New Jersey Wage Increase
The report references studies from peer reviewed sources and analyses the inconsistencies in those studies. With the state of New Jersey facing the possibility of an increment of the minimum wage in the near future, there are concerns that have been raised. Among those concerns is the potential impact of this wage rise on the employment sector. By reviewing the effect of the 1996 wage rise on the fast food industry, the people of New Jersey and other interested parties can predict how the imminent wage increment could affect the employment sector. It would be a great pleasure if this report can fulfill its purpose. A report by Alan Krueger and David Card in the year 1994 revealed that the rise of the minimum wage in the state of New Jersey had no impact on the employment industry.
However, these findings were challenged by Neumark and Wascher who discovered a change in the fast food industry. Neumark and Wascher used data from the EPI and also carried out their own research to show the impact of the minimum wage increase on the fast food industry. This paper aims to give a fresh perspective on the subject. The analysis of the ES-202 file is paired with the analysis of a longitudinal file that keeps track of established and a repeated cross section from the year 1991 to 1996(Card & Krueger, p. It comprises of information reported by employees to the Employment Security Agencies on a quarterly basis. The analysis of a longitudinal file and repeated cross sections is carried out in this paper.
The longitudinal file comprises of restaurant that belong to among the largest food chains. In these restaurants, approximately 15% of the those that are employed into the food and drinks industry are from New Jersey and Pennsylvania(Neumark & Wascher, p. The identification of the restaurants was made possible through a name search. Data collected from telephone surveys are usually not very accurate hence it is not surprising that the researchers were off the mark. However, it has also been revealed that as long as the dependent variable has the same measurement error then the estimates made in Pennsylvania and New Jersey will have no sense of bias. The standard deviation of the full time employees was also seen to be subject to a variety of variables including the scaling of the data on hours.
c) Regressions adjusted models Table 2 shows the regression estimates using the data from ES-202. The dependent variables are number of employees and the alterations in the quantity of employees. 75 from $4. 25 each hour. This rule was enforceable by law in Pennsylvania but this was not the case in the state of New Jersey. This was because the minimum wage for the state which was at $5. 05 had already surpassed the minimum authorized by the federal government. A calculation hypothesis could help in solving the problem. In the case that the establishments had continued to be used in the study with their employment equal to that of the average establishments in the sample. In that case, there would have been a growth of approximately 7% in employment in New Jersey in the year 1995-1996, a value that would still be lower than the employment growth rate of Pennsylvania (Lake, p.
Thus, the ES-202 data shows that the 1996 increment in the minimum federal wage could not have been a factor that changed the rate of employment in the quick service hotel industry in Pennsylvania as compared to New Jersey. Reanalysis of the Neumark and Wascher data set a) Genesis of the Neumark and Wascher sample The close reached from this study differed from that reached in the Neumark and Wascher research which involved the use of EPI and they also worked hand in hand with Berman. This increment in the minimum wage was due to a law that was passed by the federal government due to the influence of minimum wage on consumer price index. This year, the minimum wage was set to increase to $15 per hour and this is a move that a lot of legislative leaders are in support of.
New Jersey offers more than one million jobs in the United States of America. There have been concerns over this raise in minimum wages as there has been reports that there will have to be some retrenchments for a comfortable increment in the minimum wage for workers. The supporters of this increment in minimum wage believe that there will be no such problems accompanied by it. This acute association between the employment and price effect of an increment in the minimum wage could be severed if the restaurants in question could bring about a variation in the quality of their services. Restaurants could also change the relative prices of items that fall in their menus. Works Cited Blinder, Alan S. , and Don H.
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