Nanny Nanny Boo Boo

I guess this is why I never got that call from the New York Times.

To be a Times contributor, you apparently have to write like Mara Gay, who penned these lines for a front page article last week:

New York may soon become the first state to offer employment protection for nannies.

The state Senate passed a bill of rights for domestic workers this week, a measure that would require employers to offer New York’s approximately 200,000 household workers paid holidays, overtime pay and sick days.

Supporters say the step will provide needed relief to thousands of women — and some men — who are helping to raise the children of wealthier New Yorkers without any legal workplace rights beyond the federal minimum wage.

Now, you see, if I had been writing this article, it might have opened more like this:

New York state may soon become the first state to restrict employment opportunities for nannies.

The state Senate passed a bill this week that would prohibit New York’s approximately 200,000 household workers from accepting any position that does not include paid holidays, overtime pay and sick days.

Opponents say the step will bring unnecessary hardship to thousands of women—and some men—who have found employment because of labor markets that operate freely, except for constraints imposed by the federal minimum wage.

A more neutral observer might have noted that this bill, if passed, will be good for some of those nannies who retain their jobs, bad for the many nannies who will be driven out of the business, and extremely good for people like Ai-jen Poo, director of the National Domestic Workers Alliance, who will represent the winners and can conveniently ignore the losers. Instead, Ms. Poo is quoted, without apparent irony, as calling the measure “a huge step forward in reversing the long history of exclusion that domestic workers face.”

Query: Are the editors at the Times genuinely oblivious to this kind of bias? Or do they just not care?


40 Responses to “Nanny Nanny Boo Boo”

  1. 1 1 Ricardo

    But the way you propose is also biased. To be fair, the article would have needed to address both sides of the question, yours and Mara Gay’s.

  2. 2 2 simply scott

    Funny! I’m standing here trying to figure out how to argue this point with you, only I don’t recall reading an article anywhere about how nanny in wealthy NY households are being horribly mistreated and enslaved. Sounds like NY has just legislated the “letting go” of a large number of successful and probably content employees. I really don’t see any other way to look at it, even though I’m trying not to come at this from an economics standpoint since I’m not an economist.

    I suppose, if nannying was really terrible, they would have unionized, or something to that effect, for rights and “fair employment”, but I don’t think that’s the case either.

  3. 3 3 Henry

    Well, often labour regulations are justified on some kind of “market power” story. However in this case, seeing monopolistic collusion amongst upper-income households strikes me as rather paranoid.

  4. 4 4 AC

    They are oblivious and they do not care.

  5. 5 5 Phil

    First, it’s a case of “what is seen and what is not seen.” They see the nannies that keep their jobs with higher pay, but not the ones who lose their jobs. Nobody is forcing them to consider the logic of what is not seen.

    If you pretend the unseen, unhired nannies don’t exist, it lets you feel really good about yourself. “Look at those conservatives abandoning nannies,” they think. It’s more fun to feel that you’re noble and your opponents are evil than to consider that your opponents are no more unfeeling as you, but are taking the time to think things through.

    Also, if you’re guided by your own emotions, it’s easier to feel bad for a known person than an unknown person. “Existing nannies have to go with less money when they’re ill” makes you feel worse than “Some unknown people in the future won’t be able to find a job as a nanny.”

    And for some people, “some families now won’t choose a nanny because the option is too expensive now” is a feature, not a bug. “If they’re going to punish their nanny for being sick, they’re mean, and let those lazy people take care of their own kids.”

    Also, nannies are poorer than employers. Transfers from rich to poor generally make people feel good.

    And, if you think neutrally about this one issue, then it occurs to you, perhaps weakly, that you also have to revisit your original positions on a whole bunch of other issues — rent control, minimum wage, unions, and so on. People will resist anything that seems to suggest they’re wrong about strong beliefs they already have.

    Finally, because arguments like yours are what heartless conservatives say, the Times believes it must be THOSE arguments that are biased.

