Who Is Alan Krueger?

He’s a professor of economics and public affairs at Princeton University and President Obama’s choice to lead the White House Council of Economic Advisers. “I have nothing but confidence in Alan as he takes on this important role as one of the leaders of my economic team,” the President said yesterday when he announced Krueger’s appointment. “I rely on the Council of Economic Advisers to provide unvarnished analysis and recommendations, not based on politics, not based on narrow interests, but based on the best evidence — based on what’s going to do the most good for the most people in this country.”

But that still leave the question: Who Is Alan Krueger? In search of a deeper answer, we can review his track record. “He served as assistant secretary for economic policy at the Treasury Department during the first two years of Obama’s administration,” reports AP. The article goes on to note:

Gregory Mankiw, a former CEA chairman under President George W. Bush and long-time acquaintance of Krueger, said Obama’s new nominee has a reputation as an analytic, data-driven economist, not as a champion for many specific policy initiatives. While Mankiw said he believes Krueger is highly-qualified for the post, he doesn’t expect him to push the administration in any new directions when it comes to tackling the nation’s economic and unemployment woes.

“This is more of a continuity appointment rather than a move-in-a-new-direction appointment,” said Mankiw, now an economics professor at Harvard University. “I don’t think the president wanted a change. He’s keeping the basic structure of the team in place.”

The LA Times advises that “Krueger is best known for his work on minimum wages. Krueger’s research with other economists, including David Card at Berkeley, showed that raising the minimum wage doesn’t lead to job losses, as is often claimed.”
Certain Republicans may beg to differ, and so there’s likely to be a fair amount of debate swirling around this dismal scientist inside the Beltway in the weeks to come. There’s certainly no shortage of written material to digest. Krueger’s paper trail is extensive, although a paper he co-authored in the early 1990s on the minimum wage is likely to receive most of the GOP’s attention. According to Krueger and his co-author:

On April 1, 1992, New Jersey’s minimum wage rose from $4.25 to $5.05 per hour. To evaluate the impact of the law we surveyed 410 fast-food restaurants in New Jersey and eastern Pennsylvania before and after the rise. Comparisons of employment growth at stores in New Jersey and Pennsylvania (where the minimum wage was constant) provide simple estimates of the effect of the higher minimum wage. We also compare employment changes at stores in New Jersey that were initially paying high wages (above $5) to the changes at lower-wage stores. We find no indication that the rise in the minimum wage reduced employment.

More recently, Krueger has warned that the labor market’s wounds aren’t likely to heal quickly. As he wrote earlier this year:

Instead of focusing on the unemployment rate, it may be better to look at the employment-to-population ratio, or the share of the population that is employed. This rate isn’t affected by whether someone is counted as in or out of the labor force.

Tellingly, the employment-to-population rate has hardly budged since reaching a low of 58.2 percent in December 2009. Last month it stood at just 58.4 percent. Even in the expansion from 2002 to 2007 the share of the population employed never reached the peak of 64.7 percent it attained before the March- November 2001 recession.

What this indicator tells me is that we weren’t creating enough jobs long before the recession that began in December 2007. If this pattern holds, even in recovery, it points to a much deeper and disturbing problem for the U.S. economy.