Critique of Minimum Wages and Employment Study

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A Critique of Minimum Wages and Employment: A Case Study of the Fast-food Industry in New Jersey and Pennsylvania Anthony Bolanos College of Business – Department of Management MBAA 522 – Business Research Methods Prof. Arnold Witchel Embry Riddle Aeronautical University Worldwide Abstract This report conducts a critique on a study published by Card and Krueger in 1994. Such study argues that an increase in minimum wage in the state of New Jersey had no negative impact on its fast-food industry employment rate. The study uses a survey as primary means of collecting its data. This is accomplished by conducting over the phone and personal interviews to participants with the help of a questionnaire. In the study, the authors use regression analysis as a statistical measure to correlate wage levels to employment rate. This critique argues that collecting employees payrolls would have been a more efficient and reliable method of acquiring data. Also, this report mentions that Card and Krueger’s study failed to properly defined terms operationally to avoid ambiguity and confusion. Finally, the study serves as a benchmark for future businesses developing research designs by showing possible mistakes and how to avoid them. After reading the study of the minimum wage increase in New Jersey and its effect on employment conducted by David Card and Alan B. Krueger in 1992 and published in September 1994, I have identify a few factors that could change the results obtained. The study focuses on how a minimum wage rise, from $4.25 to $5.05 in the state of New Jersey, affected employment statistics before and after the change was implemented. This type of study is defined as a descriptive research, where the interaction of two or more variables is related through answering the questions who, what, when, where, and how (Cooper & Schindler, 2014). In

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