Update 339 • In Memoriam • Prof. Alan Krueger Labor Economist Applied Actual Facts to Policy
Princeton Professor of Political Economy Alan Krueger passed away this weekend at the age of 58, leaving behind a breadth of work and critical thinking that challenged mainstream economic discipline and gave rise to a new form of applied empirical economics. He was also an architect of the post-2008 recovery we still enjoy. He was a collaborator with 20/20 Vision, providing invaluable feedback and insight that have informed our update perspectives.
Minimum Wage Paradigm Shift
Professor Krueger redefined minimum wage theory and policy. In 1993, one year before he served as chief economist at the US Department of Labor, he co-authored a research paper challenging the longstanding assumption that increases in the minimum wage inevitably lead to a rise in unemployment.
After New Jersey raised its minimum wage from $4.25/hr. to $5.05/hr. in April 1992, Krueger and co-author David Card surveyed over 400 fast food restaurants across New Jersey and neighboring Pennsylvania. They found that, despite New Jersey’s minimum wage increase, “full-time employment increased in New Jersey relative to Pennsylvania.”
Their work helped change the discussion around minimum wage legislation. Today, with unemployment at close-to-record lows, 29 states have minimum wages higher than the federal level — $7.25/hr. — and there is a nationwide push to raise the federal minimum to $15/hr.
Architect of Recovery in Obama Administration
Krueger was Assistant Secretary in the Obama Treasury Department, 2009-10, and chaired the President’s Council of Economic Advisers, 2011-13. In these positions, Krueger was an instrumental advisor to the President, serving as an architect of the post-recession recovery path and of policy relating to inequality and economic mobility issues.
Former president Obama said:
“He spent the first two years of my administration helping to engineer our response to the worst financial crisis in 80 years and to successfully prevent the chaos from spiraling into a second Great Depression. He helped us return the economy to growth and sustained job creation, to bring down the deficit in a responsible way and to set the stage for wages to rise again.”
A Life, Lived
Professor Krueger set an example for scholarship and service that was both publicly engaged and intellectually searching. He believed, simply, the truth of economics would serve people. And through him, it did. His principal economic collaborator said he possessed “headlights that went a lot further in the dark than anybody else.” That is a good metaphor for vision and we here at 20/20 Vision will miss him.