    So, on the Times’ side:

    – you don’t have to think too hard
    – you get to feel noble
    – you avoid having to rethink a lot of things you strongly believe
    – you get to advocate transfers from rich to poor
    – you get to feel sympathy for people who vividly exist
    – you get to disagree with evil conservatives.

  6. 6 6 Ken B

    Oblivious. It’s like last week when you wrote about $300B deadweight. That was funny coming from a writer who cares about teaching because of course most people have no conception that gov’t spending has negative consequences at all.

  7. 7 7 Noah Yetter

    Oblivious. These people — journalists, New Yorkers, people generally — believe that laws purported to benefit “the worker” always do and never have any side effects or unintended consequences (never mind that some of those consequences may be intended after all).

  8. 8 8 Xan

    How many nannies are actually on the government’s radar? I imagine that, like babysitters, many do not report their income to the govt. To the extent that this will induce them to, the govt may be able to get more tax revenue. But there will also be those nannies for whom it is still not worth it to let uncle sam know…if they want those extra sick days to be legally required, they have to first admit to the law that they are nannies. So, this law does not directly hinder: (a) nannnies for whom the additional benefits do not outweigh the taxes they would then have to pay, and (b) nannies who would otherwise be driven out of the business.

    If most nannies were not reporting to the government before, then there’s nothing to stop them from continuing to accept the same old jobs.

  9. 9 9 nobody.really

    … this bill, if passed, will be good for some of those nannies who retain their jobs, bad for the many nannies who will be driven out of the business….

    I hope someone tries to measure this. I share Landsburg’s view that nannies are employed under a variety of employment circumstances. But I also share Xan’s suspicion that most marginally employed nannies work off-the-books. I suspect many are undocumented aliens paid in cash. Given that this population is unlikely to seek legal recourse, I rather doubt that this law – or any law – will have much effect on their employment relationships.

    So what consequence would this law tend to have on the upper end of the nanny market? Because people regard wages as sticky, I’d guess that it would have the effect of strengthening these nannies’ bargaining positions for a period. Over time I would expect 100% of the cost of this policy to be offset by forgone wage increases for legally-employed nannies. I would expect to see some shift in nanny employment from legal to illegal. I would expect to see some shift from day care provided by nannies to day care provided by relatives on the one hand, and institutions on the other. And I would expect to see some shift in welfare from nannies that are prone to health to nannies that are prone to illness – in effect, forming a kind of nanny health insurance pool financed by nannies.

    But I would not expect to see any dramatic collapse in the labor market for nannies.

  10. 10 10 nobody.really

    … labor markets that operate freely, except for constraints imposed by the federal minimum wage.

    OSHA regulations? National Labor Relations Act? Child labor laws? Unemployment insurance? Civil rights laws? Credentialization requirements? Prohibitions on prostitution, certain pornography, certain recreational drug production and selling, other criminalized activities, a certain amount of surrogate mothering? Prohibitions on firing employees serving in the National Guard? Immigration laws? 15th Amendment prohibition on selling yourself into slavery (except with regard to the military)?

    I sense a recurring black/white narrative in some libertarian circles: We had this idealized world, but now someone’s proposing an ideal that will tamper with that purity and lead to the apocalypse! I find it more useful to think that we have a word of some shade of grey. That someone’s proposing an idea that, at least arguably, results in a slightly darker shade of grey. That, notwithstanding the many ways we tamper with markets, they remain remarkably resilient and US markets remain among the most competitive in the world. That people who try to characterize more/less discussions as black/white discussions are engaged in politics, not economics.

  11. 11 11 TjD


    care to quantify the ‘”many” nannies who will be driven out of the business’ ? Its not like there are many other alternatives near the price point of a nanny. The reason you wouldnt get hired by the NYT is because you stop thinking when it gets inconvenient..


  12. 12 12 neil wilson

    I am sure that all the miner’s families in West Virginia wish more of their loved ones died in mines the way things worked before we had regulations on safety.

    I am sure you agree with Milton Friedman that lawsuits will prevent companies from operating in an unsafe manner.

