Msny of these places are already undesirable places to work in many parts of the nation because of the poor wage versus the local cost of living - which has led many to run TERRIBLY short staffed compared to target numbers, leading to losses of sales.
In my suburb of Baltimore, there's been at least a few shutdown over the past few years because they couldn't maintain staff to even keep the doors open. So maintaining the status quo is in itself (or suggesting a lower minimum wage/removing it) going to cause a "broken window" in regards to actually killing more and more businesses as the wages fail to keep up with something that people are willing to work for.
Amongst other ways to apply the analogy.
That one of course is a local problem for now, but as minimum wage stagnates with cost of living continuing to rise all over it's going to expand more and more.
So let's run with premises of your argument, namely, that low wages versus cost of living are causing businesses to close down in some areas.
Explain to me how this relates to the broken window fallacy. What is the "window" in your analogy? The businesses that are closing down? Who is the "boy," i.e. who or what is the external force breaking the metaphorical window? Finally, what is the lost opportunity cost, i.e. what is the better use to which resources would be devoted if the "window" didn't break?
Msny of these places are already undesirable places to work in many parts of the nation because of the poor wage versus the local cost of living - which has led many to run TERRIBLY short staffed compared to target numbers, leading to losses of sales.
In my suburb of Baltimore, there's been at least a few shutdown over the past few years because they couldn't maintain staff to even keep the doors open. So maintaining the status quo is in itself (or suggesting a lower minimum wage/removing it) going to cause a "broken window" in regards to actually killing more and more businesses as the wages fail to keep up with something that people are willing to work for.
Amongst other ways to apply the analogy.
That one of course is a local problem for now, but as minimum wage stagnates with cost of living continuing to rise all over it's going to expand more and more.
So let's run with premises of your argument, namely, that low wages versus cost of living are causing businesses to close down in some areas.
Explain to me how this relates to the broken window fallacy. What is the "window" in your analogy? The businesses that are closing down? Who is the "boy," i.e. who or what is the external force breaking the metaphorical window? Finally, what is the lost opportunity cost, i.e. what is the better use to which resources would be devoted if the "window" didn't break?
Window = Businesses/Economy.
Boy = Laws not adapting and creating the problem with complicit owners that take advantage of the stagnation.
Lost Opportunity Cost = The wage itself - it's both the solution and the lost benefit in this case.
Of course that's largely one of the big problems with a "broken window fallacy" is that as you move in and out to different levels of the problem it can end up reversing upon itself. It's especially clear on a micro level in this case as I explained earlier with the fact that we're losing minimum wage businesses around me because our cost of living is so high that the demand is askew so if they're not willing to pay quite a bit ahead of minimum wage there's just not a population to run their business profitably.
In many ways it can actually mirror "butterfly effect" discussion, to be quite frank. However, it is often used as a reasoning behind encouraging stasis, but that's not an absolute with it - just a common application.
I'm not really sure which side this experience really argues in favor of, but a personal experience of mine regarding the behaviors of large companies reacting to minimum wage changes is as follows.
An entry level job site(contracted call center services) run by a very large corporation who contracts out to other very large corporations and has roughly 500-600 employees at this particular site had 3 pay tiers based on position.
9.00 an hour.
9.50 an hour.
10.00 an hour.
9.50 an hour is the smallest number of people, 10.00 is the most tenured people(people generally move from the middle tier to the higher tier quickly and the middle tier is a specialized group). I would say about 50-60 people made 9.50, about 350-400 made 9.00 and 100-150 made 10.00 an hour.
This past year the state minimum wage here was raised from below 9.00 to above 9.00(9.15 or somewhere thereabouts).
As a response to that, they had to raise the bottom line pay of the larger group of the employees to 9.15.
This resulted in them needing to renegotiate their contract with their clients. Their clients refused to renegotiate the amount they paid the company as they could easy outsource to a different company in a different state with a lower minimum wage.
In response to this failure to renegotiate, the company laid off and/or fired roughly 250-300 employees. About 2/3 of the 10.00 bracket and about half of the middle bracket, the remainder from the bottom bracket. So roughly half its workforce.
The question is did this happen because companies are stingy and unwilling to pay this amount of labor, or because some states have such low minimum wage that most businesses that do not require local employees(such as phone based, computer based or shipping based jobs) find it cheaper to relocate to those select states than to maintain employment in larger states?
Is the fault with the companies, or with the minimum wage levels in some(or even all) states?
I'm genuinely not sure. I'm prone to believe that a change in minimum wage on a large scale could have potentially huge consequences to employment for people in entry level positions however. Keep in mind that although only 5%ish of people work at the minimum wage level, if half of those people were laid off in response to a wage hike then we'd be looking at a 2.5% spike in unemployment.
That is a very large number actually, as far as unemployment numbers go.
