Obama nominee pulled back on minimum wage defense
- August 31, 2011
- Research by David Neumark, economics professor, is quoted in Forbes August 31, 2011
As I mentioned previously, [Alan] Krueger is most well-known for a study he did with UC Berkeley economist David Card that upset the conventional wisdom that raising the minimum wage depresses job creation. The two studied employment at 410 fast-food restaurants in Pennsylvania and New Jersey, arguing in a 1994 paper that raising the minimum wage in New Jersey boosted employment. But [Michael] Saltsman tells me there was much subsequent critique of Card and Krueger's use of a phone survey to gather data. EPI did its own paper using payroll records, and reached the opposite conclusion from Card and Krueger, finding that New Jersey's hike in the minimum wage resulted in job loss. Yet more scholars took up the debate, and two economists, UC Irvine's David Neumark and the Federal Reserve Board's William Wascher, wound up publishing a 2000 paper in The American Economic Review, the same journal that had run Card and Krueger's original. Wrote Neumark and Wascher, "the New Jersey minimum-wage increase led to a 3.9-percent to 4.0 percent decrease in fast-food employment in New Jersey relative to the Pennsylvania control group."
For the full story, please visit http://www.forbes.com/sites/susanadams/2011/08/31/obama-nominee-pulled-b....