    I agree that you have a point that needless regulations can hurt people. However, I don’t think you have a clue that the other side has a point too. You help a lot of people a little bit by having regulations for paid holidays. You hurt a few people a lot by making it impossible to get a job because of the regulations. Which is better? I don’t know. You seem to believe that no regulation is good regulation. That is an absurd idea. I don’t know why you weaken your arguments by going to such absurd extremes.

  13. 13 13 Xan

    @nobody.really: Perhaps I should clarify that my previous comment, while perhaps an interesting thing to think about, doesn’t really go against the actual point of Prof. Landsburg’s post. It is possible to construct many arguments about different effects this law may have, but the bigger question is why the Times does not care to consider the standard argument (or really any complete argument) at all.

    Suppose person X argues that the law will have a positive effect on some variable, without considering the basic forces at play. Then suppose Person Y comes along and attacks X’s argument, and then person Z says there’s even more to consider still. Adding on additional complications may get us even closer to the truth in expectation, but it is _not_ a valid counterattack to Y’s attack on X. It does not cripple Y’s claim that X has failed to consider something obvious.

    An argument’s soundness does not rest on the actual truth. If X turns out to be correct, it does not prove her argument sound. To the contrary, she is simply lucky.

  14. 14 14 GregS

    I’m sure the politicians who wrote this law are experts in the area of nanny employment contracts, and that they did a thorough efficiency calculation to ensure that the benefits of the policy outweigh the costs. Obviously I’m being snarky. Seriously, though, it is delusional to think that you can improve someone’s life by restricting that person’s freedom to decide the terms of the contracts they enter.
    I’ll point out, as I have before, that it’s totally lame to point out that similar laws exist in a discussion about whether or not a law is beneficial. This is largely a discussion of what the law OUGHT to be, not what it already is.
    A very rough but generally correct rule: if a term of a contract is worth more to one party than it costs another party to provide, that term will go into the contract. If a feature costs less to provide than its dollar value to the consumer, the product will carry that feature. If an employee amenity (like air conditioning, or a safety measure, or paid vacation) is worth more to the employee than it costs the employer to provide, the amenity will be provided and the employee will bear the cost in reduced wages. Laws like this nanny law essentially force people to purchase features and (“purchased” through reduced wages) employment conditions that cost more to produce than their value to the recipient. Laws like this hurt both parties…consumers AND producers, employers AND employees. (David Friedman describes this principle very nicely in the language of supply and demand curves in his book “Hidden Order”.)

  15. 15 15 Alan Wexelblat

    Other than it happened to appear on the front page of the NY Times, why are we restricting this discussion to nannies? Surely the same logic would go to say that other professions also should not have these benefits.

    Let us, therefore, begin a campaign to take away paid holidays, overtime pay(*), and sick days from teachers, doctors, nurses, and especially university professors as this will most certainly improve the lots of all of them.

    (*) Yes, I’m aware that salaried workers generally don’t get overtime pay. But if you get to be hyperbolic then I feel I should be as well.

  16. 16 16 static vars

    Wouldn’t this just cause a drop in bill rates? Most Nannies are well over minimum wage. As indedepent contractors, the sticky wage problem is not severe. Of course, the union will do their best on that one, and ultimately, fewer people will get what what they want.

  17. 17 17 Brian G

    The state legislature may be responding to some perceived unfairness in the nanny labor market. This seems possible to me if the costs of finding a nanny job are high. If households don’t face a lot of competition with one another because it is too expensive for a prospective nanny to turn down an offer (ie search costs, location costs, etc.) than Henry’s suggestion might not be so paranoid. Regardless though, the proposed fix doesn’t strike me as a very efficient way to deal with a problem like this.

  18. 18 18 EricK

    GregS:”Seriously, though, it is delusional to think that you can improve someone’s life by restricting that person’s freedom to decide the terms of the contracts they enter.”

