But Clinton was persuaded finally in 1996 to raise it in stages to $5.15, in part by Card and Krueger’s paper. Krueger himself was by then working in Clinton’s administration as chief economist at the Labor Department. (Krueger would later be assistant treasury secretary for economic policy and chairman of the Council of Economic Advisers under President Barack Obama.) “Now, I’ve studied the arguments and the evidence for and against a minimum wage increase,” Clinton said in his 1995 State of the Union address. “I believe the weight of the evidence is that a modest increase does not cost jobs, and may even lure people back into the job market.” He was talking about Card and Krueger’s landmark paper.
This paradigm shift didn’t sit well with the old guard. Nobel laureate James M. Buchanan had the following comment for The Wall Street Journal:
The inverse relationship between quantity demanded and price is the core proposition in economic science, which embodies the presupposition that human choice behavior is sufficiently rational to allow predictions to be made. Just as no physicist would claim that “water runs uphill,” no self-respecting economist would claim that increases in the minimum wage increase employment … we have not yet become a bevy of camp-following whores.
It’s a matter of minor dispute whether Buchanan (of whom this magazine’s Michael Kinsley once wrote in The Wall Street Journal, “I had no idea it was so easy to win a Nobel Prize”) meant to say that Card and Krueger were “camp-following whores.” But the weight of evidence would suggest he did. Buchanan died in 2013. That same year, a survey of prominent economists by the University of Chicago, previously a mecca to libertarians like Buchanan, found that an overwhelming majority favored raising the minimum wage. Duh!
The political battle is not yet won. After Clinton increased the minimum wage, another decade would pass before it would rise to its present level under legislation signed into law by President George W. Bush. President Barack Obama ignored the issue during his first term, then pressed for ever-larger increases in his second, though to no avail. As a candidate, Donald Trump spouted a variety of conflicting positions on the minimum wage, progressing from saying it was already too high to saying it should rise to $10. But as president he never raised a finger to make that happen, partly because his top economic adviser, Larry Kudlow, adhering to the old orthodoxy, thought the minimum wage shouldn’t exist. The Biden administration’s most recent attempt to raise the minimum wage (to $15) got shot down by (guess who!) Senators Joe Manchin and Kyrsten Sinema, along with five other Democrats and Maine’s independent Angus King, although in this instance the issue was muddied by the Senate parliamentarian’s opposition to attaching it to the coronavirus relief bill. Congressional Republicans continue to block an increase, even though a March poll by Politico and Morning Consult indicated that 51 percent of Republican voters favored raising it to $11 or $15.