#17 - In a business whose owners and employees all belong

[PresidentLSAT]

Hello! I'm reading through the responses and I don't think I got the answer I was looking for. I successfully ruled out B because the presumptions were extreme. Cis still a hard sell. The conclusion in the stimulus is about financial prosperity.
C is talking about the family's prosperity. For all we know, the financial prosperity makes up a fraction of the family's overall prosperity. In my culture, for example, having more older people in your family, newborns that are boys, a huge extended family, women that married at a certain age are all viewed as signs of family prosperity. These have nothing to do with finances. I can't bring my outside knowledge into the stimulus, I'm aware.

The flaw that stood out to me was that there may be a downside to having family employees that will not compensate for its benefits-hence compromising the financial prosperity being concluded. Also, having a lower operating expense doesn't give you financial prosperity if your customer count continues to exponentially decrease or if your profits are lacking or if your waste, shrink, overall inventory are taking big hits. The stimulus gives us no context cues to link financial prosperity to the family's prosperity.

If the family's property has taken a big hit yet the family's financial prosperity is thriving because another branch has opened, how does C hold?

[PresidentLSAT]

Hello! I'm reading through the responses and I don't think I got the answer I was looking for. I successfully ruled out B because the presumptions were extreme. Cis still a hard sell. The conclusion in the stimulus is about financial prosperity.
C is talking about the family's prosperity. For all we know, the financial prosperity makes up a fraction of the family's overall prosperity. In my culture, for example, having more older people in your family, newborns that are boys, a huge extended family, women that married at a certain age are all viewed as signs of family prosperity. These have nothing to do with finances. I can't bring my outside knowledge into the stimulus, I'm aware.

The flaw that stood out to me was that there may be a downside to having family employees that will not compensate for its benefits-hence compromising the financial prosperity being concluded. Also, having a lower operating expense doesn't give you financial prosperity if your customer count continues to exponentially decrease or if your profits are lacking or if your waste, shrink, overall inventory are taking big hits. The stimulus gives us no context cues to link financial prosperity to the family's prosperity.

If the family's property has taken a big hit yet the family's financial prosperity is thriving because another branch has opened, how does C hold?

I chose E because I misinterpreted surest, which means, most reliable in this context as only.

[Adam Tyson]

For a Flaw in the Reasoning question, President, you should look for an answer that has two essential characteristics: 1) Is it true? and 2) is it a problem?

Answer C is true - the argument DID ignore that issue. Paying members low wages might contribute to lower prosperity, even if you also include other factors in determining what "prosperity" means.

And answer C is also a problem - the author should, when faced with that answer, respond by saying "oops, you're right, I didn't think about that. Sorry, my bad!" After all, the author is arguing that this practice should be a certain boost to prosperity, so if it might actually be reducing prosperity (sure, profits went up, but at a cost to the individual family members and, by extension, to the family unit), the argument looks much less convincing.

Answer E fails the first test: it's not true that the author presumed that ONLY those businesses can succeed! It's just that those with lower operating expenses have the best chances of contributing to family prosperity. Since that answer isn't true, we can eliminate it without even checking to see if it's a problem.

[Adam354]

Stimulus says family business CAN be paid low wages.
That could be true.

Answer D gives the reasoning that family members would take low wages due to a belief that it promotes prosperity.
The stimulus didn't mention anything about beliefs. It is possible the stimulus could be true, family members could be given low wages and just not be able to get another job. Doesn't mean they believe it will promote family prosperity.

Answer B is out simply bc it said lowest. Low wages doesn't mean lowest operating costs aka, low wages doesn't make them Amazon or Walmart, haha.

C It definitely may not create prosperity for some family members who get low wages. It is important to look at the family prosperity as an average of their prosperity, not as the prosperity of only the CEO. For example, if the CEO hired non family members with higher wages, and the other family members worked for other CEO's for higher wages, the total prosperity for the family may be higher.

[Rachael Wilkenfeld]

Nice analysis, Adam.

We can't pick answer choice (D) because we don't know why it is that these companies can pay family members exceptionally low wages. It could be because they believe it's good for the family overall, or it could be out of a sense of guilt.

Great work!

[BrookeLSATQUEEN]

I saw this explanation earlier “ If you increase profits in a family business by decreasing wages then you’re not really any richer. You just moved your money from one category to another. ”

In response…. If it’s the same thing, in regards to wages whether or not they get paid less in the beginning, why would it reduce family’s prosperity? I really don’t get C and I don’t like how it says reduce family prosperity.

Also is b wrong because he directly does explain how low wages lead to prosperity with evidence, and also because B says lowest, when that’s extreme ?

[Rachael Wilkenfeld]

Re answer choice (B): Exactly on point. It describes a different argument than the one in the stimulus.

Let's think about the reasoning in the stimulus by thinking about how family prosperity would work. The family could get money through wages or profits. If you decrease wages to the family members, your business might make more profits. But it's still the same amount of money coming in as if you paid fair wages to the family members. Having the money come in as profit for the company is less direct of a path toward family prosperity than direct wages would be. In any case, the amount of total money coming in doesn't change if you pay your family less. The decrease in operating costs is a decrease in wages paid.

Hope that helps!