    While this may be true if that individual is the only person who is restricted, it is not obviously true if everybody else is restricted in the same way. I can well imagine, for instance, that Coca Cola would be worse off if they were banned from advertising. However they might very well be better off if all other soft drink manufacturers were also banned from doing it.

  19. 19 19 Steve Landsburg

    Brian G: Even if each nanny has only one potential employer, why would you expect that nanny to be better off with the state dictating her mix of benefits and salary? How can she benefit from being forbidden to offer to take less vacation in exchange for more pay?

  20. 20 20 Ken B

    Well in general I like freedom of contract, and GregS is right almost all the time in practial terms, but as a matter of logic, EricK is right and GregS is wrong. Cartelization is one example, and there are also examples in game theory where you can benefit from being unable to choose one of your options. We are bidding for a chocolate bar, and I rig myself with a nuke that expodes unless my brain detects chocolate flavor. Bet I get the bar, even thoug I have given up options here. (google incredible threat or precommitment for more).

  21. 21 21 GregS

    KenB and EricK: Point taken. I’m aware that there are some game theory problems in which collusion between players leads to an optimum outcome. The obvious example being the Prisoner’s Dilemma, in which both prisoners would do well to collude and fix their strategies. I don’t believe that advertising is an example of a prisoner’s dilemma as EricK suggests. My local cable company has a monopoly on cable TV and (I think) internet service, and it advertises heavily. (There may be a component of advertising that is an arms race against your competitor, but there is probably a much larger component that is simply necessary to inform your customers of your business.)
    Employment contracts are not analogous to a prisoner’s dilemma…we would not all be better off if we all suddenly went on strike and refused to work until our demands were met. The result of that would be higher wages for some and lost employment for others (and time wasted by unemployed individuals attempting to get a job where the wage is artificially higher than the true market wage).
    You must keep careful track of how reality deviates from your model. A simple look at the prisoner’s dilemma might lead someone to think “Ah, simply force the prisoners to cooperate! Apply this principle broadly to the real world.” (I’m sympathetic with this approach.) But start adding things to your model, like the cost of supplying the enforcer, and the probability of the enforcer making an incorrect decision. Elinor Ostrom sort of does this in the first chapter of her book “Governing the Commons.” The infinitely wise and powerful enforcer is a handy solution to some game theory problems, but the prospect of granting a human being his power is frightening. You should be more skeptical that creating him is a good idea.

  22. 22 22 Bob

    Steve writes: “A more neutral observer might have noted that this bill, if passed, will be good for some of those nannies who retain their jobs, bad for the many nannies who will be driven out of the business”

    Good ol’ neil wilson then favors us with “I don’t think you have a clue that the other side has a point too.”

    I do so treasure your contribution to this blog, neil.

  23. 23 23 Bob

    I sense a recurring black/white narrative in some libertarian circles: We had this idealized world, but now someone’s proposing an ideal that will tamper with that purity and lead to the apocalypse! I find it more useful to think that we have a word of some shade of grey. That someone’s proposing an idea that, at least arguably, results in a slightly darker shade of grey. That, notwithstanding the many ways we tamper with markets, they remain remarkably resilient and US markets remain among the most competitive in the world.

    Might one of the reasons for that be that the US tampers relatively less with its market, perhaps because of the very apocalypse-fearers you mock?

  24. 24 24 Harold

    Every “interference” will have some costs and some benefits. The article mentioned seems to ignore any potential costs associated with this policy, I suspect it is the “oblivious” option. The benefits are seen as obvious and the costs as insignificant in comparison. It is viewed in the same way as “murder rate down” – there is no downside.

    I personally feel that the costs associated with some modest employment law is not very great, and the benefits may easily outweigh the costs. Must we assume these jobs are minimum wage? Otherwise, presumably the costs of paid holiday etc. could just be passed on by reduction in wages. If this is the case, then domestic workers are effectively currently on less than minimum wage, as other employment areas do include these costs. (Am I right here in thinking that these proposed laws is to give domestic work the same status as most other work?)

