Why the Minimum Wage Worked

It is nearly twenty years since the landmark research of Card and Krueger on the effects of minimum wages on employment in US fast food restaurants argued that higher wages might lead to a rise in employment when there are frictions in the labour market and firms with monopsony power. Why did the minimum wage work - when basic economic theory suggests it shouldn't? Alan Krueger of Princeton University and former economic advisor to President Barack Obama explains in this short video from the 2016 Royal Economic Society conference.