Pitchfork Economics: BONUS - Alan Krueger Unedited Conversation

Podcast: Pitchfork Economics with Nick Hanauer
Host: Nick Hanauer, Civic Ventures
Guest: Alan Krueger, Professor of Economics at Princeton
Date: March 22, 2019

Episode Overview

This episode is a candid, unedited interview with the late Alan Krueger, renowned Princeton economist known for his pioneering work on the minimum wage and empirical economics. Nick Hanauer, joined by colleague Stephanie Irvin, engages Krueger in a wide-ranging discussion about the origins and impact of his research, the resistance it faced from economic orthodoxy, and the broader implications for economic theory and the labor market. The conversation serves as both a tribute and a deep dive into one of the most influential economic debates of the late 20th and early 21st centuries: Does raising the minimum wage kill jobs?

Key Discussion Points and Insights

1. Remembering Alan Krueger and His Legacy [00:03–02:50]

• Nick Hanauer honors Alan Krueger, recounting his courage in challenging orthodox economic ideas and his profound impact on policy and people’s lives.
  • "He pioneered the empirical study of the minimum wage and proved beyond a shadow of a doubt that raising wages, in fact, does not kill jobs." – Nick Hanauer [00:18]
  • Emphasizes Krueger’s integrity, service, and bipartisan government career.

2. The Wall Street Journal Criticism & Scientific Orthodoxy [03:22–07:56]

• Hanauer begins with a well-known quote from economist James Buchanan that criticizes the idea that raising minimum wage could increase employment.
• Krueger recalls receiving harsh, personal attacks from Buchanan and The Wall Street Journal after his and David Card’s famous minimum wage study.
  • "The ad hominem part accused David Card and me of being camp following whores. Literally. That's what he wrote. And it was just stunning..." – Alan Krueger [06:18]
• Krueger explains that such reactions reveal insecurity and a religious devotion to economic orthodoxy, rather than openness to evidence.

3. Scientific Method and the Role of Evidence in Economics [05:14–09:38]

• Krueger emphasizes the need for empirical testing rather than dogmatic adherence to theory.
  • "To me, science is to be tested...to just assert things from principles without testing just to me makes absolutely no sense." – Alan Krueger [05:15]
• Discusses the profession's attachment to the belief that higher minimum wages harm employment and the difficulty of challenging entrenched ideas.

4. The New Jersey–Pennsylvania Minimum Wage Study [09:38–17:52]

• Hanauer and Krueger review the now-classic “natural experiment” in fast food employment.
  • Krueger recounts the genesis, design, and findings:
    • New Jersey raised its minimum wage from $4.25 to $5.05 in 1992 while Pennsylvania did not.
    • Krueger and Card compared fast food employment across the state line, finding no evidence of job loss in New Jersey; if anything, job growth was stronger.
    • Their results held even when re-examined with payroll tax and other official data.
  • The evidence contradicted the prevailing belief and stood up to subsequent scrutiny and criticism.
  • "The minimum wage increase in New Jersey didn't lead to job loss. If anything, it led to stronger job growth in New Jersey than Pennsylvania." – Alan Krueger [16:41]

5. The Logic (or Illogic) Behind the Conventional Wisdom [17:52–20:15]

• Hanauer challenges the logic that raising wages kills jobs, citing real-world business experience and pointing to the greater spending power of higher-paid workers.
  • "If it is true that raising wages kills jobs, then it must also be true that, that lowering wages increases jobs. Except if no one has any money, who will buy the stuff? Like it just makes no sense whatsoever in the real world." – Nick Hanauer [18:25]
• Krueger responds by explaining the theoretical basis:
  • Comes from highly idealized models in which labor markets are perfectly competitive and always at equilibrium, with no unemployment – conditions rarely found in reality.

Notable Quotes & Memorable Moments

• On the role of evidence in economics:
  "And he didn't want to go to the evidence. He didn't want to allow evidence to be admissible. And to me, that's an indication that you think the evidence is not strong enough." – Alan Krueger [08:10]

• On the defense of orthodox economics:
  "If you take out this block from their edifice, the whole thing crumbles." – Alan Krueger [08:34]

• On experiencing entrenched opposition:
  "Anybody...who would have been taking this stuff seriously would have said the conventional wisdom broke down. And yet what we found was more evidence that the conventional wisdom was wrong." – Alan Krueger [13:26]

• A tribute in closing:
  "We have lost an incredible human being and a force for good in the world. Super sad. Rest in peace. Alan Krueger." – Nick Hanauer [20:15]

Important Segment Timestamps

• [00:03] – Nick Hanauer’s tribute to Alan Krueger
• [04:18] – Quoting James Buchanan; discussion of the orthodoxy’s reaction
• [09:38] – Hanauer explains Krueger’s legacy; recounting the evidence and impact of minimum wage studies
• [14:43] – Krueger details the structure and findings of his seminal 1994 study
• [17:52] – Hanauer critiques the logic of the “raising wages kills jobs” argument
• [19:53] – Krueger explains where the conventional wisdom originates
• [20:15] – Episode closing and final tribute

Summary

This moving conversation is both a celebration of Alan Krueger’s contributions and a substantive dive into how and why economic ideas about the minimum wage changed—or resisted change. Listeners come away with a clear sense of the empirical revolution led by Krueger, the fierce resistance it provoked, and the continued importance of evidence-based policy in economics. The discussion is accessible, frank, and at times emotional, serving as both economic education and personal tribute.