    The market does not apparently exhibit monopsony because the employers are not organised. But there is a very simple way for the employers to act as though they were organised into an effective monopoly. This is the absolute floor beneath which workers simply cannot survive. This information can be disseminated easily through informal networks of employers, such as coffee mornings. At this level, the supply of work is not related to wages, there is no slope to the supply curve. If there are sufficient low-paid, unskilled workers, is it not possible for their wages to remain below the “equilibrium” position as they must take it or starve? They could be providing much greater value than they are receiving.

    This provides a justification for the minimum wage (if it has any validity). And if you can justify the minimum wage, then why should domestic workers be singled out for less than minimum wage i.e. without the fringe benefits?

    This seems such an obvious flaw in the simple economic theory explanation of wages that I feel sure that there is a very simple rebuttal. Someone put me out of my misery.

  25. 25 25 Super-Fly

    From my experience, I think many people tend to have the idea in their heads that a person has a set occupation. People don’t seem to acknowledge the fact that people can (and do) change jobs. Many people see a nanny as a person and not as an occupation. Even though that sounds like a nice thing, is it more important to help the nanny or to help the person? If they get a better offer at another place, I’m sure they will be more than happy to take it.

    This is also similar to a personal experience I’ve had as a student employee at the university library. Any employee in New York making an hourly wage is mandated to take a half hour unpaid meal break if they work more than 6 consecutive hours. At my job the workers can eat on their shifts, but as a result, there were times when I wanted to work, but I couldn’t because they wouldn’t let me.* Who is the law helping? Why can’t I voluntarily waive my break and still work? And why am I noticing a pattern with New York and crappy laws that I hate?

    *Side note, whenever someone wanted to give up their shift at the library, we would just find ways around the law. For example, one time at night, when my boss wasn’t there, another worker gave me her shift, signed in on the time-sheet, but then gave me the cash she would have made. I think that says something about how dumb the law is if the people who its designed to help go out of their way to break it.

  26. 26 26 Neil

    This is run-of-the-mill “widows and orphans” legislation. Widows and orphans are no longer the leading sympathy-inducing groups, but the principle is the same. Legislate for special interests, and appeal to people’s empathy to numb the opposition.

  27. 27 27 EricK

    Consider two extreme scenarios:
    In the first, there are many people who want nannies, and relatively few who want to be nannies and have the capable skills. Here everybody wants to be a nanny gets to be a nanny, and because of their scarcity, the going rate for nannies is much more than the minimum they would accept for doing the job, but at about the maximum level people are prepared to pay for nannies. There are also a number of people who go nannyless.

    In the second, there many people who want to be nannies, but relatively few potential employers. In this case, the reverse happens: Everybody who wants a nanny has one, and the going rate is near the minimum that nannies will accept, but much less than the maximum people would be prepared to pay. There are also a number of unemployed (or otherwise employed nannies).

    For a mandated rise in the benefits for nannies to lead to unemployed nannies, we would need to be in something like scenario 1, where the last person to employ a nanny, can already only just afford the going rate, so can’t afford the increase. But in this scenario, the package for nannies will already be very good.

    If however we are near scenario 2, the employers might very well all stump up to pay for the increase, and any negative effects would be spread across other industries. Here, every nanny would benefit.

  28. 28 28 Harold

    Some enforced work practices can have a benefit on productivity. If one takes regular breaks, then productivity usually rises. Removing your “right” to not take a break may help everyone. So why don’t employers enforce their own compulsory breaks? Maybe they just don’t believe it. People do not always make descisions that will lead to their optimum outcome.

  29. 29 29 CB

    Prof Landsburg criticises the legislation for denying nannies the choice to enter into contracts where the benefits are less. Presumably there is the implication that more benefits means lower wages, or less employment opportunities.

    But this makes me wonder whether actually such free choice ever existed. Surely the relative power (worker v employer) is much greater on the employers side? After all, nannies are mostly homogeneous and easily substitutable.

    I am highly sceptical that there ever existed the freedom for nannies to enter into contracts where the benefits were greater. This equality of negotiating power seems an idealistic fantasy.

