You have been asked to serve as a consultant and expert witness for a wage-discrimination lawsuit. A group of Latino and black women have filed the suit against their company, Amalgamated Distributors, Inc. The women, who have between 5 and 25 years of service with the company, allege that the average rate of their annual wage increase has been significantly less than that of a group of white males and a group of white females.
The jobs for all three groups contain a variety of administrative, analytical, and managerial components. All the employees began with a bachelor's degree, and years of experience is an important factor for predicting job performance and worker productivity. You have been provided with the present monthly wages and the years of experience for all workers in the three groups.
In addition, the data indicate those in all three groups who have obtained an MBA degree.
a. Develop a statistical model and analysis that can be used to analyze the data. Indicate hypothesis tests that can be used to provide strong evidence of wage discrimination if wage discrimination exists. The company has also hired a statistician as a consultant and expert witness. Describe your analysis completely and clearly.
b. Assume that your hypothesis tests result in strong evidence that supports your clients' claim. Briefly summarize the key points that you will make in your expert witness testimony to the court. The company's lawyer can be expected to cross-examine you with the help of a statistician who teaches statistics at a prestigious liberal arts college.