Obama’s new chief economist: making up “jobs” since 1993
By D.J. McGuire | Tuesday, August 30th, 2011 | Policy, PoliticsCarrie Lukas reveals the new Chairman of the President’s Council of Economics Advisors to have a history of . . . interesting research (NRO – The Corner):
In 1993, Krueger and David Card published a study that examined employment statistics of fast-food restaurants in New Jersey and Pennsylvania following the Garden State’s minimum wage hike. The authors reported that employment at fast-food chains in New Jersey increased by 13 percent compared to restaurants across the Delaware River in Pennsylvania. Clinton administration Labor secretary Robert Reich, Senator Kerry, Senator Kennedy, and other luminaries of the Left pointed to the study’s findings to call for raising the minimum wage.
But analysis by independent researchers revealed the Krueger-Card report, which was based on a phone survey in which fast food restaurant managers and assistant managers were asked about their staff size, to be deeply flawed. The Employment Policy Institute analyzed the phone survey results against actual payroll data from the restaurants and concluded that “the data set used in the New Jersey study bears no relation to numbers drawn from payroll records of the restaurants the New Jersey study claims to cover.”
According to the Krueger-Card data set, a Burger King in New Jersey went from zero to 29 full-time workers after the minimum wage hike between February and November of 1992, while a Wendy’s in Pennsylvania reduced its workforce from 30 to zero full-time workers during the same nine-month period. Truly radical — indeed, implausible — shifts in a business’s employment strategy. When compared to actual employment records, the EPI analysis found that in one third of the restaurants surveyed, Krueger-Card even got the direction of employment change (whether staff was cut of added) wrong.
A subsequent analysis published by the National Bureau of Economic Research based on payroll records of fast-food restaurants during the same period revealed that Garden State workers experienced a 4.6 percent decrease in employment after the minimum wage hike compared to the Pennsylvania control group. In other words, they confirmed the commonsense economic principle that when something costs more, people can afford less of it. Or in the case of a minimum-wage hike, when workers cost more to employ, businesses can afford to hire fewer workers.
Ouch!
So the Adminstration best known for trumpeting jobs created in phantom Congressional Districts has tipped an economist who claim to fame is . . . trumpeting phantom jobs!
And they tell us the president will be hard to beat next year.
Cross-posted to the right-wing liberal
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4 Responses to "Obama’s new chief economist: making up “jobs” since 1993"
There was a great article in the Washington Post yesterday detailing this and other scholarly works by Krueger, although not debunking them like this post does. One of the other earth-shattering works in his c.v. is a survey he performed to determine what human activity is most pleasurable and what is least desired. Shockingly, he found that a large majority of people prefer having sex to sitting in commuter traffic. Kind of makes you wonder how much NSF grant money went into that no-brainer. And it also makes you wonder what possible economic implications there were for such a survey. Paging Eric Cantor: we have a candidate bill-payer for disaster relief.
I don’t want to sound like an anti-intellectual Neanderthal. I highly respect academic research and admire those who push the boundaries of our knowledge. But, really?
The word for this and other similar “research” is Lysenkoism (the practice of unscrupulous govt funded scientists to produce “findings” which please the ruling party). It is a mortal threat to the integrity of science. HisRoc need not apologize for condemning it.
Found this interesting.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100011744/when-debt-levels-turn-cancerous/
short version.
“Now we know where the tipping point lies. Debt becomes poisonous once it reaches 80pc to 100pc of GDP for governments, 90pc of GDP for companies, and 85pc of GDP for households. From then on, extra debt chokes growth.”
The D.C. government is suing a non-profit group to get back nearly $330,000 in grant money given for a job-training facility that was instead allegedly used to build a strip club.
A California solar-panel manufacturer once touted by President Obama as a beneficiary of his administration’s economic policies — as well as a half-billion-dollar federal loan — is laying off 1,100 workers and filing for bankruptcy.
Gibson, along with several other American icons like like Fender, Martin and Taylor, is one of the world’s leading manufacturers of fine guitars and other quality stringed instruments. It employs over 2,000 Americans. It has not borrowed a dime from the US government. Gibson’s factories were raided last week by armed Fish and Wildlife agents looking for evidence pertaining to possible violations of the Lacey Act, which makes it illegal to import foreign exotic woods sourced in violation of the laws of the country of origin. In this case Indian rosewood fingerboards pre-finished in India by Indian craftsmen in accordance with Indian law.
And Barry and the democrats wonder why the economy is tanking.
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