    Surely then, there exists now *greater* freedom with the law in place because nannies can now either accept the benefits, or by mutual agreement, decline some of them so they can give themselves a competitive advantage?

    Surely by offering nannies the opportunity to bargain down from a high opening position, as opposed to the impossible task of bargaining up from a low opening position, the law increases the flexibility of labour markets?

  30. 30 30 Chicago Methods

    It’s amazing to see so many people here twist and contort reality to best serve their own viewpoint. It’s almost as if I’m witnessing the Life of Brian skit where Loretta, a man, wants to have babies. Then witnessing everyone agree that, theroetically, Loretta deserves the right to have children. It’s absolutly incredible.

    The first glaring example I saw was the comment about how the world is not black and white, so the libertarian viewpoint shouldn’t be considered. Well, the law of marginal utility pretty much shows us that the world is, indeed, a shade of grey and it is very much incorporated into our economic models – and in the libertarian persepective as well. The most hardcore libertarian viewpoint is that you can do pretty much whatever you want as long as you don’t harm someone elses well-being; that’s about as grey as you can get.

    Personally I’m not a hardcore libertarian because Game Theory has shown us, through the prisoner’s delemma, that market failures do exist. In fact one siginificant paradox showed that people who run businesses offered no reason to create quality work. I can’t remember the specifics off the top of my head, but it involved a car dealership selling poorly designed cars. Joseph Stigler got his nobel for solving this prardox. He pointed out that people find specific ways to identify credible people through screening and signaling. However, I’m digressing; my point is simply to show that I, personally, am not a libertarian.

    However, regarding Game Theory; someone mentioned that Game Theory shows us that restricting choices may be a good thing – this is certainly true. However, I’d avise people to stray away from such an arrogent and (my personal opinion) know-it-all approach to this subject. Game Theory also shows us that there is always a bigger game. Since we are so interested in hypotheticals and analogies here, I’ll present one to better illustrate my point: Consider you’re in a game of chicken with someone and you decide, while barreling down the street and in order to win, that you want to throw your steering wheel out the window to insure your success. However your opponent sees this action and decides to throw his steering wheel out the window as well. Well now your both screwed. My point is that it is wise to remember that, while Game Theory allows us to understand and keep straight incredibly complex social interactions, it is still very much an artform.

    Finaly, in regards to the article, it wouldn’t surprise me that, down the line, the nannies not able to find work are going to blame the households instead of the actual bill that was passed – thus the never-ending witch hunt of life continues.

  31. 31 31 Josh Weil


    1) Nannies are not homogenous. People don’t want to hand their kids over to just anyone.

    2) You’re assuming the same amount of nannies will be hired after this law goes into effect. This is not true.

  32. 32 32 NannyMame

    While this legislation may cause some nannies to lose their jobs because their employers do not want to provide the necessary accommodations, it will do much to prevent employers from abusing their power.
    If more people would create employment contracts as used by The Nanny Agency, there may not be so much dispute over these issues.

  33. 33 33 Ken

    “You help a lot of people a little bit by having regulations for paid holidays. You hurt a few people a lot by making it impossible to get a job because of the regulations.” Neil Wilson

    That’s yet another assumption. Most regulation I read about hurts FAR MORE people than it helps. You’re assuming that nannies would prefer to get the benefits that are mandated rather than just being paid more. Total compensation will be the same, so if that is fixed at $X, then letting $I be cash income and $B be benefits, then $X=$I+$B. This law forces $B to become larger, which will force $I to become smaller. While you and the fools that passed this bill thinks the bill will make $X larger.

    This hurts every single nanny who isn’t currently getting the minimum benefits mandated in this bill, as well as all empoyers and the beneficiaries of that employment. It hurts the nannies because if they really wanted $B to be larger, while taking a hit in $I, they would negotiate it. By taking away this option, i.e., by reducing their choices, are you really saying they are better off? It hurts the employer the same way. Employers are now faced with the distasteful choice of reducing pay or firing their current nannies because they can’t afford what is mandated and/or the nannies will not accept a reduction in pay.

