Anyone who knows me, knows I don’t easily shed tears. But I did on Monday March 18th, 2019. For over an hour I wept.
On this day it was announced that Alan Krueger, beloved Princeton economist, had passed away over the weekend. (1)
Michael Mckee of Bloomberg said “He was one of the nicest people in economics, always willing to sit down and explain concepts to you, to talk with you, it’s a real shock…” Peter Coy continued, “If he were just a nice guy it would be one thing, but he was also a deep scholar…” McKee explained, “There are a lot of economists doing important work, but Krueger really had an enormous impact on public policy outcomes.” All concurred, “It’s a tragedy.” (3)
I had followed the work of Krueger for years as a financial advisor. Krueger appeared frequently on Bloomberg news, and when he did, you felt that you were in the presence of humble greatness; you had to pay extra close attention to the insights he shared because they were so incredibly valuable.
Krueger was a special person. He was an academic that used his craft to improve the lives of everyday people. In the world of finance where sycophants and talking heads worship wealth and power, Krueger stood apart.
As an example, it had long been argued by employers that raising the minimum wage would reduce the number of jobs available. As a result, wages stagnated for many years for lower skilled jobs having a negative impact on the poor and lower middle class. Krueger was able to prove through real world research and analysis, that raising the minimum wage people were paid in fact did not cost jobs. He single-handedly overturned accepted economic dogma and laid the groundwork for recent advances in raising the minimum wage.
In a 2/16/21 interview on Bloomberg, Arindrajit Dube of University Massachusetts Amherst reported his findings on the impact of a $15 minimum wage as proposed by the Biden administration. “A review of the body of evidence shows a higher minimum wage has a limited effect on the number or creation of jobs. At the same time, it raises wages and lifts people out of poverty, which is a good thing.” (6)
“While the CBO analysis shows some job loss, the wage gains far outweigh this as an economic benefit. I also think the CBO analysis is more pessimistic than what I have found.” Dube goes on to outline how some of the studies the CBO report is based upon are incorrect or false.
The host asks Dube, “what about small businesses that say they cannot afford it?” Dube explains, “I think there is some evidence a higher minimum wage results in a reallocation from lower productivity to higher productivity jobs.” In addition, I would add the bigger threat to small businesses are mega-corporations that have historically driven down profit margins for small businesses in a monopolistic fashion. To address this, requires a reexamination of our economic and social compact by our political leaders.
Thirty states and forty cities currently have a minimum wage higher than $15/hour. Many large companies have embraced a $15 starting wage since the start of 2021. (7)
Krueger’s research has had real life positive impact on the lives of workers across the country. (2)
Krueger’s most recent work consisted of examining the impact of the opioid epidemic on the work force, especially among white men. He found that more then half of the working age men not participating in the economy were due to opioid addiction. His work in raising awareness in Congress to the real economic impact opioids are having and he was a large factor in Congress taking quick action.
He was also doing a great deal of work on the Gig economy, and understanding the dynamics driving economic change.
In addition to being an esteemed researcher and academician, Krueger was a public servant. He worked as Chief Economist at the Dept of Labor under Clinton and under Obama he served as the head of the Council of Economic Advisors.
After leaving public service in 2013, Krueger returned to Princeton to teach economics and continue conducting research.
Upon hearing of Krueger’s death, I was reminded of a speech Robert Kennedy made in 1968:
“No nation can exert greater power or influence in the world than it can exercise over the streets of its own capital, and I think we have to recognize that as well. No government can sustain international law and order unless it can also do so also at home. No country can lead the fight for social justice unless its commitment to its own people is credible and determined. Unless it seeks jobs and not the dole for men, unless it feels anguish as long as any of its children are hungry, unless it believes in opportunity for all of its citizens, all across this land.
Our future may lie beyond our vision, but it is not beyond our control. Alfred Lord Tennyson once wrote, the light begins to twinkle from the rocks, the long day wanes, the slow moon climbs, the deep moans around with many voices. Come my friends, tis not too late to seek a newer world.
I come to you today to say we can build a newer and better nation. I say we can do so, that we must do so, and that we will do so.” (4)
Alan Krueger, in his actions, in his research, in his drive and passion, reflected this same love of humanity and concern for social justice. He took the abstract and made it real. He took ideas and gave them form and purpose, and in the end improved the lives of millions of people.
While my work in Socially Responsible Investing can be abstract, I too strive to have a concrete positive impact for my clients and the world we share. Alan and I shared this passion for using knowledge to effect change.
We as citizens and advocates, we have lost a great friend and ally. It is our responsibility to pick up the banner he carried and continue the advance. To finish with another bit of Tennyson,
“Though much is taken, much abides;
and though We are not now that strength
which in old days Moved earth and heaven,
that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.” (5)
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- Bloomberg, Balance of Power, 2/16/2021