Economic cost of losing newspapers

Not too many years ago, there were 112 members of the Peoria Newspaper Guild representing employees at the Journal Star including reporters, photographers and workers in circulation. That number has plummeted and now there are only 29 Newspaper Guild members at Peoria’s only daily paper.

In 2007, the paper was purchased by GateHouse Media headquartered in New York. The new owner continues to cut local employees. Terminations in June at the Journal Star included the last remaining local editorial writer (with 33 years at the paper) and a pressman (with 30 years at the paper).

Other GateHouse papers, including the Springfield State Journal-Register, have completely eliminated the copy desk, laid off copy editors and farmed out that work to a hub in Austin, Texas. The Guild has been fighting to preserve the copy desk in Peoria.

As the paper’s work force declines, so does coverage and economic impact on Peoria. A number of people eliminated from the Journal Star have other jobs in the Peoria area but many of them have left for jobs in Chicago, Washington, D.C., and other locations.

A recent study by Notre Dame’s Mendoza College of Business concludes that the cost of government rises when local newspapers close. The study looked at 1,600 newspapers serving 1,266 counties. When the watchdog role of newspapers is lost, local government becomes less efficient, the study found.

After Denver’s Rocky Mountain News closed in 2009, the cost of issuing local municipal bonds increased 37 basis points, significantly increasing the cost of borrowing. When the Cincinnati Post closed in 2007, the cost of issuing local municipal bonds increased by 66.1 basis points. The study concludes newspapers serve an essential watchdog role that pressures local governments to strive for efficiencies.

Adding to challenges facing newspapers is the new tariff the Trump Administration imposed on newsprint (paper) from Canada.

Donald Trump makes no secret about his hatred of journalists. Trump’s Commerce Department imposed the new tariff on newsprint in response to a complaint received by Northern Pacific Paper, a company located in Washington state owned by a Wall Street hedge fund. This is not part of Trump’s tough stand against trade imbalances with Canada, China and the EU. This is a targeted action.

Since the new tariff was imposed, papers have been forced to make cuts. The Tampa Bay Times, St. Petersburg, Fla., announced it will lay off 50 employees due to cost increases.

There are several efforts underway to preserve independent local journalism. One is Civil Media Co. that hopes to start 1,000 publications by year end.

Community Word remains independently owned for an independent voice.

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