see if u can find an answer to this economic problem?

Question

ok soo...theres a town...its a mining town...this mine employed half the ppl int he town ..the town was doing amazing wellwhen the mine was running and then after som time the miners took out all the coal formt he town...so the mine closed ppl were un employed and this called for very very bad economic times...there are no natural resourses in thsi town...and governer has already failed to attract tourists...when i have come up with is...that the governer should reduce taxes (the laffer curve)to improve economic conditions and also raise minimum wage...now have u guys got any greeat ideas that will impress my gr 12 teacher?

Answer 1

There are towns like you describe all over the US. Most of them are ghost towns, because unless you can attract new business the people will leave. If there is a major highway nearby, you might get some manufacturing plant to locate there with tax breaks. Reducing taxes on nonexistent income and requiring minimum wage be paid on nonexistent job will have no effect.

Answer 2

Here is my problem with your question.

I am starting up a plant that makes computers, I see your town, your mining town, has people who want to work (thats good), low taxes (i like that) but i have a couple of problems.. (not including your minimum wage)

1) I don't like the fact that none of your workers know anything about making computers or computer parts
2) I am so far away from my customers, that transportation costs will kill me
3) There is no infrastructure there (?) to support me.

Now I look at Silicon Valley / Bangalore, India

- The wages are higher, quite high
- But they have a technology infrastructure, they are near my market
- People there know about making computers

Where am I going to set up my business?


The cost to your town to get me to your town, will be so large with all the things I need, which i am not going to build myself, its not worth it, and your town and the people in it are better off if they leave.

Sad fact.

You will need to offer more than tax incentives.. you will have to pick the right industries, train people etc etc