The new top economist

There’s a new person — Alan Krueger from Princeton University — on the job as the chief economic adviser to the president. His appointment is important for a number of reasons, says N.C. State University economist Mike Walden.

“This is a very important appointment. Alan Krueger will head the Council of Economic Advisors. The council which he heads will advise the president on economic matters, conduct analysis, make policy recommendations.

“Generally, the president meets with… the chairperson of that council, who will be Dr. Krueger, every day. So Dr. Krueger will brief the president on economic matters.

“Interestingly. Dr. Krueger and his academic career have focused on labor markets. I think that might be one reason President Obama appointed him, because obviously jobs in the labor market are very important.

“He was — he’s been associated with a very, very noteworthy study that’s, over the years, gotten a lot of back and forth from economists where he and a colleague looked at the effect of the minimum wage on employment in fast-food restaurants. The conventional wisdom was, if you increased the minimum wage, you’ll reduce employment. His study found that increasing minimum wage in fast-food restaurants actually did not reduce employment there.

“Now this has been very controversial — went against a lot of other findings and is still hotly debated today. But Dr. Krueger’s also done work on unemployment compensation and job search.

“So he has tremendous economic skills, and I think he’ll be very valuable in advising the president in our number one priority — and that is increasing jobs.”