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Zing!
I love it when Greg Mankiw gets nasty.
Robert Reich says that, as a requirement for free trade deals, we should tell developing countries to "set a minimum wage that's half their median wage." The proposal raises two questions in my mind:
1. Does Reich pay his nanny, cleaning person, and gardener more than half the median wage of members of his family?
2. If not, should I refuse to buy his books?
Posted by Alex Tabarrok on February 21, 2007 at 02:14 PM in Economics | Permalink
Comments
It was one of the best zing's i have read all day, too bad that it made me rather disappointed with Greg.
I read Robert Reich's free trade post yesterday, and thought it had some interesting ideas. I was looking forward to seeing what people like N-dot had to say about it. I was hoping some some actually intellectual content, some debate, but we got a zing.
Oh well, maybe next time...
Posted by: Cameron mulder at Feb 21, 2007 2:52:54 PM
Doesn't really work. He's not saying they should set a median to half the US's minimum wage.
Posted by: badger at Feb 21, 2007 2:55:19 PM
badger, I don't think that's right, at least unless Reich can also justify why a particular country is the right level of analysis.
The problem with the zinger - enjoyable though it may be - is that it doesn't really dejustify Reich's argument (which I personally find silly). Not living a principle you believe ought to be enacted into law says nothing whatsoever about the desirability of having that principle as law. Individual choice is made within the context of current institutions. If Reich acted contrary to the law he advocated passing AFTER IT WAS PASSED it would be a different matter entirely.
Nozick benefited from rent control laws.
And for that matter I drive on government roads though I'd much prefer they were private. That hardly means my arguments for toll roads are wrong.
Still, it's funny.
And Reich is a disingenuous hack.
Posted by: Gary at Feb 21, 2007 3:03:53 PM
The question should be whether he pays his nanny, gardener and cleaning person half the median wage in the US, which would be between $8 and $9 per hour. That actually is probably in the neighborhood of what he pays his nanny, gardener and cleaning person. So basically, whether or not Reich said something stupid (I have yet to read what he has written), Mankiw's comments don't even succeed in being a clever zing.
Posted by: Aaron Fix at Feb 21, 2007 3:27:28 PM
No, Aaron_Fix, the question shouldn't be that. The other point of Alex_Tabarrok's zinger was the
arbitrariness (arbitrarity?) of choosing the target country as the appropriate pool to compare min. wages to.
Why not the US? Why not Connecticut? Why not the administration of that country? Why not ...
Robert_Reich's family?
Posted by: Person at Feb 21, 2007 3:32:16 PM
Gary,
My impression has always been that Reich is a sincere hack.
See: nearly everything Krugman wrote in the mid 1990s.
Posted by: cspaley at Feb 21, 2007 3:46:16 PM
i dunno about reich, but my gardner owns a nice house. And I know a lot of people on the margin where their nanny's salary + employment taxes is roughly equal to their after-tax second income. so i don't think this zinger works.
Posted by: DK at Feb 21, 2007 4:51:28 PM
No one should buy a Reich book until the price is half the average for comic books.
Posted by: Tia at Feb 21, 2007 5:27:44 PM
He has a book?
Posted by: rick at Feb 21, 2007 6:06:06 PM
a stupid non-zing that is an inappropriate comparison and indicates the prof is probably not ready for tenure at that school.
Why not pay squat to Indian IT folks and put courses online and get rid of overly expensive Harvard profs?
Posted by: david still at Feb 21, 2007 7:54:30 PM
Actually, the outsourced jobs tend to be very well paying jobs by the standards of the host countries. People upskill and then line up around the block to try to obtain these jobs. I don't think any serious person denies this. They're almost certainly well above the median.
Robert Riech is acting as a glib protectionist in this quote. I don't see what case can be made that when a US company wants to pay relatively nice wages to some of the more desirable employees of a generally poor country, they should be forbidden to do so if the remainder of the employees of that country are too poor.
-dk
Posted by: Dick King at Feb 21, 2007 8:06:56 PM
Person,
I guess I was giving Prof. Mankiw the benefit of the doubt. I think he would acknowledge that, in deciding the level of min. wage, the level of wages in the target country would be a much better tool (probably the best) and not arbitrary at all. If I interpret the "zing" your way, Prof. Mankiw looks downright stupid.
Posted by: Aaron Fix at Feb 21, 2007 9:04:29 PM
If I interpret the "zing" your way, Prof. Mankiw looks downright stupid.
Zing!
Posted by: mk at Feb 21, 2007 9:12:26 PM
Has anyone else noticed that Mankiw's zing doesn't make sense at the individual level?
Paying someone half of *your* median household income means that, say, a married couple would have to spend about 75% of their combined annual income to employ a nanny, cleaner and gardener.
I doubt anyone would hire a housestaff if the cost was so steep.
Posted by: Anon at Feb 22, 2007 12:48:57 AM
So does Reich pay his cleaning person less than half of what he pays his gardener?
Zing!
Posted by: Barbar at Feb 22, 2007 8:09:21 AM
Aaron_Fix: I guess I was giving Prof. Mankiw the benefit of the doubt. I think he would acknowledge that, in deciding the level of min. wage, the level of wages in the target country would be a much better tool (probably the best) and not arbitrary at all.
No, he wouldn't. Why is it a "better" tool? What makes something "better" in this context?
You're assuming your conclusion -- and revealing ignorance of issues on top of that!
Posted by: Person at Feb 22, 2007 10:17:53 AM
Alex Tabarrok lowers the intellectual level of this blog and, frankly, provides a disincentive for visits. Here he finds a delightful "Zing!" in what is a rare (and embarrassing) moment of silliness on the part of Professor Mankiw. I guess Tabarrok instantly recognizes his own style of blogging in Mankiw's gaffe and thus approvingly links to it. For shame. Is there a way to alter settings so that I don't see Tabarrok's blog entries? I did the same at Volokh to avoid seeing David Bernstein's inanity.
Posted by: grad student at Feb 22, 2007 12:04:21 PM
Reich could always get back on Mankiw's good side by endorsing higher gasoline taxes.
Posted by: shecky at Feb 22, 2007 2:56:06 PM
Does Greg Mankiw in fact know for certain that Robert Reich actually employs a nanny, cleaning person, and gardener?
Posted by: triticale at Feb 22, 2007 9:39:50 PM
Reich is convinced that coercion is the solution to many problems. But the truth is that poor countries already have plenty of coercion.
What these countries need is institutions that make coercion and corruption more difficult to perpetrate, that enforce contracts and that make capital formation and property ownership possible or easier. Then businesses form that hire people and become the competition that raises wages.
Posted by: Alan Brown at Feb 23, 2007 4:18:48 PM
grad student,
Grow up, then come back. All will be better then.
Posted by: Tom at Feb 23, 2007 4:22:24 PM
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