To protect democracy, revive local journalism

By Laura Tyson and Lenny Mendonca

BERKELEY — The Washington Post’s famous slogan, “Democracy Dies in Darkness”, is sadly coming true in many parts of the United States. The digital age has shattered newspapers’ business model, turning many communities into “news deserts” with no local journalism. Some 2,500 daily or weekly newspapers have folded since 2005, and there are now fewer than 6,500 left. Every week, two more disappear.

The decline of local journalism is driven by many factors, but economic challenges top the list. Earlier in the Internet era, Craigslist supplanted the classified ads that previously funded newspaper journalism. Then came the big digital platforms, which put the final nails in the coffin of the traditional advertising model. Starved of revenue, local news outlets have had to lay off staff, reduce coverage areas, or shut down altogether.

According to Pew Research, the number of local newsroom employees in the US fell by 57 per cent between 2008 and 2020, resulting in thousands of “ghost newspapers” that barely cover their own communities. Small local newspapers simply do not have the scale to compete against digital advertising giants like Google and Facebook.

Media industry consolidation has also played a role in the decline of local journalism. In recent years, many smaller newspapers have become part of larger conglomerates that are focused wholly on profits, usually at the expense of local reporting. As a result, news coverage has been homogenised, and coverage of local issues has suffered, with editorial decisions being made at the corporate level rather than by journalists on the ground.

It should go without saying that local journalism is vital for informing citizens about government decision-making, community events, and the local issues that will most directly affect them. The traditional local newspaper served as a watchdog, holding local officials accountable and facilitating public engagement. Without local journalism, citizens become less informed, and corruption becomes more likely, leading to a decline in voter turnout and erosion of democratic institutions. Worse, the absence of credible information allows for the proliferation of misinformation, rumors, and outlandish conspiracy theories, further undermining trust in the democratic process.

The decline of local journalism has also contributed to political polarisation more broadly. As local newspapers diminish in number and influence, citizens increasingly rely on national news outlets, which tend to be more partisan. Without local outlets offering neutral and balanced reporting, citizens are pulled into echo chambers, consuming only media that align with their preexisting beliefs. The creation of “filter bubbles” by social-media algorithms means that the electorate increasingly lacks a foundation of shared facts and information. As news consumers become less exposed to competing points of view, polarisation deepens.

But it does not have to be this way. Nonprofit news organisations, community-supported journalism, and membership-based models have emerged as potential alternatives to the traditional advertising-driven approach. Most of these models rely on community engagement and philanthropic support, and new entrants have already become essential for local journalism in many areas.

For example, in the space of less than a decade, the nonprofit CalMatters has increased its staff of journalists covering California state politics and other issues to 40, providing crucial information and accountability for the world’s fifth-largest economy.

Moreover, many community foundations have become homes for journalistic fundraising and, in some cases, for journalists, too. Larger foundations are supporting journalists who cover their areas of interest, from climate change and education to inequality. Over the past decade, philanthropic spending on journalism in the US has nearly quadrupled, to over $250 million per year. TheGuardian.org

alone has more than a dozen funders providing at least $500,000 per year.

But much more is needed. Steve Waldman, the president of Rebuild Local News and a co-founder of Report for America, estimates that it will cost $1.5 billion per year to restore local journalism (by employing roughly 25,000 reporters on salaries of $60,000 per year). While substantial, that is equal to a mere 0.02 per cent of federal-government spending, or less than 50 cents per American per month. For comparison, there are nearly 700 higher-education institutions in the US with endowments over $1 billion.

Broader public funding is likely necessary to fill this financing gap. The US government currently spends a mere $3.16 per person on public media, most of which goes to the Corporation for Public Broadcasting to support local public television and radio stations. A country like Germany, meanwhile, spends more than $142 per capita on public media.

Some states and local governments have already been providing additional funding. For example, New Jersey’s Civic Information Consortium funds 14 separate local news organisations; the New Mexico Local News Fund supports 16 journalists across the state; and a recent $25 million budget appropriation in California will support 39 journalism fellows, with a “focus on underserved communities”. Similarly, Massachusetts, New York, Virginia, Wisconsin and Washington are all considering tax credits for local-media subscriptions and payrolls. Other states are directing some of their public advertising budgets toward supporting local media outlets in underprivileged communities.

Other bold solutions have been considered, but have stalled. At the federal level, the Local Journalism Sustainability Act would have allocated $1 billion for tax credits supporting local journalism, but it died along with the Build Back Better bill. Similarly, California’s Journalism Preservation Act has been put on hold. If enacted, it would direct digital advertising giants to pay news outlets a “journalism usage fee” when they sell advertising alongside news content, and it would require publishers to invest 70 per cent of those funds in preserving journalism jobs in California.

Such measures may prove indispensable. Local journalism plays a vital role in protecting democracy. But to protect both, we urgently need more business innovation, philanthropic investment, and public support for independent media.

Laura Tyson, a former chair of the president’s Council of Economic Advisers during the Clinton administration, is a professor at the Haas School of Business at the University of California, Berkeley, and a member of the board of advisers at Angeleno Group. Lenny Mendonca, senior partner emeritus at McKinsey & Company, is a former chief economic and business adviser to Governor Gavin Newsom of California and chair of the California High-Speed Rail Authority. Copyright: Project Syndicate, 2023.

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