Problem
1. Show the theoretical impact of how a mandatory minimum wage affects employment and salaries using a perfectly competitive labor supply and demand model.
1. The equilibrium wage and employment level without the minimum wage and the wage and employment level with the minimum wage should both be clearly labeled on your graph.
2. Recreate the graph from part (1) and add the total number of employees that receive minimum wage benefits. Describe how they gain from it.
3. Recreate the graph from part (1) and add a line showing how many workers are harmed by the minimum wage. Describe their struggles.
1. Briefly describe the effects of illegal immigration of low-skilled workers on the following groups. If the effect is unclear, describe why. Explain why the theoretical impact is certain if it is.
1. Unlawful immigrants with poor skill levels who are relocating.
2. Low-skilled indigenous who go off against immigration.
3. Natives with high talent levels who are not in competition with immigrants.
4. Firms
1. Data Analysis
You will use information from the Current Population Survey on labor force statistics for this set of problems.
You can create these numbers as you choose, however I find the 1-screen interface for the labor force statistics CPS data to be the most convenient. If you are experiencing technological issues, go to my recommendations for using the BLS data that are available on Blackboard.
1. Make a series of the seasonal adjustment to the monthly unemployment rate from 1948 to the present.
1. For the following demographic groupings, compile the same kind of unemployment rate record from 1948 to the present: Make careful to reset the other characteristics for each demographic category. For example, you should establish the unemployment rate series for all Hispanics, not just Hispanic Men.
1. Men
2. Women
3. African Americans
4. Hispanic ethnicity (all races)
5. People aged 16-17.
1. Based on the figures you created answer the following questions.
1. How did the pandemic era differ from previous recessions?
2. What differences do different demographic groups' unemployment rates show? Who has the worst unemployment rate among the groups you looked at?
2. You may determine the unemployment rate for specific demographic groups using the CPS data. For instance, you can determine the unemployment rate for married, Black women who are at least 25 years old. Try to identify the racial and ethnic groupings with the highest and lowest unemployment rates using the CPS data. Report the two categories you identified together with their most recent month's unemployment rates. The only method to answer this question is to make educated guesses about various demographic pairings and then examine the unemployment rates. Although finding the demographic category with the lowest/highest unemployment rates won't affect your grade, you should try your hardest.
You should be aware that the data tool prevents you from viewing some demographic combinations. For instance, until you have the age option set to "25 years and beyond," you cannot look at education levels.