    Also, those nannies and employers that are not currently affected by these rules most certainly will be when the nanny moves on to work for another or the employer fires them. The nanny will now be looking for another job tryting to negotiate for a job under the onerous regulations pushed on her by the state. While she may be currently getting the minimum amount of benefits now, when she goes to look for another nanny job she may be forced to work for less pay because of people like you who think she’s not smart enough to negotiate for things she doesn’t want and would rather have more pay, but people like you say she shouldn’t have that choice.

    So, these regulations will eventually hurt ALL nannies and ALL nanny employers, while only helping a few current nannies.

  34. 34 34 Ken

    “Game Theory has shown us, through the prisoner’s delemma, that market failures do exist.” Chicago Methods

    Again, another (implicit) assumption. The assumption here is that government can step in and make the market all better. It is well known and accepted by libertarians that markets fail. What libertarians know and accept also is that governments fail as often as the market, but DO NOT have good incentives to correct these failures quickly while markets do. Something many non-libertarians ignore willfully or just think that people in government are fundamentally altruistic compared to businessmen. This of course is laughable when considering Polisi, Dodd, Rangel, Geithner, and … well you get the idea.

    A clear example is that when markets fail, businesses participating in that market are forced to eat into their bottom line, lay off employees, reduce pay and benefits, and much more. In other words businesses are contrained by the underlying reality of supply and demand. When government fails, bureaucrats claim it is because government is not large enough, so raises taxes and continues the failing program. In other words government can insulate themselves from the reality of supply and demand by simply raising taxes. The market is a voluntary place whereas government relies on force – the force to separate you from your money at gun point.

  35. 35 35 Brian G

    Dr. Landsburg: Oh, I most certainly don’t expect the nanny to be better off. I just think the market for nannies might be a little less conventional than some of the other commenters seem to think. If the nanny has just one potential employer, they are likely to be compensated at the minimum amount they’re willing to accept. With, say, ten potential employers, they’re likely to be compensated at the maximum amount the most generous employer is willing to pay. This is, of course, assuming that the employers are aware of each other (or absence of each other). It may be that market conditions are giving employers a kind of monopoly power that commenter Henry found to be implausible. The question is still an open one as to whether or not something ought to be done about this.

  36. 36 36 Bob

    CB, I was wondering what on Earth you were talking about until I re-read the original article:

    The state Senate passed a bill of rights for domestic workers this week, a measure that would require employers to offer New York’s approximately 200,000 household workers paid holidays, overtime pay and sick days.

    I may be wrong, but given general labor laws, don’t you think you’re being naive in assuming that employees will have the right to decline this required “offer”?

  37. 37 37 Russell Nelson

    @nobody.really: as Adam Smith said, “there is a lot of ruin in a nation”. Just because something will make our society only a little bit worse is no reason to tolerate it.

  38. 38 38 Chicago Methods


    I think you’ve misinterpreted my words. The statement that I made about the prisoner’s delemma is not about a government bailing someone out. Only to show that there are a few sectors out there where there is little individual profit, if at all, for a person to start up a business. This is at the core of the prisoner’s delemma game. Garbage disposal is one of those industries – it needs to get done, but no individual would want to take that first step until trash becomes an overwhelming issue.

    You are certainly correct to say that governments fail as well, and more frequently than markets. I see a lot of people saying that, in order to solve the prisoner’s delemma, we just need more people to be altruistic. Yet again, when we put altruism into the prisoner’s delemma, the outcome is even worse off than if we didn’t have anything. Chick out this paper for more details:

  39. 39 39 PaulRoscelli

    rilliant. Once again Steve nails it. He demonstrates how the the writer fails to possess even the most basic ideas within the science of economics and along the way effectively points out how this lack of knowledge turns into bias reporting. Outstanding

  40. 40 40 Cato

    It has to be said: Does this mean New York is literally becoming a nanny state?

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