Case Background
You work as a hired consultant for a local state government. The state government is considering increasing the minimum wage, but it is concerned that doing so may lead companies that usually employ minimum-wage workers to cut the number of employees they have. You have been tasked with helping them figure out whether or not this is a valid concern. You have been given two hours to complete your analysis and write a short report for the state government.
For your analysis, you’ve been asked to look at a dataset on wages and employment for a number of fast-food restaurants in two similar geographic locations: New Jersey (NJ) and eastern Pennsylvania (PA). The dataset contains historical data that was collected at two points in time: March 1992 and November 1992.
In March of 1992, both NJ and PA had minimum wages at the federal level of $4.25. However, on April 1, 1992, NJ raised its minimum wage to $5.05 while the minimum in PA remained at the federal level of $4.25. The local state government would like you to assess what happened to the number of employees at restaurants in your dataset between March and November for each state.
Excel Analysis. Your analysis should include the following (additional analyses welcome but not required):
Descriptive statistics for key measures.
Two bivariate tests that evaluate state differences in the changes in employment and wages between March and November (one test for employment, one test for wages).
A regression that evaluates state differences in employment change between March and November, controlling for the restaurant chain.