But if it was done across the entire nation unilaterally it may mitigate that by making it so that the companies cannot simply switch locations easily(unless they switched countries entirely).
Having experience with that style of situation - I'd bet pennies to pesos that corporation actually "lost the contract" to locations of their own in other states. Additionally it's the rare case of a field that's almost entirely salary based.
Most businesses that are near minimum wage are fractionally effected by payroll - food service industry for example are around 10-20% payroll for their overhead. So versus the case you quote (phone work) where 80-90% of the costs will be payroll based, they'd be impacted nearly ten times less on average by the same payroll increase. Also note that this was a symptom of your state creeping nearly $2/hr ahead of other states ($7.25 Federal minimum) if the rift was $1 the savings might not make sense to the same client - especially if it's universally raising. [And for phone work there's a big pushback against foreign call centers FYI - there's many groups boycotting companies that use foreign call centers because it's obnoxious to deal with someone with a thick foreign accent who doesn't understand the language fully...]
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So let's run with premises of your argument, namely, that low wages versus cost of living are causing businesses to close down in some areas.
Explain to me how this relates to the broken window fallacy. What is the "window" in your analogy? The businesses that are closing down? Who is the "boy," i.e. who or what is the external force breaking the metaphorical window? Finally, what is the lost opportunity cost, i.e. what is the better use to which resources would be devoted if the "window" didn't break?
Yeah, we need to keep those wagon wheel makers employed.
I'm about as much against minimum
wagenumber as you can get.calling liberals loons=not okay
The standard to which the forum moderators apply the rules here.
Window = Businesses/Economy.
Boy = Laws not adapting and creating the problem with complicit owners that take advantage of the stagnation.
Lost Opportunity Cost = The wage itself - it's both the solution and the lost benefit in this case.
Of course that's largely one of the big problems with a "broken window fallacy" is that as you move in and out to different levels of the problem it can end up reversing upon itself. It's especially clear on a micro level in this case as I explained earlier with the fact that we're losing minimum wage businesses around me because our cost of living is so high that the demand is askew so if they're not willing to pay quite a bit ahead of minimum wage there's just not a population to run their business profitably.
In many ways it can actually mirror "butterfly effect" discussion, to be quite frank. However, it is often used as a reasoning behind encouraging stasis, but that's not an absolute with it - just a common application.
An entry level job site(contracted call center services) run by a very large corporation who contracts out to other very large corporations and has roughly 500-600 employees at this particular site had 3 pay tiers based on position.
9.00 an hour.
9.50 an hour.
10.00 an hour.
9.50 an hour is the smallest number of people, 10.00 is the most tenured people(people generally move from the middle tier to the higher tier quickly and the middle tier is a specialized group). I would say about 50-60 people made 9.50, about 350-400 made 9.00 and 100-150 made 10.00 an hour.
This past year the state minimum wage here was raised from below 9.00 to above 9.00(9.15 or somewhere thereabouts).
As a response to that, they had to raise the bottom line pay of the larger group of the employees to 9.15.
This resulted in them needing to renegotiate their contract with their clients. Their clients refused to renegotiate the amount they paid the company as they could easy outsource to a different company in a different state with a lower minimum wage.
In response to this failure to renegotiate, the company laid off and/or fired roughly 250-300 employees. About 2/3 of the 10.00 bracket and about half of the middle bracket, the remainder from the bottom bracket. So roughly half its workforce.
The question is did this happen because companies are stingy and unwilling to pay this amount of labor, or because some states have such low minimum wage that most businesses that do not require local employees(such as phone based, computer based or shipping based jobs) find it cheaper to relocate to those select states than to maintain employment in larger states?
Is the fault with the companies, or with the minimum wage levels in some(or even all) states?
I'm genuinely not sure. I'm prone to believe that a change in minimum wage on a large scale could have potentially huge consequences to employment for people in entry level positions however. Keep in mind that although only 5%ish of people work at the minimum wage level, if half of those people were laid off in response to a wage hike then we'd be looking at a 2.5% spike in unemployment.
That is a very large number actually, as far as unemployment numbers go.
But if it was done across the entire nation unilaterally it may mitigate that by making it so that the companies cannot simply switch locations easily(unless they switched countries entirely).
Most businesses that are near minimum wage are fractionally effected by payroll - food service industry for example are around 10-20% payroll for their overhead. So versus the case you quote (phone work) where 80-90% of the costs will be payroll based, they'd be impacted nearly ten times less on average by the same payroll increase. Also note that this was a symptom of your state creeping nearly $2/hr ahead of other states ($7.25 Federal minimum) if the rift was $1 the savings might not make sense to the same client - especially if it's universally raising. [And for phone work there's a big pushback against foreign call centers FYI - there's many groups boycotting companies that use foreign call centers because it's obnoxious to deal with someone with a thick foreign accent who doesn't understand the language fully...]