mean that with all due respect to the people doing the hiring.  However it is in employers’ interest to forward the job loss argument and keep wages low, especially if there is no pressure to raise them.  The labor market today is a buyer’s (i.e., employer’s) market.   What would happen in reality if wages were raised is a more complicated mix of other competitive inputs and processes at play in the market than just saying higher wages will mean and can only mean lower employment.

So without going t0o far afield, let’s get back to the story on KSTP.

What troubles me — and KSTP is not unique, not by a long shot — is the blurring of distinctions between editorial and journalistic content in the restaurant minimum wage story.  I would argue that the story of what higher wages would mean to the restaurant industry as told by restaurant owners is more of a editorial story rather than a journalistic one.  That isn’t to say that KSTP should not cover it and it doesn’t mean that the restaurant owners are wrong.  It is simply the difference — and not so subtle, in my opinion — between an opinion piece and what would otherwise be a “news” story, one that investigates and reports the facts of an issue or event.

Maybe it is the viewer’s responsibility to discern this difference and think for himself, but as the discursive environment today becomes more political, let’s not expect a lot of that to happen.  Moreover, I don’t think that individual responsibility takes journalists and news services off the hook.  They should be more accountable for how they present a story.  Is it news or something else?  That is their professional and ethical responsibility.

Restaurant Workers3At the close of the story last night, KSTP anchor Bill Lunn reported that when minimum wage was raised in Oregon and Washington several years ago 50,000 restaurant jobs were lost.  I tried to get the source cleared up, but haven’t heard back.  The source was the Minnesota Restaurant Association, the opinions of which was subject of the story.  Checking this claim, however, I did not find any source to support it.  In fact, I found exactly the opposite.  However on KSTP it went unchallenged and was reported as a closing remark.  This, I think, proves my concern.

Choose any issue and you will find a range of “facts” about that issue.  And across the political spectrum you will find an increasing editorial slant influencing the stories told about these issues.  But I don’t think that clears the way for blurring the lines between opinions and reporting the facts of an issue.

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