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52 APPENDIX 5. 52 <br /> Krueger," which examined changes in employment at 410 fast-food restaurants in New Jersey and <br /> Pennsylvania, before and after New Jersey raised its minimum wage in 1992. The New Jersey increase <br /> was substantial — from $4.25 to $5.05 an hour, or 18.8%, and restaurants in neighboring eastern <br /> Pennsylvania faced no such increase. Their study found no significant differences in employment <br /> changes at these businesses across the border of the two states. Card and Krueger followed this study <br /> with a more comprehensive book,Myth and Measurement, which drove a final nail into the coffin <br /> of the textbook relationship between minimum wages and unemployment."An attempt to refute Card <br /> and Krueger's results, although seised upon by opponents of increasing minimum wages,20 was found <br /> lacking within the profession." <br /> The other part of the traditional economic theory of labor markets that has been part of the <br /> public policy debate is more explicitly ideological. The "marginal productivity theory," described <br /> above, says that workers are indeed paid according to their productivity. This has a normative <br /> implication that is difficult to avoid — that is, the market rewards people according to what they <br /> deserve, or contribute to.the economy. This belief is not just the province of economists, but has been <br /> part of the popular ideological scenery since the Industrial Revolution. Proponents of a higher <br /> minimum wage have had to contend with this precept as well, but they seem to have made some <br /> headway during the most recent debate over the federal minimum wage. This is partly due to their <br /> success in challenging the conventional stereotype of minimum wage workers as teenagers from <br /> middle class families earning some extra spending money in their spare time. The most recent increase <br /> in the Federal minimum wage directly affects more than 11.8 million workers, some three-quarters <br /> of whom are adults. About 40% of those affected are the sole breadwinners for their families.'And <br /> these figures do not include the-millions of workers earning more than$5.15 per hour whose wages <br /> are part of the"minimum wage contour,"—that is, they tend to be pushed up when the minimum <br /> wage rises. <br /> There is of course some level of the minimum wage that would actually cause employers to <br /> eliminate jobs; whether any of the living wage ordinances could reach this level remains to be seen. <br /> One major difference between some of these ordinances and minimum wage laws is that to the extent <br /> "Card and Krueger,-Mmimum Wages and Employment:A Case Study of the Fast-Food Industry in New <br /> Jersey and Pennsylvania,"American Economic Review,Vol.84,No.4,pp.772-93, 1994.Other studies of different <br /> regions in recent years reached simil conclusions:e.g.Katz and Krueger(1992),for fast-food restaurants in Texas; <br /> Spriggs and Klein(1994),for food-service businesses in Jackson.Mississippi and Greensboro,North Carolina. <br /> 19 Card and Krueger,Myth and Measurement: The New Economics of the Minimum Wage.Princeton,N.J.: <br /> Princeton University Press,(1995). <br /> 20A major study prepared in opposition to the Chicago living wage ordinance relied on the Neumark and <br /> Wascher study (cited below)to assert that"the consensus among economists is that employment declines when the <br /> minimum wage is raised."(Tolley,Bernstein,and Lesage,p.41)See also,e.g.,Richard German's op-ed against the <br /> federal minimum wage increase(Wall Street Joumal,March 29- 1996). <br /> 21 See Schmitt(1996)for a thorough review of Neumark and Wascher's(1995)failed attempt to refute Card <br /> and Krueger's research. <br /> 22 See Mishel,Lawrence,Jared Bernstein,and Edith Rasell."Who Wins With a Higher Minimum Wage?" <br /> Briefing Paper. Washington.D.C.:Economic Policy Institute, 1995. <br /> 13 <br />