Report prepared for the Seattle Income Inequality Advisory Committee,
Michael Reich- UC Berkeley Professor of Economics and Director, Institute for Research on Labor and Employment, UC Berkeley
Ken Jacobs- UC Berkeley, Chair, Center for Labor Research and Education, Institute for Research on Labor and Employment
Annette Bernhardt- UC Berkeley Visiting Professor of Sociology and Visiting Researcher, Institute for Research on Labor and Employment
Paul Sonn, Brennan Center: The Brennan Center for Justice at New York University School of Law unites thinkers and advocates in pursuit of a vision of inclusive and effective democracy. Our mission is to develop and implement an innovative, nonpartisan agenda of scholarship, public education, and legal action that promotes equality and human dignity, while safeguarding fundamental freedoms.
David Card and Alan B. Krueger- Department of Economics, Princeton University Princeton, NJ; Published in The American Economic Review, Vol. 84, No. 4. (Sep., 1994), pp. 772-793.
Jonathan Diamond at Huffington Post:
“In a paper published in 1993, Princeton economists David Card and Alan Krueger (now chairman of the Council of Economic Advisors) tracked the impact of a 19 percent increase in New Jersey’s minimum wage rate, comparing its effect on employment to employment across the river in Pennsylvania, where the minimum wage remained constant at the pre-increase rate of $4.25 an hour.
It was a perfect natural experiment. The populations on either side of the Delaware were in almost all respects identical; the border between them was not a barrier to either commerce or employment. Workers from Pennsylvania were free to seek jobs in New Jersey. Business owners in New Jersey were not constrained from relocating to Pennsylvania. Customers, of course, were free to cross the bridge in search of the best deals.
What the authors found was that “contrary to the central prediction of a text book model of the minimum wage, but consistent with a growing number of studies based on cross-sectional-time series comparisons of affected and unaffected markets and employers, we find no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.” In fact, they found that employment increased after the minimum wage rose. It’s a finding that has been born out again and again.”