Who is Alan Krueger and why did his name come up when Bernie Sanders, Hillary Clinton, and Martin O’Malley were arguing over the minimum wage Saturday night at the Democratic debate on CBS? And is he a Wall Street crony like O’Malley suggested, or a progressive economist like Hillary said?
Krueger, the former chair of President Obama’s Council of Economic Advisers and a professor of economics at Princeton University, published a paper in 1994—along with David Card at the University of California, Berkeley—looking at the impact on employment after New Jersey raised its minimum wage in 1992. The two men studied hiring patterns at fast food outlets located near the border between New Jersey and Pennsylvania, a neighboring state that did not raise its minimum wage at the time. The result? No job loss for the New Jersey dining establishments. There was, in fact, a slight move toward more full-time work.
This was an unexpected result, to say the least. Economists believed jobs would be lost when the minimum wage was increased, because employers wouldn’t be able to afford to hire as much labor. Some have since performed other studies to show that raising the minimum wage does result in job losses. (As Annie Lowrey noted in the New York Times a few years back, “As always in economics, nobody seems to agree on anything.”) So, based on these other studies, the idea that job losses go up when the minimum wage does remains the conventional wisdom in conservative and Republican circles. Jeb Bush, for example, claimed a few months ago that an increase in the federal minimum wage would “make it harder and harder” for people to get on the “first rung” of the employment ladder. It was a big issue in the last Republican debate as well, with multiple candidates adamantly opposing minimum wage increases. (There is also the idea that a higher minimum wage will lead companies to send jobs to countries where they can pay employees less, which is what Donald Trump was referring to when he claimed “wages [are] too high,” in that debate).