With millions of small business owners in the United States, why can multiple news outlets find only one small business owner to say that federal health care reform will negatively impact business?
When national news outlets want to know how ordinary small business owners feel about the U.S. Supreme Court upholding the Patient Protection and Affordable Care Act (ACA), they apparently all turn to just one man: Joe Olivo, owner of Perfect Printing in New Jersey. In recent weeks, Olivo has been quoted by both NPR and NBC News as a representative small business owner concerned that the ACA will make him reluctant to hire more employees.
But as first reported by No More Mister Nice Blog, Olivo is not just any ordinary small business owner.
Olivo is a member of (and apparent spokesman for) the National Federation of Independent Business (NFIB), which was the lead plaintiff in the U.S. Supreme Court challenge to the Affordable Care Act. As the Center for Media and Democracy has reported, the NFIB is a highly partisan front group masquerading as representative of small businesses. The NFIB has received millions from Karl Rove's Crossroads GPS and has strong ties to the American Legislative Exchange Council, or ALEC.
The NFIB boasted of their member Olivo's 2010 testimony against federal health care reform before House and Senate Committees, and named Olivo a "Small Business Champion" that year. The group promoted many of his other appearances on their website and YouTube page, and made Olivo the subject of an NFIB "My Voice in Washington" online video in 2011.
Neither NPR nor NBC disclosed Olivo's relationship with the lead plaintiff in the challenge to ACA (and they did not mention that the NFIB has been bankrolled by deep-pocketed special interests). Viewers and listeners were given the impression that Olivo was a randomly selected, disinterested small businessman.
On NPR's Morning Edition, Yuki Noguchi reported on June 30:
The law will give some small businesses tax incentives to pay for employee health care. Starting in 2014, those with 50 or more employees will be required to provide it.
That requirement is bad news for businesses like Perfect Printing in Moorestown, N.J. The company's president and CEO, Joe Olivo, says he now has 48 employees, for whom he pays some health care coverage.
But he's intensely aware of crossing that 50-person threshold and will think very hard before hiring more people so he can avoid hitting government requirements that he says will raise his health care costs.
That evening, Anne Thompson of NBC News reported:
ANNE THOMPSON: For small business owners like Joe Olivo, it is the unknown cost of the law that could impact his printing business ...
Olivo offers health care to his 48 workers. If he goes to 50, he says the law would require him to provide more comprehensive and expensive care or pay a penalty. He says the penalty makes more sense.
JOE OLIVO: The penalty is far below my premiums. It'll be cheaper for me to allow the employees to go and purchase insurance on the exchange by themselves...
ANNE THOMPSON: A potential unintended consequence of a law aimed at expanding healthcare.
It is not just the failure to disclose Olivo's affiliations where these networks failed their viewers. Both NBC and NPR failed to put Olivo's comments into any sort of context.
As the Center for Economic and Policy Research notes:
[NPR's] Morning Edition could have taken 30 seconds to give listeners an idea of the size of the burden that the ACA imposes. For firms that employ fewer than 50 workers, there are no requirements. Firms of 50 workers or more must either provide insurance or pay a penalty.
The size of penalty is $2,000 per worker, with the first 30 workers exempted. This means that if a company employs exactly 50 workers (as could be the case with the employer profiled), then the company would have to pay a $40,000 fine. If the average pay for a worker is $10 an hour (in other words, everyone gets close to the minimum wage), this fine would add 4 percent to the company's wage bill. If the employer currently pays for some care (as the employer profiled claimed he did), he would be able to stop paying for the care, which would offset much or all of this cost.
By comparison, past minimum wage increases have been on the order of 15-20 percent. Extensive research has found that these increases in labor costs have had little or no impact on employment, meaning that firms have been able to absorb this additional expense without substantially changing their operations. This research suggests that the burden imposed by the ACA would have relatively little impact on business.
With well over 25 million small businesses in this country, an ordinary viewer or listener might expect that corporate media like NBC or increasingly corporate-reliant media like NPR could find numerous businesses on both sides of the ACA to discuss its benefits and downsides. But NBC, NPR and others only gave NFIB's Olivo the spotlight, after NFIB helped build him up as a "spokesperson" for small business.
As a consequence, the audience not only received distorted information about the view of small businesses, but it received a message that was cultivated through NFIB, which is bankrolled by interests that are not "small" at all.
Update: You can raise your concerns with NPR's ombudsman by contacting them here.