It usually doesn’t require the award of a Nobel Prize to demonstrate how wrong-headed Pennsylvania state legislators can be in crafting public policy based on their own ideology rather than the public interest.
But such a Nobel Prize, in economics, was awarded Monday to David Card of the University of California, Berkeley. He shared the prize with economists Joshua D. Angrist of Stanford University and Guido W. Imbens of the Massachusetts Institute of Technology.
Card, working with the late Alan B. Kreuger of Princeton University, and Imbens and Angrist as a team, were awarded the prize for revolutionizing the practice of labor economics by relying on “natural experiments” in the real world rather than randomized experiments and theoretical models.
Card’s study is directly significant for Pennsylvania. He and Kreuger took advantage of a policy difference between Pennsylvania and New Jersey in the 1990s to assess the impact of minimum-wage increases. At that time, governments and economists assumed that minimum-wage increases automatically result in some job displacement for low-income workers.
In 1992 New Jersey raised its minimum wage by 18.8%, from $4.25 to $5.05 an hour, whereas Pennsylvania kept its minimum wage at $4.25. The economists studied the impact on fast-food restaurant employment in New Jersey and Eastern Pennsylvania, and found that the higher minimum produced a slight increase in employment in New Jersey compared with Pennsylvania. They also assessed nonrestaurant low-wage businesses in New Jersey, and found that it did not adversely affect employment.
Now, Republican majorities in the state Legislature stubbornly cling to the discredited notion that a higher minimum wage in Pennsylvania will harm businesses and workers despite the Nobel-winning work, and despite the current experience of every state in the Northeast — other than Pennsylvania — that has raised its minimum wage rate in recent years.
For rejecting that evidence, state lawmakers would be shoo-ins if the Nobel committee honored intransigence.
— Scranton Times-Tribune
