How Misinformation Pollutes Public Policy

January 2, 2015 Posted by Matthew Gagnon - No Comments

At its best, research can be the backbone of policymaking.  It can provide the numbers that illuminate problems for lawmakers intent on solving them, and can either prove or disprove the wisdom of proposals made by leaders of all political persuasions and parties.

At it worst, though, it can be a maddening game of telephone, where bad or misleading numbers spread like wildfire, and are then used to make critically important policy decisions for tens of thousands of people.

Take for instance, the case of the minimum wage, and Bangor City Councilor Joe Baldacci.

On Friday afternoon, Baldacci began to post on Facebook his interest in pushing a local ordinance in the city of Bangor that would increase the minimum wage. Specifically, Baldacci claimed, “an increase in the minimum wage from to say $8.50 next year and $9.50 in 2016 would put more money in people’s pockets that would be spent locally many times. And its [sic] very unlikely to discourage any businesses from coming to Bangor.”

More money for everyone and no negative consequences to consider at all.  Wonderful.

But Baldacci wasn’t done.  He then posted this:

Screen Shot 2015-01-02 at 4.24.43 PM

Immediately, I noticed that he made the claim that one in four workers in the 2nd Congressional District was on minimum wage.  Maine is, of course, a poor state, but that number seemed absurdly high.  So I asked Baldacci where he got his numbers from.

“Its coming from an article in the BDN this weekend.”

When I pressed further for the actual source of the claim, Baldacci cited this column in the Bangor Daily News by Heather Denkmire, an artist and writer from Portland who wrote about how important she felt raising the minimum wage was.

Interestingly, Denkmire did in fact claim in her column that a high number of workers — 23 percent — in Maine’s 2nd Congressional District were working on minimum wage.  Her citation for that claim was a recent blog post by the Maine Center for Economic Policy, which made the same claim.

That claim, in turn, was based on a report by Oxfam America, a progressive advocacy group that deals with issues of poverty and hunger.

However, that report did not claim that 23 percent of workers in the 2nd Congressional District were living on minimum wage.  Instead, the report attempts to find the number of “low-wage workers”, which for Oxfam’s purposes is defined as those earning $11.50 per hour or less, which is obviously significantly higher ($4 an hour more) than the current minimum wage in Maine ($7.50).  That number of “low-wage workers?”  23 percent, of course.

So, if you are having trouble following, a liberal interest group group (Oxfam) released data that showed 23 percent of Mainers in the 2nd Congressional District made less than $11.50 an hour.  Maine Center for Economic Policy saw that study, and either intentionally misrepresented what the report said, or was so lax in their research standards that they misread (and didn’t check) what the report said, and then claimed it said 23 percent of 2nd District citizens were working on the minimum wage.  That was then picked up by a liberal artisan in Portland who wrote a column that cited it, which was seen by a Bangor City Councilor who now wants to make a local ordinance in the city based off the faulty data.

Oxfam > MECEP > Denkmire > Baldacci and no one along the chain had the intellectual curiosity or integrity to check the absurdly misleading numbers they were regurgitating to the public to justify the policy solution they were recommending.

What is the truth?

According to a report in March 2014 by the U.S. Bureau of Labor Statistics, there are only 13,000 workers — statewide — currently earning the minimum wage or below.  4,000 making minimum wage, 9,000 making below (who presumably wouldn’t be subject to any hike anyway).

Quite a different picture than one in four people in just the 2nd District.

This may seem trite, but it isn’t.  When policy makers are basing their initiatives and opinions on not only bad data, but outright misrepresentated data, and when the facts are so diametrically opposed to the reality created by the faulty data, it has frightening consequences for laws and ordinances made in Maine.

Make no mistake, Maine is poor, and poverty is a tragic problem here.  As The Maine Heritage Policy Center highlighted last month, Maine workers earn an average of just $26,464 per year, and over 35% of our population is classified as “low income.” Maine is even ranked a dismal 32nd in the country for median household income.  There is no question that low wages are a problem.

But when the entire economy of Maine — or in this case, the economy of the city of Bangor — are negatively impacted to hike the wage of such a small sub-section of Maine workers, we are left with a punitive mess.

Large businesses, particularly big box stores run by mega-corporations, will easily absorb the cost of marginally higher wages.  Local small businesses, on the other hand, will be forced into difficult choices.  Will they let an employee go to afford the higher cost of labor for low-skill jobs?  Will they keep their employees, but raise prices to attempt to make up the difference, thereby making them even less competitive on price than the big box stores and online retailers like Amazon?

Fewer jobs, struggling employers, and higher prices are not good for the poor in any way.

The truth is, an ordinance such as the one suggested by Baldacci will continue the trend of squeezing small, local businesses out of town, and leaving large box-store retailers as the only ones who can withstand the additional cost, essentially eliminating their small-business competition for them.

In the real world, decisions on issues such as the minimum wage have costs, and benefits.  Policy makers are in the unenviable position of weighing those costs against those benefits, so that they can make the right choices to create better communities, and a better state.

But when they can’t even get the basic facts right because of the irresponsible perpetuation of bad data, the decision making process suffers, and bad policy results.

And make no mistake, despite the intoxicatingly easy, emotional argument made by proponents, a raise in the minimum wage is not good policy.  It results in fewer workers being employed, a very small number of people seeing their wages go up, higher prices, and expanding costs to already struggling small businesses.

The only real solution for Maine’s persistent poverty is economic growth.  Mainers don’t need fewer minimum wage jobs, they need more high paying jobs.  People stuck in persistent underemployment and low-wage careers need the potential for higher earnings and economic mobility.  That comes from a developed, diversified economy that places a priority on jobs that pay more.

Getting there is no easy task.  The problems preventing Maine solving the problem of low-wages are pervasive.  It will take a complete reimagining of the public education system, rebuilding higher education, and more effectively connecting it to the local economy, a more sensible regulatory environment for business, a more competitive tax system at all levels, a more flexible labor environment, a cheaper energy market, and a militant focus on attracting businesses to Maine.

In short, economic development is a more difficult, long-view solution for the problem when compared to the siren song of easy answers, like raising the minimum wage.  But it is also the only solution that has any realistic hope of improving the circumstances of Maine people who are currently stuck in poverty, and it is time policymakers took the issue seriously.